Cadillac's Decision To Make A New Escalade Ignores A Major Auto Industry Trend
While the new ride looks good on paper, we're not convinced it will succeed - no matter how it drives - in a market that now shuns boxy SUVs for sleek crossovers.
Cadillac had a terrific 2013 and is counting on fresh product to keep the momentum going.
The first offering of 2014 is the all-new Escalade. Introduced in 1999, the big luxury SUV stepped up as the brand's star player through the early 2000s, while its sedan lineup languished.
But in recent years, stricter fuel economy standards and changing tastes have pushed aside huge SUVs. Now it's all about the crossover. The luxury business "has become a crossover business," Kelley Blue Book executive editorial director and market analyst Jack Nerad told Business Insider.
Cadillac's big luxury competitors don't make cars like the Escalade. They build crossovers like the Audi Q5, BMW X5, and Lexus RX. So we were surprised Cadillac chose to remake the Escalade before the SRX, the midsize crossover it last refreshed in 2010.
Going against the current could be key to success for Cadillac, Nerad said, adding that the Escalade is "distinctly different from most of the vehicles in the segment." It doesn't have much in the way of direct competitors, so it can dominate interest from buyers who do want that kind of car.
The Escalade won't be "super big volume," Nerad said, noting that because GM already makes the Chevy Suburban and GMC Yukon, it doesn't have to build a vehicle platform from scratch, saving money.
In an interview at the Detroit Auto Show in January, Cadillac U.S. VP of Sales and Service Bill Peffer said the Escalade is valuable because it brings in significantly younger and more affluent buyers than the rest of its lineup. The market "overall is very lucrative," he said. "We've done a spectacular job in that segment now for the last eight years with the current iteration, and we see a lot of opportunity to regain leadership with the new car."
We'll wait until we've driven the new-generation Escalade to pass judgement on the car itself. But if Nerad and Cadillac are right, the return of the monster luxury SUV could be yet another coup for Cadillac on the long road back to prominence in the hotly contested luxury market.
And we fully expect to see Cadillac do battle in the crossover segment with a refreshed SRX crossover before the end of 2014.