Cadillac Moves To NYC – Where Does This Leave Escalade?
According to The Detroit News (and now confirmed by GM), Cadillac is moving their headquarters to NYC. Evidently, they need to “get away” from the rest of GM if they’re ever going to take on BMW, Mercedes-Benz, etc.
While the notion that moving a corporate headquarters can somehow “fix” an automaker is more than a little bit laughable, the real question here: Where does this leave the Escalade?
Personally, I’m not a fan of the $71k Escalade (give me a Tundra CrewMax and $30k instead). However, Escalades are kind of important to Cadillac:
- As of the end of August, 2014, Escalade sales represented 15% of Cadillac’s total sales volume.
- What’s more, dealers report that Escalade sales (and margins) are brisk following the recent re-design.
- Escalade sales are up year over year about 30%
While it’s true that finding an Escalade in NYC is about as hard as finding a little old lady wearing a fur coat (Escalades are everywhere in NYC, sometimes with diplomatic plates), New York City isn’t Escalade country. Outside of livery drivers and diplomats, most New York City residents find little value in owning a big giant SUV in a city where parking is a nightmare and driving 7 blocks across town can take an hour.
If Google’s nifty “trends” search data is any indicator, “Escalade Country” is the Gulf coast of the USA. Or maybe Texas. Or – dare I say it – but maybe even Michigan. But NYC? Not a chance.
The point? Cadillac’s move to NYC smacks of desperation. Cadillac has struggled to sell decent (albeit not spectacular) vehicles that are comparable to German cars, but it’s not because Cadillac is headquartered in Detroit. The reason is much simpler: Cadillac vehicles cost too much. Why buy an ATS Luxury Sedan for $40k when you can have a BMW 328i for the same figure? The BMW has cachet. The Cadillac (for a lot of reasons, some of which aren’t really fair) does not.
Don’t get me wrong (I’m not weighing in on the 328i vs ATS debate here), but the calculation the average consumer is making is pretty simple. Option “A” is a cool car from an established and coveted brand. Option “B” is a Cadillac.
Until Cadillac prices their vehicles to undercut the competition, they’ll be forever behind. NYC headquarters or not.
Filed Under: Auto News