Cadillac falls from throne in luxury sales race
By Michael Ellis
DETROIT, Dec 4 (Reuters) - Cadillac, for 48 years America's
luxury car sales king, is about to lose its crown to Lincoln in
1998 -- and could be deposed to third place behind
Mercedes-Benz in 1999, company officials and analysts said.
Cadillac, the General Motors Corp. division synonymous with
high-class tastes, smooth rides and plush interiors, has been
hurt by the late entry of a sport utility vehicle and
disappointing efforts to shed its stuffy image.
"Our likelihood of staying in second, or third, in the
sales race in 1999 is probably pretty strong," said a Cadillac
official, who declined to be named.
According to sales figures released this week, Ford Motor
Co.'s Lincoln division sold 170,265 vehicles in the first
11 months of the year, outpacing Cadillac sales of 163,482.
Charging behind Cadillac, U.S. sales by Germany's
Mercedes-Benz, a unit of DaimlerChrysler AG , totaled
154,457 units for the 11-month period. Mercedes, which has
doubled its U.S. sales over the past three years, is on track
for record numbers in 1998.
Both Lincoln and Mercedes have seen sales soar with
launches in the summer and fall of 1997 of new sport utility
vehicles, the hottest new segment, which has grabbed about 25
percent of the luxury market.
Lincoln has sold 39,489 of its leather-filled,
chrome-plated Navigators this year. The Mercedes M-Class, a new
entry for the German luxury maker, has proved equally popular,
racking up sales of 39,356 through November.
GM resisted efforts to give Cadillac a sport utility
vehicle, saying it wanted to save those for its GMC luxury
truck division. But after watching Navigator sales take off --
analysts estimate they earn $13,000 in pretax profit each -- GM
decided to produce a Cadillac sport utility, the Escalade,
based on the GMC Denali full-size sport utility.
Sales of the Cadillac Escalade have totaled 1,550 in the
two months since its launch in October.
"They blew it by not having the Escalade out when they
should have," said Hoot McInerney, one of the industry's most
prominent dealers whose empire includes a Cadillac store in
Mount Clemens, Mich. "They came back in after the ship sailed."
Despite the roll-out of the Escalade, Cadillac could spend
at least the next few years looking up to Lincoln and Mercedes,
whose vehicles are redefining the luxury category and
attracting younger buyers, analysts said.
"I think that Cadillac will lose its first-place rank this
year to Lincoln," said Susan Jacobs, who tracks luxury car
sales as president of the forecasting and consulting group
Jacobs & Associates.
"Cadillac will be No. 3 in '99. And then Mercedes will
become the biggest franchise in 2000 and beyond," she said.
In late 1996, Cadillac brought out the Catera, a smaller
sedan from its traditional large cars, to increase sales among
younger buyers and women. But Jacobs said the car has been a
disappointment and needed incentives to prop up sales.
The new Seville sedan, which went on sale earlier this
year, has received favorable comments in the automotive press.
But Jacobs said the division needs the large DeVille, its
flagship and highest volume product, to be a hit.
"The only prayer Cadillac has to stay the largest luxury
brand would be to bring out a new DeVille that could sustain
its buyers and cultivate younger buyers," Jacobs said. "The new
DeVille would have to be a home run."
However, new competition is coming from all corners. Toyota
Motor Corp.'s Lexus luxury division is riding a record-breaking
sales pace this year because of its new RX300 hybrid SUV. Lexus
sales are up 57 percent at 139,411. Toyota officials have said
sales could hit 150,000 this year and be even higher in 1999.
And Lincoln next year will launch its all-new LS sedans,
cars that feature European styling that Jacobs said could
succeed in attracting aging baby boomers to a traditional
luxury nameplate.
"That LS is great looking," said McInerney, who also owns a
Lincoln dealership. "They're going to knock the hell out of
Cadillac. Cadillac's got a car that looks like a whale. It's an
old man's car."
|
