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Escalade Has Become Both A Blessing And A Curse For Cadillac

Not enough sedans are being sold. That's a problem.

Cadillac is currently in the midst of rebuilding itself as a global luxury brand on par with the likes of BMW and Mercedes-Benz. It’s no easy task. The ATS coupe/sedan and CTS are excellent vehicles, but there’s still one model that very much defines the brand: the Escalade. That’s both a good and a bad thing. The good news is that the Escalade continues to haul in the cash. For example, year-on-year sales this past January rose 149 percent.

Even the production facility that builds the Escalade (as well as its Chevy and GMC siblings) has been running three shifts and working weekend overtime for several months to keep up with demand. Cadillac’s own marketing boss describes the Escalade as "almost a brand in itself." However, he also made clear that it "does not set the direction" for the brand’s long-term strategy. Cadillac doesn’t want to be a bargain-priced BMW competitor; it wants to be an all-out BMW alternative on par with other German luxury brands. Problem is, according to an industry insider, "Cadillac is not BMW...the ATS is the product that Cadillac could have used to build brand equity, but it was overpriced and overproduced."

According to Reuters, "Cadillac and its dealers had about four months’ worth of unsold CTS sedans and six months’ worth of unsold ATS sedans on hand at the end of January." GM management is obviously fully aware of the problem, and CEO Marry Barra outright stated "we understand we have a lot of work ahead of us with Cadillac."

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