Editor's Letter

Cadillac: Going Global, Getting Younger

Editor's Letter

The joint is packed, and music thumps into the night. The models strut around a massive black box doubling as a video projection screen, fashionably dour looks on their faces as the latest in dark, loose-fitting, pre-fall finery from New York fashion house Public School swings from their tall, thin frames.

We’re in Dubai, land of mega-rich sheiks and home of the Burj Khalifa, the world’s tallest building. The outdoor runway rollout is a huge deal for Public School founders Maxwell Osborne and Dao-Yi Chow—a global reveal in a glittering Arab capital. But this is more than a fashion show. Something lurks beneath the box, and the cover lifts to reveal an all-new, four-wheeled model: the 2017 Cadillac XT5.

“When I told my mom we were partnering with Public School, she said, ‘Shouldn’t you do it with a private school instead?’” says Cadillac marketing chief Uwe Ellinghaus, drawing chuckles from the fabulous-looking crowd during the XT5’s post-fashion-show reveal.

The XT5 is set to replace the aging (and not properly named) SRX. The midsize crossover has some big tire treads to fill, as the SRX is Cadillac’s best-selling model with 89,389 moved worldwide through November 2015, a 12 percent increase over the previous year. I crawled in and around the XT5 in Dubai, and I see no reason why it won’t meet or beat those numbers, given its new look, new platform, slightly larger size, and impressive options.

But just as important for the brand as a whole, the XT5’s coming-out party in Dubai serves as a 4,000-pound signal of what Cadillac believes it needs to do to thrive in the long term: Go global and get younger.

“For younger customers, luxury needs to be casual, and SUVs have a certain casual nature that a three-box sedan doesn’t have,” Ellinghaus told me. (Read more of my chat with him here).

The XT5 reveal was the first time Cadillac made a world debut outside of the U.S., and it likely won’t be the last. It desperately needs more crossovers, especially if it wants to compete globally, and in China especially. The XT5 is the first of what Cadillac says are four all-new SUV-type vehicles coming by 2020. Cadillac president Johan de Nysschen said recently the next vehicle in development is a compact crossover below the XT5 in size that should arrive by 2018.

Along with it, Cadillac plans two vehicles below and one above the XT5 in size to join the Escalade (which we’ve been assured will never be renamed XT-insert-number-here), although it is possible one could be a coupe-like model along the lines of the Mercedes-Benz GLE or BMW X6. All of them should eventually become available with plug-in hybrid drivetrains so Cadillac will be able to meet ever stricter global emissions mandates.
We will also likely see several of them in Vsport performance trim for the enthusiast set. Too bad Johan and Uwe can’t push a production fast-forward button, because really all of these should be on sale now.

Cadillac instead has been busy rebuilding its car lineup, which was arguably just as important an endeavor. It led to the development of the fantastic ATS-V and CTS-V. But sales results have been mixed this year, especially for the CTS, the car that helped bring the brand back from the brink. According to Ellinghaus, the CTS is being squeezed two ways: It’s not big enough for some (Cadillac will soon have something new to fill that gap in the form of the CT6), and the midsize car market in general is being hammered by—you guessed it—crossovers’ explosive momentum.

“The interesting phenomenon is the growth of SUVs the world over and the decline of sedans, particularly in the midsize category,” Ellinghaus said.

Additionally, Ellinghaus and Co. are smart enough to know you don’t change perceptions overnight, which is where the Public School partnership comes in. The hope is that aligning with hip fashion houses and other nontraditional marketing outlets will eventually help Cadillac better attract the younger set that will soon dominate the market.

“Generation X and Y will make up 80 percent of all actual car buyers in the next five years, so all our cars have to attract younger audiences,” Ellinghaus said. Apparently most of them want crossovers, making the XT5 and the vehicles to come—and how well a new generation of buyers the world over reacts to them—absolutely critical to Cadillac’s future.

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