Through the first quarter of this year, the Cadillac Escalade has easily been the most popular full-size luxury SUV in the U.S. Not only has it outsold competitors such as the Infiniti QX80 and the Mercedes-Benz GLS, year-to-date sales are also up more than 8 percent. Unfortunately for Cadillac, the redesigned Lincoln Navigator has been getting a lot of attention lately, forcing Cadillac to offer some serious incentives on the Escalade.
Bloomberg reports that in order to keep customers from considering the Navigator, current Escalade leasees can now get a $10,000 discount on a new one. Escalade owners are also eligible for a $7,500 discount. These incentives are reportedly available nationwide, but the lease deal is only targeted at drivers of 2016 Escalades that will presumably be coming off lease soon.
“GM is trying to keep Escalade buyers out of Navigators, for sure. You’ve got a fresh Navigator and you’ve got an Escalade that is not new and is starting to age,” Jeff Schuster, an analyst at LMC Automotive, told Bloomberg. “GM is willing to forgo a little profit to keep loyalty within the brand, but they’re still making money. The new Navigator has sent a signal to Cadillac that they need to be in front of this and be aggressive.”
That said, Lincoln still has a long way to go before it dethrones the Escalade. Sales through the first quarter were about half that of the Cadillac, and three other full-size luxury SUVs, including the Range Rover, also outsold the Navigator. But March sales were up about 90 percent year-over-year, and first-quarter sales were up about 63 percent. Plus, as we recently reported, the Navigator’s average transaction price of $82,500 is up more than $25,000 in the past year, and dealers can barely keep them on the lot. Navigators typically sit on dealer lots for only 10 days, with six-figure Black Label versions selling in seven days.
As Schuster mentioned above, Cadillac also has to contend with the fact that the Navigator is much newer than the Escalade. The Navigator went on sale late last year, but the current Escalade has been around since 2014. Even the update it received for the 2016 model year isn’t enough to make the Escalade feel fresh when the Navigator’s cabin now looks and feels so luxurious.
Considering Cadillac reportedly makes about $20,000 on each Escalade it sells, it makes sense that to try to keep current customers from jumping ship. “This is a particular battle that GM doesn’t want to lose ground in,” Schuster said. “It speaks to the importance of the Escalade.”