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Cadillac vs. Lincoln: Reversal of fortune?
The Escalade brought Cadillac back into fashion -- but Lincoln's smart overhaul strategy could leave its rival in the dust.
 NEW YORK (FORTUNE) - They are usually black, always big, and generally bedecked in chrome and they are rolling into Cadillac dealerships as you read this column. I'm talking of course about the all-new 2007 Cadillac Escalades. The standard version arrived in February, the stretch edition goes into production this month, and the half-SUV-half-pickup iteration starts up in May.
As the flagship model of the most improved car brand of the 21st Century, the new Escalades have a lot riding on their success. But at least they are starting from the winner's circle. Lincoln's bewilderment
Look at arch-rival Lincoln. It's bringing up the tail of the pack and seems to be heading in the wrong direction. In the latest indication of its bewilderment, it has embarked on renaming the cars in its model lineup. The Lincoln Zephyr, which was foisted on customers for the first time last fall, is being rechristened the MKZ (pronounced Mark-Z) for 2007, while the SUV formerly known as Aviator becomes the MKX (or Mark-X). Wholesale name changes are seldom undertaken from a position of strength and Lincoln is in deep trouble. Neither it nor Cadillac has distinguished itself in competing for younger buyers against the likes of BMW or Lexus, but Lincoln's decline has been downright scary. At the end of 2000, Cadillac and Lincoln were running neck and neck in sales, with Lincoln notching 193,009 cars and trucks and Cadillac counting 189,154. But by last year, Cadillac had built a huge lead. It sold 235,002 vehicles while Lincoln, in a steep decline, managed to move only 123,207. Cadillac revived its fortunes by spending $4 billion of parent General Motors' money on a new line of cars and SUVs featuring sharp edges and stark interiors. While they are not to everybody's liking, the new vehicles are certainly distinctive and immediately identifiable as Cadillacs. Cadillac also succeeded in catching lightening in a bottle when the Escalade became a must-have purchase for high-rolling, high-profile urban buyers. Now Lincoln, bereft of its own original ideas, is embarking on a similar mission -- a total overhaul of its product line in an effort to impart some consistency and direction to the brand. The early returns are -- surprisingly -- encouraging. Instead of investing in the fetishistic instincts of a few pampered designers and product planners, Lincoln, for a change, is listening to its customers to figure out what they want. Moreover, insiders assert that Lincoln will not be diverted from its purpose by fruitlessly chasing after import buyers. Instead, it will attempt to redefine Lincoln for its natural audience: domestic luxury cars buyers. If they can attract some crossover foreign shoppers in the process, so much the better, but that isn't the main mission. Cadillac: Will lightning strike twice?
Now that it has made its big run, Cadillac has a problem of its on own: difficult comparisons. How do you go from success to success? More particularly, how do you build on a fad product like the Escalade, especially when it wasn't planned that way in the first place? In its defiant presentation of glitz and pizzazz, Escalade has become the emotional flagship of the Cadillac brand, just as tailfin-bedecked Eldorado convertible coupes were nearly 50 years ago. Nearly 300,000 Escalades have been sold since the first GMC Denali was tarted up with plastic-lower body cladding, christened a Cadillac, and put on the market in late 1998. But Eldorado in particular and luxury convertibles in general fell out of favor when customers decided they didn't need an 18-foot long vehicle that carried four passengers -- two in rather cramped quarters in the back seat. Likewise, big SUV sales have fallen sharply as gas prices have risen and more practical crossover vehicles have become available. Escalade faces a double whammy because the fast crowd of rap artists and hoop stars who made it fashionable may be ready to move on to the next big thing. How long will ordinary customers shell out $2,000 extra on top of a $57,280 sticker price for a set of 22-inch chrome wheels if Funkmaster Flex and Shaq are driving something else? Photos and details: |
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