It's Cadillac vs. BMW, Winner Take All Welcome to the niche SUV wars, where to the consumer go the spoils.
By John Tayman

(Business 2.0) – Poaching, that cruel and venerable business practice, has become popular again among automakers. Which is swell, at least for the auto buyer. Here's why. Americans currently buy about 4 million sport-utility vehicles every year, a statistic I'll let slide without editorial comment, since we are at war. Virtually all of these machines are handsomely profitable, and some have helped keep foundering companies afloat. Others merely mint money and prestige for their maker, such as BMW's beloved X5 (which rolls off lots at the rate of 43,000 each year) and Cadillac's mammoth and popular Escalade (the default vehicle of the NBA, the NFL, and even MTV, at least for the artists, if not the credit-risky watchers). Now, in a kinder, gentler world, it would be enough for BMW and Caddy to note the walloping success of both of these vehicles and take satisfaction from a job well done. Fat chance.

Peeping down the category line at BMW, the brains at Cadillac determined that they must crush the X5, or at least steal its buyers. And BMW, having created what is widely regarded as the best midsize luxury SUV in the X5, did some downward peeping of its own and decided to poach customers who were slightly less well-heeled, and who had been having to settle for, say, a very nice Subaru rather than a prestigious BMW. Thus the SUV niche wars rage. And no, this is not the war I referred to earlier.

Of course, you need not concern yourself with such corporate grasping. Only its by-products. Because every time some company goes after the other, chances are good that the battle will birth a new vehicle, and these smart bombs are invariably interesting. To combat the BMW X5, Cadillac has just released the SRX, something it refers to as a midsize luxury utility. Like most niche SUVs, the vehicle is a crossover, meaning it's based on a sedan platform rather than a more lumbering truck platform. So the SRX drives like a well-tuned sedan and not like something that can haul seven chubby passengers and their requisite baggage. Cadillac believes that the SRX will appeal to potential X5 buyers who require an all-wheel-drive vehicle that handles as well as the BMW but seats two additional people. Such is the hairsplitting in the niche wars. (Both the X5 and the SRX ring up at about $60K by the time you add the extras.)

The SRX is angular and aggressive-looking, yet less threatening than the Escalade. It rides lower, so is less tippy than both the larger Caddy and the X5. And to seal the deal, GM stuck its flawless Northstar V-8 into the SRX (the engine doth give and it doth take: about 320 horsepower, about 15 miles per gallon). Then there are all the little fillips added to distinguish the SRX from the pack. Most impressive is the extraordinary sunroof, which basically peels the top off the vehicle. It yawns open to allow in 5.6 square feet of sky, a sensation both pleasant and scary: As I was sitting at an intersection one sunny afternoon, a pigeon tried to land in the car.

So how does it drive? Magnetic Ride Control, an electronic suspension system lifted from the Corvette, helps make the SRX one of the most purely maneuverable crossovers out there, and this is merely the tip of the electronic-controls iceberg: The SRX has StabiliTrak, panic-brake assist, and dynamic rear-brake proportioning, among others. Handling in turns is superb, and tipped tightly at high speed into some twist, the SRX holds a lower gear through the curl, girds its suspension, gauges the yaw, and keeps things under impeccable control. It's not quite the Porsche Cayenne (yet another product of the niche wars, by the way), but it's close.

Inside, GM thankfully stripped away many of its signature flourishes. In place of rubbery nubbins and chrome is a spare Euro-style cockpit, a nicely executed navigation system, XM radio, power adjustable pedals, and all that other luxe stuff. The intent was to give buyers just a bit more than anyone else does--and it worked.

BMW, however, did the opposite. Recognizing that not everyone wants a $60,000 set of wheels, it decided to slot a vehicle beneath the X5 and sell it for about $40,000. Thus the X3, another crossover, based on the platform made famous by BMW's hugely popular 3-Series sedans and which BMW calls an SAV, or sport-activity vehicle. Did I mention that semantics plays too large a role in the auto industry these days?

Anyway, it takes a keen eye to distinguish the X5 from the X3. BMW nicked away here and there; the X3 is about an inch narrower and four inches shorter than its brother--imperceptible tweaking that, curiously, resulted in a vehicle that has more cargo space than the X5. It's a little less plush as well. The X3 does arrive with the requisite navigation system (which vanishes with a hum into the dash when you're finished with it, a nice touch), a 500-watt stereo, eight-way power seats, and an overall cabin aesthetic that should give GM pause. Moreover, the X3 carries BMW's innovative xDrive system, which works with the stability controls and the descent control and swaps around driving torque to precisely the wheel most requiring it, throwing 100 percent of the power from front or back within mere 10ths of a second. The ride is thumpier than in the X5, but the newcomer is more nimble; its Servotronic steering adapts to the specific situation, altering steering ratios with a lovely, eerie perceptiveness. In fact, in quite a few areas, the X3 actually bests the X5, which leads me to believe that BMW has possibly lost this battle of the niche wars. You, however, may be a winner.