While it’s not a panic move on the part of Cadillac, the automaker is clearly responding, with its new $10,000 discount offer on the Escalade SUV, to the gangbuster sales performance of the Lincoln Navigator since its latest revamp.
So far in 2018, Lincoln’s big SUV has seen its sales skyrocket by 63% over the same period in 2017, and there's no reason to think that the upward trend will flatten any time soon. At present, a new Navigator spends an average of 10 days on the lot before being snapped up; in the case of the Black Label high-end version and its $100,000+ sticker price, the average is just seven days. This is courtesy of the Bloomberg website.
Even better for Lincoln, the average selling price of the different Navigator trims is now $82,500 USD, or $25,600 higher than what it was a year ago. That new figure is roughly the same as the Cadillac Escalade’s selling price.
This explains pretty succinctly why GM’s luxury brand is willing to slash $10,000 off its asking price, at least for lessees of a 2016 Escalade model. The consensus among industry watchers is that Cadillac turns a profit of around $20,000 on each Escalade it sells, for total revenue of somewhere in the area of $1 billion annually.
The last revision of the Cadillac Escalade dates from 2015. While it’s a stretch to say the model is outdated, it’s easy to see why the new Navigator represents such a threat to it.
If the Navigator continues on its current streak of success, it will be interesting to see how Cadillac reacts. And react they will, with those kinds of big numbers in play.
For both companies, the stakes are indeed sky high in this lucrative segment.