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Cadillac, Lincoln Stuck in Neutral

Domestic luxury brands gain little traction in 2012.

by on Jan.04, 2013

Cadillac is hoping to see the ATS win North American Car of the Year honors, which could put its sales push back into gear.

The long-promised revival of Detroit’s two main luxury brands failed to materialize in 2012 despite the launch of some major new products that generated largely positive reviews.

Both Ford Motor Co.’s Lincoln and General Motors’ Cadillac wound up losing market share last year – 4.1% and 1.7% respectively — despite the makers’ anticipated improvements . Only the near-luxury GM brand Buick posted a modest, 1.6% gain for the year, though company officials insist the real test will come in 2013.

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That’s quite likely the case, says David Sullivan, of AutoPacific, Inc. “Looking back at 2012, I would say they were semi-disappointing and if we didn’t know there was promising new product in the pipeline it would be pretty bleak.”

The new Lincoln MKZ reached showrooms to late in 2012 to have any real impact.

German imports dominated the American luxury market in 2012, BMW squeezing past its arch-rival Mercedes-Benz for the second year in a row.  Lexus landed in third place, unable to regain the momentum that had it lead the luxury segment for a number of years prior.  And while it lagged the luxury segment’s top three, Audi posted yet another annual sales record.

By comparison, Cadillac and Lincoln seem stuck in limbo, unable to regain the market presence that saw them set the luxury lead for decades.  But the two began a steady decline in the 1980s as the imports flooded the market with newer and hipper offerings.

Cadillac has been struggling for more than a decade to gain traction with its oft-declared “renaissance” but a series of mis-fires in the middle of the last decade, notably the unloved STS flagship and short-lived XLR roadster, derailed that effort.

The new ATS has been generating significantly positive reviews – notably declaring it the first Detroit offering to give serious challenge to the vaunted BMW 3-Series – and the compact sedan is a finalist for North American Car of the Year.  But sales haven’t quite met expectations yet, Caddy officials crossing their fingers that a Car of the Year win will give the ATS some added momentum.

Also slowly building volume is the new Cadillac XTS flagship launched in mid-2012.

But the rest of the GM brand’s line-up, such as the once-powerful Escalade have been struggling.

So have most of Lincoln’s offerings. Despite good reviews, analyst Sullivan says few potential customers even noticed the major freshening of the big MKS sedan, and the critical new MKZ, which targets one of the largest segments of the U.S. luxury market “went on sale too late in the year to make much of a dent.”

Ford made some significant announcements about Lincoln in 2012, giving the long-struggling brand its own design team and putting global marketing czar Jim Farley directly in charge of the brand’s revival.

“It’s a long-term project,” stresses Farley, who previously headed Toyota’s Lexus brand.  Indeed, a number of observers point to the two-decade resurrection of the Audi marque and question whether Ford is willing to take such a long view.

Part of the challenge for the Detroit maker is that they’re facing a product juggernaut from Germany. Where BMW, Mercedes and Audi once offered less than half a dozen products each they now have expanded their individual line-ups to more than 20 major model lines and variants.  And there will be more coming, such as the all-new Mercedes CLA, a coupe-like subcompact sedan set for launch this year. The Stuttgart-based maker also offers a wide range of crossover-utility vehicles, such as the M-Class and three different sizes of its G-Class line-up.

Lincoln aims to keep up and will reveal the critical new MKC at this month’s Detroit Auto Show.

(For more on the Lincoln MKC, Click Here.)

That’s a positive step, contends analyst Sullivan, forecasting, C-segment crossovers are going to continue to grow in popularity in the U.S.”

The MKC and MKZ are two of four new models Lincoln has promised by 2014. But in a conversation with last month, Ford CEO Alan Mulally confirmed that a number of additional models, including at least one rear-drive offering sharing the next-generation Mustang platform “have been approved.”

Cadillac, meanwhile, appears also willing to take the long view.  A senior insider has told to expect to see a prototype for a true flagship model, drawing upon the design cues of the 2011 Caddy Ciel concept, introduced this year. A compact crossover and possibly a convertible may also be revealed.

Cadillac also plans to unveil the production version of its ELR plug-in hybrid, a luxury version of the Chevrolet Volt, at the Detroit Auto Show.

As for Buick, the brand had seemed poised to rebuild after decades of steady decline but 2012 saw mixed results, at best.  Buick, which GM has tried to directly target against Lexus, did show a modest improvement in sales and market share, but that came almost entirely from one new product, the little Verano. And even there the maker was forced to briefly halt production a month ago due to excess inventory.

The launch of two new products, the new Encore compact crossover and the redesigned version of the larger Enclave, could determine whether Buick can get back on track in 2013.

Despite 2012’s disappointing results, the new year is likely to determine whether Detroit can once again become a real contender in the American luxury market.

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One Response to “Cadillac, Lincoln Stuck in Neutral”

  1. Jorge M. says:

    The ATS is a decent looking car but I suspect that Cadillac, BMW, Mercedes, et al are going to wish they had not diluted their brands with entry level models for short term sales gains. When a brand becomes a belly-button brand, the affluent look elsewhere for exclusivity.