Cadillac and Lincoln Both Got Trashed

Source: Ford Motor Co.
When automakers reported new car sales for March on Wednesday, two U.S. luxury brands got absolutely trashed. Cadillac, the luxury brand from General Motors Co. (NYSE: GM), and the Ford Motor Co. (NYSE: F) luxury brand, Lincoln, posted year-over-year March sales drops of 6.8% and 3.4%, respectively.

The Cadillac story is complicated. In its February 2015 dependability study, research firm J.D. Power ranked the Cadillac fourth, behind Lexus, Buick and Toyota. The study is based on responses from more than 34,000 original owners of 2012 model year vehicles.

In J.D. Power’s initial quality study on 2014 model year vehicles, Cadillac ranked 13th with 115 problems reported per 100 vehicles, compared with overall leader Porsche, which had 74 problems reported out of 100 vehicles. The industry average is 116 problems per 100 vehicles.

ALSO READ: GM Sales Slip as Cadillac, Chevy Falter in March

Cadillac’s Escalade sport utility vehicle (SUV) sales rose by 125% in March and rose 114% on the Escalade ESV. All together, though, these amount to just 1,758 units sold in March. The brand’s full-size XTS model saw sales rise 11.3%, but the small ATS and the midsize CTS posted declines of about 32% and 49%, respectively.

Cadillac installed a new president last June and a new ad agency in November. The company also raised its prices when it introduced new models, and the new president is aiming to raise the stakes with premium models priced at $100,000. To get that all to work, Cadillac has to shed its image as a traditional American luxury brand and go after Audi, BMW and Mercedes buyers who are both younger and even more brand conscious than their parents and grandparents.

Lincoln’s story is much the same. Only the brand’s Navigator SUV sold more units in March than it did last March — 1,097 compared with 746, up 47%, and not enough to keep the brand’s sales from dropping by 3.1% for the month. The one place that Lincoln outshines Cadillac is in year-to-date sales, which are down less than 1% compared with a year-to-date drop in Cadillac sales of 6.1%.

In terms of sheer numbers, however, Cadillac outsells Lincoln by more than three to one. To try and cut down that disparity, Lincoln showed off a Lincoln Continental concept car at this week’s New York Auto Show. The car is scheduled to be available next fall as a 2017 model. That is unlikely to be enough to turn the brand’s fortunes around all by itself.

ALSO READ: Can Mercedes Take 5% of American Car Market?

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