The Cadillac division of General Motors Co. (NYSE: GM) unveiled its premier luxury compact sport utility vehicle (SUV) Tuesday in New York. The Cadillac XT4 has long been expected, as GM and Cadillac have not had a vehicle in what has become the fastest growing sector of the luxury car category.
The surprising thing about the XT4 is not that it will be available for preorders by the end of this month, but that the base manufacturer’s suggested retail price (MSRP) is $35,790. That’s a long ways from the starting price of nearly $75,000 for a full-size Cadillac Escalade SUV.
The XT4 is priced lower than a Tesla Model X and right on top of the Tesla Model 3. Competitive luxury compact SUVs like the Mercedes-Benz GLC class start at around $40,000 for a 2018 model and the BMW X3 starts at more than $42,000. Only the Acura RDX has a 2018 starting price in the s$36,000 range.
The relatively low entry-level price underscores how the new XT4 is aimed at a younger market. In an email, Cadillac president Johan de Nysschen told Bloomberg:
It will be leading the charge for us as an interceptor of young affluent buyers — very valuable long-term customers. It has, therefore, an important job to do in reshaping perceptions. And it obviously has to do a big job in expanding volume.
His analysis is on target. Cadillac sales dipped 8% year over year in 2017. For the first two months of 2018, sales are up 5.3% year over year, with more than 22,000 units sold, due primarily to a new ATS.
In the press announcement de Nysschen said:
The first-ever 2019 Cadillac XT4 expands our successful SUV lineup to a segment where Cadillac has never been before. And it sets off a dramatic expansion and elevation of the product range, that will see a new Cadillac virtually once every six months through 2021.
The XT4 also introduces Cadillac’s “Y” trim strategy that offers three trim levels: Luxury, Premium Luxury and Sport. The power plant is a 2.0-liter turbocharged inline four-cylinder engine that the company says offers fuel economy of 25 miles per gallon in the city, 30 mpg on the highway and 27 mpg combined. The engine generates 237 horsepower and 258 lb.-feet of torque at 1,500 to 4,000 rpm.