Ford Motor Company: Is Lincoln Killing the 1 Thing Cadillac Has Left?
This year has been somewhat lopsided for the two crosstown luxury auto rivals, especially compared to last year. In 2013, General Motors' Cadillacbrand boosted sales by 22% on the back of several hot new models, while Ford's Lincolnbrand saw sales fall 0.6%, as the overall auto market hummed higher by 7.5% for the year.
This year, however, has been completely different. Through August, Cadillac has seen sales drop 4.7% while Lincoln has seen sales increase 13.4%. It has been a good year for Lincoln, a head-scratching one for Cadillac.
But there's one storyline in particular that's become even more head-scratching: the slump in SRX sales.
Through August 2014, the ATS and XTS -- the two top-selling Cadillac models behind the SRX -- have seen sales plummet 20.3% and 22.5%, respectively. And with CTS sales down on the year, the SRX was the company's only shining star.
Through the first six months of 2014, SRX sales were higher by over 20%, which is pretty darn good for your top-selling model, if you ask me. However, this trend seems to be reversing.
Cadillac's pain is Lincoln's gain
Lincon's MKC crossover, which was introduced in May, could be the culprit behind falling SRX sales. People say a picture is worth a thousand words. So allow me to use an illustration to describe the current scenario:
To further see how SRX sales have declined in rapid succession, check out the table below, showing the company's year-over-year sales results for each month:
2013 SRX Sales
2014 SRX Sales
Change in Units (YOY)
Change in Percentage (YOY)
As you can see, year-over-year sales gains and the difference in unit sales for the SRX topped out in April and have declined in each month since.
The Lincoln MKC, which starts at $33,100, is a cheaper, more compact, and more fuel-efficient ride than the Cadillac SRX, which starts at $37,600.
The MKC's EPA-estimated 29 miles per gallon on the highway and 20 MPG in the city is handily higher than the Cadillac SRX's highway and city fuel efficiency of 24 MPG and 17 MPG, respectively.
The MKC is sportier, cheaper, and easier on consumers' wallets at the pump. It also doesn't hurt that Lincoln now has two SUVs to Cadillac's one.
With the MKC joining the lineup with the larger and more expensive MKX, (which starts at $38,500), perhaps this one-two punch is overpowering the Cadillac SRX.
While the SRX still outsells the MKC by a fairly wide margin (4,545 units versus 1,760 units in August), I'm not so sure this recent trend will reverse anytime soon. People seemed to think the possibility of the MKC weighing down SRX sales was incredible back when I proposed the idea in July.
But four months after the MKC introduction, the sales trend for both cars looks, at the very least, rather coincidental. Maybe consumers only plan on comparing the Lincoln MKX (the more expensive, larger model) to the Cadillac SRX, only to be surprised when they find that the MKC fits their needs, has more fuel efficiency, and is cheaper.
Maybe consumers who are on the fence between a Cadillac and a Lincoln side with the latter since it has a past less blemished by recalls and safety issues.
Perhaps some of the entry-level luxury SUV buyers are currently finding Lincoln models more attractive, while some of the higher-level luxury SUV buyers are looking at lineups like the BMW X Series or the Audi Q Series.
Maybe, just maybe, it's a combination of everything above. General Motors has been pretty mum on the subject, only to say that it will slow production in the immediate future and introduce a second SUV and revamp the SRX over the long term, according to the The Wall Street Journal.
From the same article: "Topping [the head of Cadillac Johan] de Nysschen's wish list is a compact crossover utility vehicle." Huh, go figure. Sounds similar to the MKC.
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The article Ford Motor Company: Is Lincoln Killing the 1 Thing Cadillac Has Left? originally appeared on Fool.com.Bret Kenwell owns shares of Ford. The Motley Fool recommends BMW, Ford, and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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