They might not happen as often as they once did, thanks to deregulation leading to mergers and consolidation, but fare wars once were a regular occurrence as airlines fought to snag passengers by dropping prices.
The automotive industry isn’t immune to battles waged on price. Even luxury makes sometimes have to offer deep discounts to keep the competition at bay.
Which is what Cadillac is doing to stave off a challenge from Lincoln. Sort of.
Cadillac is offering up to $10,000 off the Escalade because the rival Lincoln Navigator is selling well. Except, as per usual, there’s a catch.
The $10K discount is only offered to lessees of 2016 Escalades (all versions), while owners are being tempted by a $7,500 discount, according to an Automotive News article that cites a memo obtained by Bloomberg News. The offer expires May 31st.
Automotive News cites an analyst’s estimate that the Escalade makes $1 billion in profit for the General. Given that the Navigator was recently redesigned and the Escalade is aging, it makes sense for Cadillac to throw money at current owners in an effort to keep them from straying.
The Escalade still outsells the Navi, but Lincoln’s large SUV has seen a sales increase of 63 percent over the past year, with an average on-lot time of 10 days. Black Label models are lingering on lots for only about a week. Not only that, but the average price paid for a Navigator was up over $25K.
With an estimated per-vehicle profit of $20,000, GM has a cushion that allows for incentives. Cadillac already offered a $5,000 incentive for Lincoln owners to trade in any post-1999 models last fall.
Like it or not, the Escalade remains an important flagship vehicle for both Cadillac and GM. The company doesn’t want to lose ground while waiting for the next Escalade, which is expected as a 2020 model.
Sorry first-time luxo-barge buyers – this discount doesn’t appear to apply to you. But given the Escalade’s importance, you might be able to get a good deal just by asking nicely. Or, more likely, by suggesting you might check out that hot new Navigator.