GM Dangles $5,000 Escalade Discounts While Lincoln Debuts New SUVBy and
Deal targets Ford’s luxury brand as Navigator hits showrooms
Morgan Stanley sees $2 billion profit edge for GM in big SUVs
The nationwide deal on GM’s Cadillac Escalade sport utility vehicles this month applies to any buyer trading in a 1999 or newer Lincoln model, according to a memo sent to dealers and obtained by Bloomberg News. Jim Cain, a GM spokesman, confirmed its authenticity.
GM is getting off to an aggressive start defending one of its dominant large SUVs as Lincoln rolls out its challenger, the first significantly redesigned Navigator in 15 years. Ford also has updated its Expedition model to try to narrow what a Morgan Stanley analyst estimates is a $2 billion annual pretax profit edge for GM in the lucrative segment. It’s packed the $72,055 Navigator with 75 new features including standard wi-fi and a dozen power outlets.
“The new Lincoln Navigator is a significant step up,” said Matt DeLorenzo, managing editor of automotive researcher Kelley Blue Book, who has driven the new SUV. “Cadillac will have its hands full until it can get back in and do a significant remake of the Escalade.”
The $5,000 incentive will apply to both the purchase or lease of a 2018 Escalade, according to the dealer memo. The SUV starts at $73,995, according to Cadillac’s website.
The discount can be grouped with several other deals GM is offering, according to the memo. Last month, incentive spending on the Escalade averaged $4,117, down from $5,570 in September and $6,178 in August, according to J.D. Power data obtained by Bloomberg.
The incentive targeting Lincoln owners is being offered to keep GM’s prices competitive, said Cain, the company spokesman. Lincoln sells the outgoing version of the Navigator for an average price of about $53,000, compared with Escalade’s average of more than $80,000, he said.
“I don’t know that this will hurt their launch,” Cain said by phone. “But it is a way for Lincoln customers to step up into something more meaningfully luxurious.”
Ford has made no secret of its desire to steal market share from GM in one of the richest regions of the U.S. auto market.
“The profit pool is enormous for these large, body-on-frame SUVs,” Bob Shanks, Ford’s chief financial officer, said in an interview earlier this year. “Right now, General Motors gets a disproportionate share of that. We can do better.”