American Luxury Is Finding New Life in Lincoln’s Brash Behemoths
(Bloomberg) -- For decades, American-style luxury cars were decidedly déclassé, conjuring images of over-chromed, floaty boulevard cruisers that grandpa used to drive.
Now that heft is hip again, at least one upscale brand in Detroit is starting to show signs of life heading into this week’s New York International Auto Show.
Ford Motor Co.’s Lincoln brand is coming off a quarter in which deliveries of its lineup of SUVs -- outfitted with gaping grilles in blinding chrome -- surged 23 percent, registering their best first quarter in 18 years. A much-needed redesign of the Lincoln Navigator sent sales of the model soaring 70 percent last year, and the brash behemoth commands prices that can top $100,000.
Lincoln’s success in embracing an attribute it had been running from for decades -- its American heritage -- has crosstown rival Cadillac taking notice. General Motors Co.’s luxury line had tried to take on Germany’s triumvirate -- Mercedes-Benz, BMW and Audi -- with pricey performance-oriented sedans. But that strategy has fallen flat, with few U.S. buyers willing to pay a premium for faux Germanica.
Now Cadillac is pivoting, cutting prices and rolling out its own revamped line of SUVs, including a bold and bossy new Escalade full-size SUV designed to take on Lincoln’s revitalized Navigator next year.
“The American auto industry was successful when it did its own thing, rather than copy somebody else, and that needs to be an American expression of premium, which is a bit more flamboyant,” said independent auto analyst and automotive historian John Wolkonowicz. “If I want a Mercedes, I’ll buy one. I won’t buy a Cadillac copy of one.”
Detroit has spun its wheels since giving up leadership in the luxury market to the Germans in the 1990s. Teutonic envy prompted Ford to hire a BMW executive in the latter part of that decade to run its luxury lines, which he promptly moved to California. More recently, GM hired an ex-Audi executive five years ago to run Cadillac, which he ran from New York.
Both executives ultimately left, with the brands returning to Detroit looking for identities that don’t try to outdo German engineering.
“We’ve been down this road before, and if you keep doing the same thing over and over, you get the same result,” Joy Falotico, a veteran Ford executive and the head of Lincoln, said in an interview. “We knew we had to do something different.”
Ford began its shift seven years ago, when it started work on a new strategy for Lincoln. It sought to simultaneously outrun its image as an airport shuttle car while still staying true to the best of its heritage embodied by the 1961 Continental, known as the Kennedy Lincoln because it was favored by the 35th president.
With help from its operations in China -- which it expects will eventually be Lincoln’s largest market -- Ford came up with a makeover plan for vehicles with sumptuous styling paired with a smooth ride it called “quiet flight.” Rather than chasing the Germans’ boy-racer ethos, Lincoln aimed to revive the comfortable cruiser.
“We wanted to provide a feeling of gliding versus competitors that might be looking for more dominant engineering and real masculine approaches,” Falotico said.
The first execution of the strategy flopped on the revived Continental and MKZ, which never gained traction as the market for traditional sedans collapsed. But when writ large on the Navigator, the new brand language took off.
The vehicle’s aesthetic is, roughly, that of a land yacht. Massive running boards electronically appear when a door is opened. Gears are selected by pushing large “piano key” shift buttons on the dashboard. And for the right price, Lincoln’s assembly workers will line the cabin in whitewashed teak.
“There’s always been a more traditional aspect of American luxury, and Cadillac definitely went away from that,” said Eric Lyman, an analyst with TrueCar. “There is a sizable percentage of the population out there that likes that drive experience where it’s not all about cornering and acceleration, it’s about refinement and comfort. Anyone who sits in traffic gets that.”
The problem for Detroit is that the audience for classic American luxury vehicles is still considerably smaller than the crowd that prefers upscale Euro-luxe cars.
Falotico said Lincoln is not seeking mass appeal with its re-imagination of the brand. The luxury line left business on the table last year by cutting low-margin sales to rental companies by 25 percent and reducing discounts by almost $1,000 per vehicle. Those moves sapped from sales but were aimed at boosting profitability and resale values.
“I like to describe Lincoln as a luxury boutique,” Falotico said. “We’re not a mass-market, big-luxury mall brand.”
Cadillac’s latest attempt at rebirth seems to want to have it both ways. The SUVs, especially the Escalade, draw from the brand’s American roots. The tail fins that first sprouted on a ’48 Caddy have evolved into the slashing vertical taillights on the Escalade that form big, red parentheses-like shapes.
But Cadillac’s sedans still take square aim at German rivals with taut, machined styling and a ready-for-the-racetrack driving capability. The CT5 sedan debuting at this week’s New York show targets BMW’s 3 Series and the Audi A4 and will be priced accordingly, said Ken Kornas, the car’s product manager.
For Cadillac, years of struggle and attempted rebirth have made the whole concept of American luxury amorphous. Andrew Smith, the Australian native who is chief of Cadillac design, said the brand’s styling is youthful and confident, but he avoids describing it in nativist terms.
“American luxury is a mix of different inputs from around the world,” Smith said.
Cadillac’s new president, Steve Carlisle, who took over last year from ex-Audi exec Johan de Nysschen, said in January that the brand’s comeback is still getting started. The XT4 small SUV went on sale last fall, while the three-row XT6 SUV is just going into production.
That has left Cadillac in the rare position of playing catch-up to Lincoln, which already added the Nautilus mid-size SUV to its lineup -- one of four new or redesigned utilities in the last two years. That helps explain why Cadillac sales fell 2 percent in the first quarter, while the Lincoln brand rose by double digits, despite a collapse in Continental sales.
With a new generation entering the luxury-buying stage of their lives, memories of the American brands as “grandpa cars” with questionable styling cues and quality are fading in the rear-view mirror. And that gives the venerable Detroit brands a chance to reboot.
“Both brands, in slightly different ways, are finding themselves,” said Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive. “They’re each finding their own space instead of just completely chasing the Germans.”
©2019 Bloomberg L.P.