GM is trying to keep people away from the new Lincoln Navigator by offering huge cash incentives to stick with Cadillac.
The SUV market is hot, and there’s no hotter rivalry than the new Lincoln Navigator and Cadillac Escalade. These full-size SUVs are going at it in the luxury segment like two sumo wrestlers fighting over their next meal, and GM is willing to grease the palms of current Escalade owners to keep them from switching sides.
GM is offering up to $10,000 in discounts to keep people in an Escalades. That offer is open to all leaseholders of 2016 model Escalades or newer and is available nationwide. For Escalade owners, the deal is a more modest $7,500 discount to step into the latest model, which only got a modest refresh for 2018.
Lincoln’s Navigator, on the other hand, got a complete redesign for 2018 that got the big SUV moving off lots and into people’s driveways. Ford says that the Navigator is selling so well they can’t keep up with demand, with units taken off the lot before a replacement can be manufactured. It sounds like old-timey car magnate hyperbole, but considering new Navigators only spent 10 days on the lot before being sold, it doesn’t sound that far off.
In a memo obtained by Bloomberg, GM told dealers that the Escalade promo would go on until the end of May. "Jim Cain, a GM spokesman, confirmed its authenticity, calling it 'an exclusive private offer' designed to 'keep people in the family.'"
If you’re wondering why even the biggest carmakers in America are willing to throw around such huge discounts, it’s because profits on luxury SUVs are even bigger. A single Escalade can net over $20,000 in profits, so giving even half of that back to keep customers from switching is worth it to GM.
This isn’t the first time GM offered a big discount on new Escalades. Last November, GM offered $5,000 for anyone turning in a 1999 or later model year Escalade towards a new one. It’s hard to say if the strategy is working as sales of Escalades are up this year, but then again, so are sales of luxury SUVs across the board.