- The Washington Times - Friday, August 31, 2001

What do 7-foot Shaquille O'Neal of the Los Angeles Lakers and anorexic-looking Calista Flockhart, star of "Alley McBeal," have in common? The surprising answer: they both drive around in a Cadillac Escalade. These two celebrities are just part of a growing group of Hollywood and sports celebrities who have recently purchased Cadillacs.

The luxury market had been dominated by Cadillac until a few years ago. That's when German and Japanese marques leapfrogged far ahead of the GM flagship brand. Now Cadillac is seeking to remake its image and not only recapture luxury segment leadership in the United States, but also become a global brand competing with BMW, Mercedes-Benz and Lexus.

The lead vehicle in this program is the Escalade, an innovative full-size SUV that appeals to a broad range of buyers far younger than typical Cadillac customers. Susan Docherty, brand manager for the full-size SUV, says that none of the celebrities has been solicited with cut-rate prices nor been given complimentary vehicles. Yet they are among the growing group of hipper and younger buyers who are shopping Cadillac again.

Totally revamped for 2001, the Escalade is no longer a badge-engineered knockoff of the Chevrolet Tahoe and GMC Yukon. Cadillac makes no excuses for the original model, which was produced for an investment of $10 million and produced return of $100 million in its first year. But the current Escalade is not just another badge-engineered vehicle it's all Cadillac. It is powerful and full of engineering innovations, including Stabilitrak, a high-tech stability control system. Miss Docherty says the big SUV is the first vehicle in this class to get such a system.

"We're doing something right here to attract 20- and 30-year olds," Miss Docherty said. The new customers have earned their money at an earlier age than typical Cadillac car customers. They are also not put off by today's higher gasoline prices. "To this group, $500-800 more for fuel annually is not an issue," she said.

Cadillac expects to sell about 25,000 Escalades this year. That performance is about flat with last year's sales, but stands out against the success of its main competitors. Those are the Lexus LX 470 and the Lincoln Navigator. According to Ward's Automotive Reports, sales of the LX 470 are off 17.3 percent through June of this year, and the Navigator is down a staggering 41.4 percent.

Mark LaNeve, who recently became general manager of the Cadillac division, says he expects the Escalade and the EXT, a vehicle that will be going on sale late this year, to make a big contribution to growth. The EXT is an all-new vehicle for GM, a combo full-size SUV and pickup in one. It is expected to compete against the all-new Lincoln Blackwood.

Both Cadillac and Lincoln are betting on future growth from truck sales. They are learning the lesson from Lexus and Mercedes, which have steadily increased sales with SUVs and crossover vehicles — sort of carlike SUVs. BMW has also produced a lot of growth with its X5, a high-performance crossover vehicle.

However, Cadillac isn't relying solely on trucks to power its comeback. Mr. LaNeve says that its entry-level Catera will be replaced later this year by an all-new model called CTS, which will be built in the United States. It will not be based on the same chassis as the Opel Omega, a European car with a platform used by the Catera.

The CTS will introduce a totally new design for Cadillac cars and is targeted to compete head-on with the BMW 3-Series, Mercedes C-Class and the Lexus ES 300. Success in this segment will be crucial if Cadillac is to again become a luxury leader. Besides its three principal competitors, there are strong entries from Audi, Volvo and even Jaguar in this segment.

Mr. LaNeve is also counting on other new models, including a roadster with a new design that's expected to be the brand's flagship model. The Cadillac chief expects these different designs to bring in a new generation of buyers who have been flocking to importers' showrooms. His job is to transform Cadillac into a hip brand capable of appealing to sports and entertainment celebrities and yet retaining traditional buyers who purchase DeVille and Seville models.


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