General Motors is going on the offensive with the Cadillac Escalade just as rival Lincoln rolls out an all-new version of their competitor, the Navigator. The company has issued a memo to dealerships authorizing a new $5,000 rebate for buyers trading in a Lincoln product.
Specifically, the memo, obtained by Bloomberg, is nationwide and open to any Escalade buyers trading in a 1999 or newer Lincoln product. While the timing seems to coincide specifically with the launch of the 2018 Navigator, GM says it has more to do with the outgoing Navigator model.
According to a GM spokesman, the average transaction price of the outgoing 2017 model is at $53,000, compared to $80,000 for the Escalade. GM says the discount is being added to better compete with the steeply-discounted 2017 Navigator. In comparison, the 2018 Navigator starts at just over $72,000.
By all accounts, the 2018 Navigator is a massive step up for Lincoln and really the first all-new Navigator in about 15 years. Cadillac’s fears are probably not exaggerated and the potential impact on GM’s financial statement is not insignificant.
Analysts estimate GM’s share of the full-size SUV profit margin is approximately $2 billion per year. Ford is on the record of stating that the company feels GM has a disproportionate amount of the full-size market, so the company is going on the defensive with both the 2018 Navigator and 2018 Ford Expedition.
GM may find themselves in a discounting position on all of their full-size SUVs until they can churn out all-new models that better match the all-new Ford products. Right now GM is slated to roll out new SUVs in 2020.