Automakers find consumers still driven to luxury vehicles

Lincoln falls behind Cadillac

Andrew Smith, executive director of Global Cadillac design, speaks about the 2015 ATS Coupe, its concept car at the auto show.

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Andrew Smith, executive director of Global Cadillac design, speaks about the 2015 ATS Coupe, its concept car at the auto show.

DETROIT — With its new ATS Coupe, a beautiful streamlined concept car, and a lineup of fiercely tuned sports models, Cadillac is bringing a lot of excitement to this year’s North American International Auto Show.

For crosstown rival Lincoln, the most photographed vehicle of the media preview may have been a 1932 Lincoln KB Dietrich Coupe on loan from a Michigan museum.

As the luxury segment has charged forward in the United States, Cadillac has been one of the frontrunners. Lincoln, meanwhile, has struggled to move the needle at all.

“I think when you look at Cadillac versus Lincoln it really comes down to the product at the end of the day. Cadillac has had a couple home runs in the last couple years,” said Alec Gutierrez, senior analyst with automotive research firm Kelley Blue Book.

Cadillac’s ATS sedan won North American Car of the Year in 2013, and its redesigned CTS sedan was one of three finalists for the award at this year’s show. The ATS Coupe, which made its worldwide debut Tuesday in Detroit, was well-received and represents Cadillac’s latest weapon as it tries to wage war with BMW AG and others.

Analysts say Cadillac is now enjoying the fruits of a clearly established brand and styling vision it has had in place for more than a decade, while Lincoln has struggled to find its way.

Sales numbers tell the story: General Motors Co. sold 182,543 Cadillacs last year, up 21.9 percent from 2012. Ford Motor Co. sold 81,694 Lincolns, down 0.6 percent from 2012.

Overall sales of luxury vehicles were up 10.5 percent in the United States last year, according to data from Kelley Blue Book. Among the 13 brands the company tracks, only Lincoln, Infinity, and Volvo failed to improve sales from 2012 to 2013.

“The luxury car market is very, very strong right now,” Mr. Gutierrez said.

Low interest rates, a surging stock market, and rebounds in real estate have helped push consumer confidence — especially among the more affluent — to prerecession levels.

There are also a whole bunch of very good cars from which buyers can choose.

Mercedes Benz unveils the new C-Class car at the North American International Auto Show in Detroit. Mercedes was the top-selling luxury brand once again last year, outselling second-place BMW by more than 25,000 vehicles.

Still, analysts say Mercedes-Benz remains the pinnacle of mainstream luxury for many buyers.

Mercedes was once again the top-selling luxury brand in America last year, and by a wide margin. The German automaker sold 334,324 vehicles in 2013, up 13.3 percent from 2012. The company outsold second-place BMW by more than 25,000 vehicles.

“It is all about history, it’s about technology, it’s about quality, and it’s all about the customer experience,” said Jason Perry, the general manager at Vin Devers Autohaus of Sylvania, which sells Mercedes vehicles.

Mercedes, Mr. Perry said, does all those things better than the competition.

The company has also had significant success from the CLA-Class, a new entry-level compact luxury sedan. Analysts say that niche may have the most growth potential within the luxury car segment.

“When people are saying the economy has slowed down, I would beg to differ,” Mr. Perry said. “We were up 50 percent in the fourth quarter.”

Most of those sales were entry-level to mid-range vehicles, but Mr. Perry said the dealership, which also sells Audis, sold more $100,000-plus cars in the fourth quarter than in any quarter previously.

That’s one area in which Cadillac and Lincoln remain behind, analysts say.

Audi has its A8, BMW the 7-series, Lexus the LS, Mercedes the S-Class. But neither domestic brand has a true top-of-the-line flagship luxury sedan.

“Even if the sales volumes for those cars aren’t extremely high, in the eyes of the luxury buyer the fact they play in those spaces elevates the brand higher,” said Ed Kim, an analyst with AutoPacific Inc.

Still, Cadillac has made big strides to restore its brand to relevance in the luxury space

The company has focused on building a lineup of rear-wheel drive, performance-capable luxury vehicles from its “arts and science” school of design through incremental change.

Contrast that with Lincoln, which analysts say seems to have lacked a clear direction.

“Lincoln hasn’t had that sort of razor-sharp focus at all. Lincoln was in many cases content to sell rebodied versions of existing Ford products,” Mr. Kim said. “On top of that, their design hasn’t been nearly as expressive, bold, or even consistent over the same time period.”

The 2013 Lincoln MKZ hybrid. Its MKZ sedan made up 40 percent of its sales last year, and Lincoln pins its hopes on the MKC.

Lincoln seems to have hit with its MKZ sedan, which made up nearly 40 percent of the brand's sales last year. But it badly needs another solid seller. The brand hopes to get one with the new MKC crossover, which shares a platform with the popular Ford Escape.

“The sheet metal and luxury appointments are completely different and upscale,” said John Mamayek, who is the general manager of Franklin Park Lincoln.

Dealers expect to get the MKC this summer.

Mr. Mamayek said the MKZ has helped sell the brand to younger buyers, as has Lincoln’s new design theme and its use of technology.

“We have a lot of good things going on,” Mr. Mamayek said.

Jessica Caldwell, an analyst with Edmunds.com, said one challenge for Lincoln and Cadillac has been walking a thin line between keeping the current, older customer base satisfied and changing enough to attract new ones.

That’s a struggle newer brands such as Lexus and Acura don’t have.

“It seems to me that they’re really pushing the design element and trying to find their own niche in the luxury space that’s not already accounted for,” Ms. Caldwell said of Lincoln. “I think that’s really challenging. It’s easy to try too hard in that space.”

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.