![\"The](\"https:\/\/www.gannett-cdn.com\/presto\/2019\/04\/17\/PDTN\/e445a13f-f4d7-4d6f-aee5-4d4667b94de5-2020-Cadillac-CT5-PremiumLuxury-010.jpg?width=540&height=&fit=bounds&auto=webp\")
<\/p>\n<\/div>The new Cadillac CT5 enters a stagnant sedan\u00a0segment at a time when Cadillac\u00a0is struggling to catch up in SUVs and EVs.\u00a0(Photo: Cadillac)<\/span><\/em><\/p>\n New York<\/em>\u00a0\u2014\u00a0The Big Apple’s annual auto show\u00a0is a tony affair as the world’s luxury automakers try to wow one of the ritziest ZIP codes in the world. But this year’s premium menu is an expensive\u00a0hash as automakers try to make all things for all people.<\/p>\n Once purveyors of exclusive sleek sedans and sports cars, luxury-makers now must invest in a buffet of options from sedans to SUVs to electric cars. Trying to satisfy\u00a0the demands of\u00a0family buyers, performance\u00a0enthusiasts\u00a0and government\u00a0regulators alike, the challenge\u00a0is difficult enough for industry leaders like Mercedes and BMW.<\/p>\n But for smaller luxury-makers the challenge holds huge risks that demand\u00a0dizzying amounts of capital. Take Cadillac and Jaguar, two industry icons that are struggling to make the right choices.<\/p>\n \u201cThe landscape has gotten very complicated,\u201d says IHS Automotive principal analyst Stephanie Brinley. \u201cThe volumes are in SUVs, but it takes time for automakers to make the transition to those platforms. They are increasingly trying to figure out how to share platforms with other brands.\u201d<\/p>\n This year\u2019s New York show features a patchwork of new models \u2014 from the giant\u00a0three-row Mercedes GLS class, to an electric Genesis coupe concept, to small sedans from Cadillac and Jaguar.<\/p>\n On the heels of splashy Oscars ads introducing its full SUV lineup, Cadillac is shifting gears here to sedans. Its CT5 compact sedan that debuted this week marks a major shakeup in the brand\u2019s sedan lineup as a much longer, roomier\u00a0and luxurious competitor compared to the outgoing ATS.<\/p>\n Impressive as it is, however, the CT5 enters a stagnant sedan\u00a0segment at a time when Cadillac\u00a0is struggling to catch up in SUVs and EVs \u2013 markets that the Detroit brand has neglected.<\/p>\n Cadillac marketing chief Jason Sledziewski says making SUV, sedan\u00a0and electric platforms is an investment in the future: \u201cIn order to be part of the luxury industry in the world overall (we\u2019re) becoming what you need to be. There are sedan customers out there, SUVs are growing and we know there is an EV future.\u201d<\/p>\n The CT5 enters the $40,000 compact sedan market against formidable brands like the BMW with its 3-series and Jaguar with its next-generation\u00a0XE introduced Wednesday.<\/p>\n Jaguar leveraged its reputation for making the gorgeous E-Type sports car and posh XJ sedan to craft the F-Pace SUV for a utility-mad market. Sports-car maker Porsche pioneered the idea in the early 2000s.<\/p>\n The $45,000 Jaguar F-Pace midsize SUV\u00a0was the hottest-selling SUV in luxury when it was introduced\u00a0in 2016. It quickly became the brand\u2019s best-seller, for a time outselling the rest of the Jaguar lineup. A smaller E-Pace ute followed. Meanwhile, the brand’s legendary sedans have fallen off a sales cliff.<\/p>\n Still, the XE sedan remains the Jaguar’s number-two\u00a0seller despite a nearly 50 percent drop in sales last year to about 4,700. Like Cadillac, Jaguar\u00a0has been maligned for its lack of interior luxury next to German competitors, so it has amped\u00a0up the XE\u2019s insides.<\/p>\n To juggle changing tastes from sedans to SUVs (and back again if market tastes change) Cadillac and Jaguar have leaned on sister brands to make sense of the enormous capital investment. No longer can luxury brands rely on unique architectures. They must share.<\/p>\n For athletic Jaguar this means, somewhat paradoxically, building on the same SUV platforms as off-road brother Land Rover. The Jaguar E-Pace cuts costs by sharing the front-wheel drive platform of the popular Range Range Evoque.<\/p>\n “The more volume on the same platform, the lower our\u00a0costs,”\u00a0says\u00a0Jaguar-Land Rover product planning chief Dave Larsen.<\/p>\n When Cadillac needed to play catch-up in the three-row SUV segment with the new XT6, it went to the GM toolbox and pulled out the same front-wheel drive platform that undergirds the GMC Acadia.<\/p>\n IHS analyst Brinley says automakers that make luxury and mainstream cars on the same manufacturing line have an advantage.\u00a0For example, the Honda CR-V and premium Acura RDX come off the same line in East Liberty, Ohio.<\/p>\n The electric race pitches\u00a0another curveball at carmakers.\u00a0But this one is dictated not by consumer demand, but by government edict as countries mandate battery-powered vehicles.<\/p>\n \u201cEVs are so much more complicated because there is the whole issue of customer demand,\u201d says Brinley. \u201cIt\u2019s more government regulation that is driving this.\u201d<\/p>\n France and England have targeted the internal-combustion engine for elimination by 2040 and 2050, respectively. China\u00a0\u2013 the world\u2019s largest auto market \u2014\u00a0is expected to follow suit. While Cadillac\u00a0has abandoned Europe, it sees China as a key to future sales.<\/p>\n Yet, Jaguar and Cadillac are investing in electrics despite\u00a0weak\u00a0demand.<\/p>\n Jaguar introduced its battery-powered $70,000 I-Pace on a new, so-called “skateboard”\u00a0platform last year to rave media reviews. But sales have been disappointing. Just 212 I-Paces were sold\u00a0last month compared to some 15,000 by Tesla, which dominates the EV market.<\/p>\n Until consumer demand warms, Jaguar is seeking opportunities with autonomous carmakers to build volume and meet stringent\u00a0government emissions requirements.<\/p>\n Jaguar-Land Rover’s Larsen points out that Google’s autonomous arm,\u00a0Waymo, has purchased 20,000 I-Paces for the 2021 model year for its self-driving platform.\u00a0“We\u2019ll be able to meet our federal regulatory requirement with that in the States,” he says.<\/p>\n Cadillac is making its own new electric platform,\u00a0part of GM\u2019s plans to roll out 20 zero-emission vehicles by 2023.<\/p>\n \u201cRegardless of the automaker, selling electric cars is a loss-making proposition,” says auto analyst and investor Anton Wahlman of Seeking Alpha, “and with over 200 new models coming in the next 3 to 4 years, the competition for a limited number of buyers will become increasingly difficult.\u201d<\/p>\n At least Cadillac doesn\u2019t have to worry about the European market where emissions standards are tightening fast. While Cadillac has thrown its hybrid powertrains overboard to concentrate on battery-electric, Jaguar-Land Rover is promising\u00a0a hybrid\/plug-in or electric version for every model by 2020 to help with European requirements.<\/p>\n \u201cTime is going to tell which electric car strategies will work,\u201d says Brinley. \u201cOn paper right now they don\u2019t make sense.\u201d<\/p>\n Adds Wahlman: \u201cMargins are likely to compress even further. For the time being it\u2019s looking like a horrible time for automotive industry profits.\u201d<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The new Cadillac CT5 enters a stagnant sedan\u00a0segment at a time when Cadillac\u00a0is struggling to catch up in SUVs and EVs.\u00a0(Photo: Cadillac) New York\u00a0\u2014\u00a0The Big Apple’s annual auto show\u00a0is a tony affair as the world’s luxury automakers try to wow one of the ritziest ZIP codes in the world. But this year’s premium menu is […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/23672"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=23672"}],"version-history":[{"count":0,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/23672\/revisions"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=23672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=23672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=23672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}