Look at the major players. Mercedes-Benz and BMW are said to be making billions of dollars and Volkswagen wants to move from a reputation of being maker of the “people’s car” to one of offering a “rich guy’s car.” Fiat wants to grow its Alfa Romeo brand as well as Maserati.
As the luxury car makers from other parts of the world seem to be racking in the dough, American luxury car makers are not. There was a time not all that long ago when Ford’s Lincoln Town Car was garnering $1 billion a year for the company. Not any more. Lincoln is now fifth in the ranking of luxury brands sales in the U.S. Cadillac is fourth. Leading the way are Lexus, BMW and Mercedes.
In the case of Ford and its Lincoln division, a plant in Michigan that makes Lincolns is shut down right now and pundits complain that Lincoln models MXZ and MKX are too much like their cousin Fords. The Town Car is expected to be axed from the Lincoln line.
Reports say that Ford wants to build up Lincoln. But, so far, things don’t look promising.
General Motors and its Cadillac division, on the other hand, appears to be emerging as a real player in the luxury minded market. The CTS is competing well against the smaller and mid-size Mercedes, BMWs, and Audis and the Escalade SUV continues to do well. But pundits complain that there is no top end Cadillac that sells in the range of $70,000 that competes with the Mercedes S-Class, BMW’s 7-Series or Lexus’ LS.
And pundits are also pointing out that the American luxury car divisions are at a disadvantage when marketing against the foreign luxury car makers because the foreigners have more money to invest in new engineering. For example, the German luxury cars now feature powerful diesel engines. And Mercedes AMG and BMW M models are doing well on the high powered specialty side of the market. These auto makers may have to pay a fine for the poorer fuel economy but what do they care when they have the money to pay such fines. The domestic car makers are trying to get out of the red. They can’t afford the same shrug of the shoulder attitude.
So, what is the future of the American luxury car? We guess the team to watch is GM’s Cadillac to see.