GM Gives Cadillac Escalade A Reprieve

General Motors has reversed course and will bring an all-new version of the Cadillac Escalade to market in early 2014. Worried that the big luxury SUV might hurt the updated image Cadillac is trying to invent for itself – and questioning demand for full-sized SUVs as fuel prices skyrocketed — the maker had been ready to pull the plug on the Escalade. However, GM decided the vehicle was simply too profitable to let die, and will now turn out a new model sharing platforms with its next-generation Chevrolet and GMC full-size trucks.

Cadillac is in the launch mode for several key new products, the ATS and the premium-luxury XTS, that the maker hopes will dramatically reposition the brand as a more credible competitor to the likes of BMW, Mercedes-Benz, and Audi. To some, the Escalade simply didn’t work into that equation.

Complicating matters, the recent run-up in fuel prices – with many experts predicting gas could reach $5 a gallon in the next year or two – led some GM planners to project that the full-size SUV market, in general, might dry up. But recent sales data show that while smaller and more fuel-efficient cars and crossover are gaining ground, there remain plenty of buyers for products like the Escalade and other full-size SUVs.

Notably, GM will not follow the path favored by many of its competitors, such as Mercedes, Ford, and Nissan, who have migrated many of their larger SUVs to car-based crossover architectures. The new Escalade will remain a body-on-frame vehicle built on the basic chassis that will be used for the new Chevrolet and GMC pickup trucks.

During a media drive of the new XTS, GM officials refused to discuss the timing of the new Escalade but the betting is it will emerge as a 2015 model in early 2014. Meanwhile, GM isn’t talking about powertrains but to help address fuel economy concerns, hybrid and diesel options are thought to be in the mix.

For GM the bottom line was what ruled in the Escalade strategy, the model simply generating margins that were too significant to walk away from.

The next-generation Chevrolet Silverado and GMC Sierra pickups, meanwhile, which were delayed by the 2009 GM bankruptcy, represent one of GM’s most important launches to come for the 2013 model-year.

Cadillac isn’t the only maker that foresees a future for full-sized luxury SUVs. Lincoln has confirmed that it will have an all-new version of its own Navigator model by mid-decade.

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