December 6, 2010
Just a decade ago, foreign marques like Mercedes-Benz, BMW and Lexus dominated the U.S. luxury car market. It seemed like nobody under the age of 65 drove a Cadillac and about the only time you noticed a Lincoln was in old newsreel footage of presidential motorcades.
But domestic luxury manufacturers have come on strong in recent years, to the point where vehicles produced by the likes of Cadillac, Lincoln, Chrysler and Buick are now stacking up well against the competition from Europe and Japan in terms of performance, comfort, safety, sales figures and (perhaps most important of all) public perception.
A darling of professional athletes and entertainment industry movers and shakers, the Cadillac Escalade is the biggest success story. But models like the Lincoln Navigator, Chrysler 300 Hemi, Buick LaCrosse CXS, GMC Denali and Cadillac CTS are also earning rave reviews, turning heads on street corners and drawing younger drivers.
“In terms of perception and performance, there’s no question U.S. luxury brands in the past compared poorly to European and Japanese luxury brands,” said Mark Scott of AutoTrader.com. ”For U.S. brands, luxury seemed to be mostly about size and the smoothness of the ride. Many U.S. luxury cars were big and they drove like sofas on wheels. They had lots of bells and whistles and big price tags, but they weren’t particularly fun or interesting to drive.”
But U.S. luxury cars were once the envy of the world, Scott said. Everybody who was anybody drove American wheels. Babe Ruth tooled around in a Lincoln Zephyr Continental convertible in 1940. Both Al Capone and President Franklin D. Roosevelt drove 9,000-pound armor-plated Cadillac Town Sedans. Clark Gable’s trademark car was a beige-colored Duesenberg JN Roadster made in Indiana. Elvis was famously fond of Cadillacs of all shapes and sizes.
But then American luxury took a wrong turn. By the mid 1960s, Detroit somehow forgot how to make vehicles that were both high priced and high quality. Meanwhile, the Europeans (and later the Japanese) were coming on like gangbusters, creating vehicles with style, comfort and reliability to match their high price tags.
“Look at a typical U.S. luxury car [from that period],” Scott said. “It was shiny, big and expensive, with most of the luxury options you’d expect. But then the steering wheel would be thin and cheap-feeling. Or the knobs and switches on the dashboard had a cheap, flimsy, plastic feel to them.
“Many U.S. luxury models were just dressed-up versions of cheaper models. U.S. manufacturers had this habit of taking an $18,000 car, adding a few luxury features and a luxury nameplate, and then charging $25,000 more for it.”
Three decades passed before U.S. automakers rallied against the foreign invasion. And they did it in a uniquely American way — by creating the luxury SUV. Following its high-profile role in the first Gulf War, the Humvee became available to ordinary drivers in 1992. By the end of the decade, Navigator, Escalade and the GMC Denali had also hit showrooms. Brisk sales and solid revenues led the Big Three to test the waters with new luxury sedans like the CTS and LaCrosse.
By 2004, there was an appreciable uptick in the sale of U.S. luxury models and a corresponding jump in customer satisfaction. Lexus topped the J.D. Power & Associates quality ratings of luxury cars that year (163 problems per 100 cars). But some previously lauded European models had started to slip, with below-average (and in some cases dreadful) reliability numbers. Meanwhile, upper-end Buicks and Cadillacs had started to show signs of improvement.
Fast forward to 2010 and the latest J.D. Power & Associates Vehicle Dependability Study results. Porsche leads the overall rankings. But each of the Ford brands — Ford, Lincoln and Mercury — placed in the top 10. Lincoln showed the most significant improvement, climbing six positions from its previous ranking.
This marked the first time in 24 years of the J.D. Power annual quality studies that owners of domestic cars have reported fewer problems than owners of foreign brands, with the luxury segment performing particularly well.
“Domestic automakers have made impressive strides in steadily improving upon initial quality, particularly since 2007,” said David Sargent, J.D. Power’s vice president of global research. “This may mark a key turning point for U.S. brands as they try to win the battle against negative perceptions of their quality.”
But there is still a long road ahead, Sargent insisted. “Domestic manufacturers need to prove that they can consistently produce higher-quality vehicles than import brands. In addition, domestics need to focus their efforts on convincing consumers — particularly younger buyers — that the quality of domestic brands rivals, if not surpasses, that of imports.”
In the wake of increased sales, Detroit is ramping up luxury production. Lincoln recently announced seven new or significantly revamped models to be released in the next four years, all of them aimed squarely at major competitors Cadillac and Lexus. General Motors is investing $190 million in the production of an all-new small luxury Cadillac at its Lansing Grand River plant.
So confident are the Americans in their new breed of luxury vehicles, they are now bringing the fight overseas. GM is assembling three different Cadillac models in Russia and another in China, and has introduced a stretch version of the Cadillac STS in the Middle East.
“U.S. luxury manufacturers,” Scott said, “have started to look lower on the age scale for their buyers and are now making luxury cars that have the attention to detail, fun driving experience and quality that many European and Japanese luxury cars have offered for some time.
“Look at cars like the Cadillac CTS and the CTS coup, the Buick Regal and LaCrosse, or the Lincoln MKS and MKZ. I’d put those cars up against their competition from Europe and Japan any day in terms of their design, luxury features and overall luxury driving experience and they’d fare very well. And American buyers are responding by giving these cars another look.”