Mercedes-Benz

Cadillac Escalade nipping at Mercedes GL's heels, on prestige scale

April 11, 2014: 10:34 AM ET

The fourth-generation Escalade has luxury bells and whistles--and a greater towing capacity.

By Doron Levin

The 2015 Cadillac Escalade

The 2015 Cadillac Escalade

FORTUNE -- If you're a well-to-do Dallas rancher with a bit of grey at the temples you'll likely be drawn to the 2015 Cadillac Escalade, the fourth generation of the brand's large, luxurious, and powerful SUV, just now going on sale.

If, on the other hand, you're a Beverly Hills oral surgeon just hitting her stride professionally and with a few children to chauffeur to school and lacrosse matches, the Mercedes-Benz GL might be more your style.

The Cadillac, being all new, is the more notable of the two SUVs. And it's the more stimulating, from an automotive perspective, since it exemplifies the steady march upward of General Motors Co.'s (GM) luxury brand. Cadillac, which stumbled badly in the regard of luxury shoppers in the 1990s against names like Mercedes-Benz, is back.

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AOL's Autoblog called Escalade"a vehicle that can and will challenge the very best in the full-size luxury SUV segment, but unlike in the past where its badge and brash styling did the talking, it'll be driving dynamics, technology and a beautifully appointed cabin that will have customers signing on the dotted line. Quite simply, (it) is once again a vehicle that cannot and will not be ignored."

Escalade is the last variant of GM's new pickup truck platform, which appeared first last year as a Chevrolet Silverado and GMC Sierra and has been adapted to new versions of Chevrolet Suburban, Chevrolet Tahoe, and GMC Yukon.

Surprisingly, the Mercedes GL currently outshines Escalade in the premium market, certainly in terms of sales. Through the mid-2000s, Escalade outsold GL; then around 2011 Mercedes pushed ahead; last year, GL -- on the heels of a new model -- sold close to 30,000 units last year, while Escalade sold just more than 22,000, according to Kbb.com. The average transaction price of the GL is nearly $80,000, nearly $8,000 a unit more than for Escalade.

In terms of demographics, Escalade appeals to a slightly older and slightly less affluent customer than the GL. And Escalade is stronger in the Midwest and Texas, while Mercedes-Benz does especially well on the East and West Coasts.

Less important than the differing demographics, though, is how much closer Cadillac has moved toward the German luxury brands and Lexus. The attention to detail is evident in the stitched upholstery, jewel-like headlamps, sophisticated sheet-metal sculpture, and high-tech safety and infotainment features.

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A key differentiator for a few customers will be vehicle architecture. A heavier vehicle with more towing capacity, the Escalade will be the choice for anyone pulling a boat or a horse trailer -- that Texas rancher, for example.

The prestige factor is harder to quantify, but the edge still has to go to Mercedes -- though Cadillac is closing the gap. Neither vehicle would be the first choice of a person wishing to avoid ostentation.

The arrival of the fourth-generation Escalade is excellent news for Cadillac and GM, an automaker that could stand a positive development or two in light of everything lately gone wrong with its ignition-switch investigation on small cars.

With a little luck, the new Escalade could move to the head of its class, beyond GL, where GM believes it ought to be.

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