Earlier this month, I took a look at how Ford's (NYSE:F) Lincoln brand is beginning to catchup to General Motors' (NYSE:GM) Cadillac brand. Today I want to take a closer at how that gap could get even smaller.
Although sales have been rather lackluster for Lincoln over the past several years, it has surged so far in the first six months of 2014, up a robust 16.3% compared to the same period last year.
Meanwhile, Cadillac's sales have slipped 3% this year, but have largely been held higher by one key model: Its SRX crossover. Lincoln's SUV, the MKX, has posted modest gains too. But its new crossover, the MKC, could be what really puts the pressure on Cadillac.
A closer look at the Cadillac SRX
First let's take a look at the SRX. It was Cadillac's best selling model in 2013, with over 56,000 models sold. In the first six months of 2014, Cadillac has sold almost 29,000 units of the SRX, a 20.3% increase from the same period last year.
The starting price for this year's SRX increased less than 1% from last year, and now starts at $37,605.
In any regard, consumers are loving the vehicle, as it is Cadillac's top selling model this year, (both on a sales growth basis and unit volume basis).
So what does Lincoln have?
Entering 2014, Lincoln had just one SUV in the mix: The MKX. The MKX -- which costs more than the Cadillac SRX, with a starting price tag of $38,500 -- has improved sales 12.4% for the first six months of 2014, but has only sold about 13,000 units.
However, this is not the vehicle I'm referring to in regards to derailing Cadillac's SRX success. Instead, it's the MKC, which was introduced in May.
With a starting price tag of $33,100, the Lincoln crossover is roughly 12% cheaper than its crosstown rival's crossover. It's also more fuel efficient, gaining an EPA estimated 20 miles per gallon, or mpg, in the city and 29 mpg on the highway.
In comparison, the SRX only gets 17 mpg in the city and 24 mpg on the highway. In other words, the Lincoln MKC is 17% more gas efficient in the city and 25% more gas efficient on the highway.
And believe it or not, three out of five Americans called fuel efficiency a "very important" factor when deciding on their next car.
Does it matter that it's a crossover -- what about other models?
While the other models do matter for the two brands, crossovers remain the hottest selling type of vehicle in the U.S. In the first six months of 2014, the segment has tacked on a robust 12.9% sales gain compared to the same period in 2013, the most of any of group.
Americans love their SUVs and crossovers, and for that reason, I expect sales of the Lincoln MKC to pick up speed through the course of 2014.
Now that doesn't mean I expect Cadillac SRX sales to plummet and Lincoln to sell tens of thousand MKC models per month.
But I do expect to see a modest increase in MKC sales in the second half of 2014 and going into 2015. The big question will remain: Will the potential success of the MKC comes at the expense of the Cadillac SRX?
While there's no telling that Lincoln MKC will be well received by Americans or if the Cadillac SRX will see a dip in sales, I think it's something for investors to keep an eye on.
The MKC has only sold 1,361 units this year, but remember, it hasn't been available to consumers until recently. Perhaps it will only cannibalize sales of its more expensive brother, the MKX, instead of putting in dent in Cadillac SRX sales.
But if the Lincoln MKC begins to gain strong momentum, watch for it to come at the expense of the Cadillac SRX. Cadillac sales have been stagnant in 2014, with the exception of the SRX. A sales decline for the model could hurt more than investors think.
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Bret Kenwell owns shares of Ford. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.