General Motors (NYSE:GM) is giving the last of the old-school Cadillacs an update. The company said that 2018 versions of its big Cadillac XTS sedan will have a revamped look, more comfortable seats, and some new technology.
GM's decision to update the XTS is something of a surprise. The company was widely expected to discontinue the model, which is built on an older front-wheel-drive architecture, in order to focus on its newer, sharper-edged rear-wheel-drive sedans.
But something surprising has been happening with the XTS: Worldwide sales have been rising.
What's changing with the 2018 Cadillac XTS
First and foremost, the 2018 XTS will get new front- and rear-end styling treatments that bring its styling closer to that of the newer CTS and CT6 sedans. GM also made subtle changes to the car's fenders, and added LED headlights and taillights similar to those on other recent Cadillac models. Taken together, the changes are subtle, but they do give the XTS a fresher look.
Inside, the interior styling is revamped along lines similar to those of Cadillac's other sedans. The biggest change is probably the availability of Cadillac's revamped touchscreen "infotainment" system, called CUE (for "Cadillac User Experience"). The new system, which debuted on the 2017 Cadillac CTS, is more flexible and responsive than the prior version. It's also easier to learn and simpler to use while driving.
GM also made a few changes to the XTS to improve its already-good ride comfort. Those include an updated chassis, redesigned tires, revamped front seats, and upgraded sound insulation.
The 2018 XTS will begin arriving at U.S. dealers this fall.
The XTS was thought to be doomed almost from the start
The XTS made its debut for the 2013 model year, but it wasn't long before GM started hinting that it was doomed.
As far back as 2014, Cadillac president Johan de Nysschen was hinting that the XTS was strictly a transitional model. Originally intended as a successor to the old Cadillac DTS, the XTS seemed to be GM's way of giving its longtime Cadillac customers one last familiar car while it revamped the rest of its lineup and began taking the brand upmarket.
Put another way, the XTS is the last of the old-school cushy Cadillacs. It's a much nicer vehicle inside and out than the Cadillacs we remember from 15 or 20 years ago, but it's in the same spirit: a sedate, smooth-riding, comfortable sedan that doesn't cost quite as much as the tauter-feeling German luxury sedans.
Perhaps to GM's surprise, the XTS has continued to be an appealing package. While U.S. sales have fallen 26% this year as buyers continue to favor SUVs over sedans, sales of the XTS have been exceptionally strong in Cadillac's other big market, China. Cadillac said that worldwide sales of the XTS were up almost 21% in May.
These customers made the XTS worth keeping
The story of the XTS is that it found its intended audience, along with another one: fleet customers. With Ford Motor Company's (NYSE:F) decision to discontinue the Lincoln Town Car, a longtime staple of executive car services and airport limousine operators, there was a market for a big, comfortable, distinguished-looking American luxury sedan that wasn't outrageously priced. The XTS has become a popular choice with those buyers.
I think that fleet business is a big part of why Cadillac's leadership team decided to keep the XTS around for a while, at least in the U.S. It allows the brand to rack up those profitable commercial-fleet sales without devaluing the "real" big Cadillac sedan, the advanced rear-wheel-drive CT6.
That, and its ongoing popularity in China, should help keep the old-school Caddy around for a while longer.