Why The 2017 Cadillac XT5 SUV Is Huge For General Motors

John Rosevear

Luxury crossovers are white-hot. Cadillac's XT5 is the first of several all-new Cadillac crossovers that will seek to boost GM's share of this highly profitable market.

What's happening: General Motors said this week that its new 2017 Cadillac XT5 crossover SUV will have a starting price of $38,995 when it goes on sale in the U.S. in April.

Why that's significant: At $38,995, the XT5 is about $1,400 more expensive than the model it replaces, but it will still have a starting price below all of its key rivals'. Volkswagen's Audi Q5 starts at just under $42,000, and even the cheapest versions similarly sized entries from BMW (X5) and Mercedes-Benz (GLE-Class) start at well over $50,000.

That said, the top-of-the-line Platinum version of the XT5, which starts at $63,495, is more expensive than the highest-trim version of Audi's Q5 and close to the price of the top Mercedes-Benz GLE variant.

But the XT5 should find plenty of interested customers. It's an all-new midsize luxury crossover SUV that succeeds the Cadillac SRX. The SRX is an aging design that is in some ways outclassed by newer rivals, but it has been a surprisingly strong seller for Cadillac in both the U.S. and China. Despite its lame-duck status, global sales of the SRX were up 13.3% last year. That success hints at the potential for the new XT5.

The XT5 is 278 pounds lighter than the SRX, and it's said to have much-improved driving dynamics. Its interior, in keeping with other recent Cadillac models, is also significantly upgraded, rivaling (or beating) the class leaders'.

Under the hood, the XT5 features Cadillac's new 3.6-liter V6 engine. It makes 310 horsepower, more than the outgoing SRX's V6. And with stop/start technology and a new GM eight-speed automatic transmission, the XT5 is expected to get better fuel economy than its predecessor as well.

What it means for GM: Other recent Cadillacs, including the CTS and CT6 sedans, have deeply impressed critics. The XT5 has a lot of promise: On paper, it looks similarly impressive. And it should give Cadillac a much-needed boost in the fastest-growing part of the global luxury-car market.

Source: 
The Motley Fool