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Luxury car brands scrambling to avoid a blue Christmas

DETROIT — When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating. Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the past decade, but the trend — which has occurred in both the non-luxury and luxury sedan segments of the auto market — was particularly pronounced in October. Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 percent in October, and are down 24.8 percent for the year to date. General Motors' Cadillac brand said it sold just 779 of its CTS sedans in October. Demand for that car, designed to compete with German luxury sedans, is down nearly 33 percent for the year. "There's still a significant portion of the market that wants a car, but I'm sure there were people who preferred a horse to a car at one point." Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago. The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand. "In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs. "And we just don't see an end in sight to this trend." The Dow Jones Industrial Average has been trading at all-time highs, usually a good sign for luxury sedans, but as major automakers reported new U.S. vehicle sales for October on Wednesday, sales for passenger cars continued their slide while luxury SUV and crossover sales rose again. According to Kelley Blue Book data, in 2007 luxury sedans made up 7.6 percent of U.S. new vehicle sales, while luxury SUVs made up 4.2 percent. Through September this year, luxury SUVs made up just over 7 percent of the market, compared with 4.9 percent for luxury sedans. In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans off dealer lots, analysts said. Toyota's Lexus brand said on Wednesday it will launch its "December to Remember" year-end sales promotion for the 18th straight year.

Junkyard Gem: 1981 Cadillac Eldorado with V8-6-4 engine

Skyrocketing fuel prices caused by geopolitical events in 1973 and 1979 led to gas lines, federal fuel economy requirements, and an increasing reluctance on the part of American car shoppers to buy big, thirsty Detroit luxury machines. General Motors had pulled off some amazing technological feats in the past — the small-block Chevrolet V8 engine and Hydramatic transmission being two extraordinarily successful ones — and so Cadillac's bosses figured that a combination of computer wizardry and clever mechanical engineering would give the 368-cubic-inch Cadillac V8 a cylinder-deactivation system and resulting superior fuel economy. Here's a very rare example of one of those 1981 Cadillacs, found in a California self-service wrecking yard. The idea behind the V8-6-4 was that computer-controlled solenoids would physically disengage the rocker arms for one or two cylinders on each engine bank under low-load conditions, converting the engine from a 368-cube V8 to a 276ci V6 or 184ci V4 (that's 6.0, 4.5 or 3.0 liters, respectively, for the metric-system aficionados among us). This sort of variable-displacement magic is commonplace today, but it was science-fiction stuff in 1981. An "MPG Sentinel" display on the dash would let the driver know how many cylinders were active at the moment, and the car would get Chevy Citation fuel economy with Cadillac luxury. The V8-6-4 was the standard engine in all 1981 Cadillacs (except for the Seville, which had the troubled Oldsmobile diesel engine as the base powerplant and the V8-6-4 as an option). Unfortunately, the V8-6-4 worked about as well as the Oldsmobile diesel: very poorly. Within a few years, most owners of these engines had disconnected the rocker-deactivation solenoids and just drove their cars as regular full-time V8s. This one has the snazzy "Cabriolet Roof Treatment" option, which boasted "textured elk grain" vinyl and could be had in one of 17 available colors. Front-wheel drive gave the early-1980s Eldorado plenty of interior space, despite its more proletarian Olds Toronado origins, and these velour-covered seats made for very comfortable road trips. The price tag started at $17,550, or about $51,650 in 2019 dollars. The 1981 Imperial went for $18,311, and that car was based on the same platform as the lowly Plymouth Volare. Meanwhile, A BMW 733i cost $28,945 and a new Toyota Cressida a mere $11,599. The 1981 Cadillacs were just a little too much ahead of their time, it turned out.

Cadillac CT6 production ceases January 2020 as part of D-Ham layoffs

General Motors filed paperwork under the Worker Adjustment and Retraining Notification Act with Michigan's Department of Labor and Economic Opportunity this week, detailing events to come at the automaker's Detroit-Hamtramck Assembly Plant. Starting February 28, 814 salaried and hourly workers at D-Ham, as its called, will be laid off. The 753 workers represented by the UAW will begin receiving offers in January to relocate to facilities in Michigan and Ohio, or buyout offers. As the 4-million-square-foot plant winds down through April 3 to a skeleton crew, the Cadillac CT6 ceases production in January 2020, and the last Chevrolet Impala comes off the line on February 28. The loss of the CT6 represents the end of Cadillac's latest brief, and highly regarded, adventure into flagship sedans. It might also mean the end of the 4.2-liter Blackwing twin-turbo V8 engine, at least for the moment. Both casualties are calamities. The death of the Impala closes the door on a nameplate in production for 52 years since 1957, having started off as a top-tier trim for the 1958 Bel Air known as the Bel Air Impala, once advertised with the line, "Lets you know you're the boss." As part of the new four-year labor agreement with the UAW, GM is keeping D-Ham open to build a new line of battery-electric vehicles, ultimately investing $3 billion and tripling employment to 2,225 workers when fully operational. The agreement described the coming EV as a "van" that would commence production in late 2021, but various reports say what's actually coming is a range of premium EVs in pickup and SUV bodystyles under the program codename BT1. The easy predictions put an electric GMC Sierra and Cadillac Escalade among the EV fold, but not until 2023, according to auto industry forecaster LMC Automotive. Before that, LMC claims an electric van will debut in late 2021, along with a battery-powered rebirth of the Hummer brand in pickup and SUV forms, also in late 2021.