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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.

[UPDATE] Cadillac Blackwing gets ticket to Italy, to go to work in a supercar

UPDATE: It seems MAT's belief it had secured a supply of Cadillac's 4.2-liter Blackwing V8 was premature, and based on a handshake deal before GM sold its Turin engine center to Italy's Punch Group. Shortly after Hagerty ran the story, GM sent a statement to the outlet reading, in part, "We do not have an agreement in place with Manifattura Automobili Torino (MAT) to provide or sell the Blackwing engine. ... Our team is following up with MAT president Paolo Garella to discuss the misunderstanding." MAT also submitted a statement to Hagerty, saying, in part, "We thank GM for the clarification. Although a signed agreement was not finalized between the parties, we were under the impression that our counterpart was committing to making this engine available to MAT at conditions yet to be defined. ... We hope that this misunderstanding will not compromise our relations with GM and possible future collaborations." The original article follows: Some necessary cost-cutting at Cadillac led to switching the new CT4, CT5, and Escalade to older platforms. The revised architecture plan meant Cadillac's newest top-tier products couldn't fit Cadillac's newest top-tier engine, the 4.2-liter twin-turbo DOHC V8 known as Blackwing. That engine would serve limited duty at full power in the now-dead CT6-V, and at reduced output in the CT6 Platinum V8 trim before ending its bright, brief domestic life. But the story isn't over, the rebirth of Blackwing coming from a most surprising locale: Turin, Italy. Before the canceled Geneva Motor Show, Hagerty spoke to Paolo Garella, CEO of Manifattura Automobili Torino; that's the company better known as MAT, makers of the New Stratos and contract engineering house for boutique screamers like the Aspark Owl electric hypercar, Apollo Intensa Emozione, and SCG003C. Garella told the outlet, "We have an agreement with General Motors" for a supply of Blackwings, which would be developed and built at the General Motors Propulsion Engineering Center (PEC) in Turin. Since 2005, the PEC has been used to develop GM's global diesel engines and electronics. MAT's plan is to put the V8 into a new limited-run car MAT is creating from its own design. Then another surprising turn: Belgium-based global auto supplier Punch Group bought the PEC, with plans to work with GM on projects in progress until at least the end of 2021. Nothing changes as far as MAT is concerned, except perhaps a chance for an even closer collaboration with Punch Turin.

Cadillac CT5 spied with quad exhaust, could signal a hotter version is coming

The 2020 Cadillac CT5 just broke cover at the NY Auto Show this year, but one of our spy shooters caught one decked out in camouflage looking a bit different than the versions we've already seen. Instead of the dual exhaust on both the turbocharged four-cylinder and twin-turbo V6, this one has a quad exhaust outlet. We'll note that the placement of the quad outlets is one and the same with the two larger outlets on the CT5 already revealed. Also, the rest of the car looks relatively ho-hum. It has the wheels from the CT5 Sport trim, and the front end appears to most closely represent the Luxury trim. Some of the coverings appear to be opened up on that front end, possibly in an attempt to increase airflow. The most obvious change of them all is the quad exhaust, though, which brings us back to a conversation we had with a Cadillac representative at the car's initial media launch. As we were standing around gawking at the new CT5 in Sport trim, a brand representative told us all the "Sport" models (four-cylinders and V6s) would be getting quad exhaust, while the "Luxury" trims would get dual exhaust. We pointed at the CT5 Sport right in front of us and noted that it just had a dual exhaust setup. This ended up causing more confusion, as the Cadillac representative was adamant that they had seen the CT5 Sport with quad exhaust. When all was said and done, there wasn't exactly a clear explanation given for what was up with this mysterious CT5 model with quad exhaust, so we left it at that. We can guess, though. Perhaps the Cadillac rep had seen a Sport model with quad exhaust, but it was a future "V-Sport" variant we weren't allowed to know of yet. Cadillac hasn't revealed its future plans for the CT5 fully, but it did hint that at least one performance variant would be on the way. This camo'd up car here does not look anything like a full-on V model, but it could be the beginnings of a slightly more powerful version of the sport sedan. The 3.0-liter twin-turbo V6 makes 335 horsepower and 400 pound-feet of torque. Of course, there's always room for more power in this class, and a V-Sport model would slot in nicely to the new sedan's range. Keep in mind this all remains speculative in nature. However, our curious conversation with Cadillac combined with these spy shots signal that something could be afoot.