Lexus News: The Uncertain Future of the Lexus GS and IS

[smk4565]

3 hours ago, balthazar said:

Ideally, mainline brands in 2020 (Chevy, Ford, Nissan, Mercedes, etc) should build 2 sedans, small & mid-sized.
The luxury brands should build mid- and full-size.
 

See my other post, but the 2 of the top 3 selling luxury vehicles in the USA are small sedans, with a mid-size crossover being the 3rd.  And the XT5 is up there too, a mid-size crossover.  Look at CTS and CT6 sales or Continental sales, all dead in the water, Infiniti Q70 and Lexus GS, dead in the water with one foot in the grave.  The only full size luxury car that consistently sells over 1,000 units a month is the S-class, and most of the mid-sizers struggle to hit 2,000 a month unless it is a an E-class or 5-series.  Disregarding small luxury cars is a horrible idea.

[balthazar]

42 minutes ago, smk4565 said:

That is odd because the top 3 selling luxury products in the USA last year were the Lexus RX, 3-series and C-class.  And small sedans as a segment were about flat last year...
...I am not buying into people don't want small cars...

3-series was down 16% vs. 2016 (70K > 59K) while the 5-series was up 25%.
MB CLA was down 20%. The bottom is falling out of small 'lux' sedans, too.

[smk4565]

26 minutes ago, regfootball said:

 

with regards to GM and the sedan market in the USA

 

Cadillac:

ATS was a great idea but it had less space inside than it should have.  And so unless there is a huge need in another market for a compact Cadillac (CT3) I think they don't need one for 2020.  I do think that any future compact Cadillac could be flexible on a RWD vs FWD chassis depending on execution.

Upcoming CT5 IMO is likely to be in a slot between what we traditionally have considered CTS sized and STS sized.  At a minimum the interior needs to have more accommodations than the now current CTS.  But not much more, if any, larger physically.

CT6 of course will continue and is 'large enough' I think.  My only thought on CT6 size is it could be wider by a couple inches inside. 

If cadillac were to add a range topping sedan, it should be more to create a splash with a new design theme or to really break the mold.  For example.... Something Escala like, CT6 sized or larger, or something with a hatch.  Or something sexier than a Tesla  (or all of that).

The CT6 is either replaced by the new design or coexists with it.  The CT6 is the old persons Caddy in that scenario then, and the new design is the young persons large caddy.

Buick

I still like the idea of a Verano but admit it doesn't have the sales legs anymore.  I do think since the Regal sportback is the entry Buick 'sedan' now, it is just fine for that, but they nice to watch prices and redo the packaging for greater value and equipment.

Since the LaCrosse exists, in 2020 I have no issues with it carrying the large sedan torch for Buick, but I do think interior improvements and similar value and packaging propositions are in order.  With fewer sedan buyers, this car really should be increasing sedan market share based on value and ride comfort.  

I really do think the Avenir could have rebooted the large sedan market at accessible price, and if they did that for 2020 (pipe dream) I would endorse it and might even sign on for it 'replacing' the LaCrosse unless the Lacrosse were repackaged to move downscale some and replace the Impala.

 

 

 

 

Chevy

I still see the Cruze sedan being needed even if it is selling fewer copies.  This is a class of car for entry level new car buyers.  Cruze should grow a bit to be a size clone to match Civic if they redo it.

Malibu needs to continue in this catch all midsize segment.  However, if Impala is discontinued then Malibu needs to increase some in size and offer more flexible packages to allow for larger engine choice easier etc.

I think the Impala can literally continue in its current body 2-4 more years (with an interior redo), or it could be axed if Buick were to take on those sales with the LaCrosse.  If in 2-4 years sedans rebound then they can redo the Impala.  But i think the Impala name right now may be better off transferred to some kind of sexy large crossover which doesn't seem to be the sort of thing GM is capable of.

If the LaCrosse or Avenir or combo of LaCrosse and Avenir could pick up lost Impala sales then it may be ok to kill the Impala.  Then sedans really do become more of an effective niche with a Buick tag on them IMO.

 

 

 

Cadillac is supposed to get a small car, so they would have a 3 sedan line up, I don't see any reason for a car bigger than the CT6, which already has the footprint similar to the Escalade, that is a big vehicle, and the CT6 isn't lighting up any sales charts, why make something bigger.  If you want to load up content and make it nicer and more expensive great.  CT5 is already testing, we'll see in a year or two what it is.

Chevy I feel becomes the Cruze and Malibu, I can't see the Impala surviving Sedan-ageddon.  Unless they downsize the Cruze to like 176 inches long, and make it replace the Sonic and be competition for the Accent, Versa, and cars like that.   Then make the Malibu 185 inches long, sort of like Pontiac Grand Am size where it is a little bigger than a Corolla or Civic but similar price point and then make the Impala like Honda Accord size, or current Fusion size of 195 inches long.  I prefer that plan because you keep the Impala name plate and you keep an entry level car.

Buick I think its possible they have no sedans past 2020.  If they do, then I imagine it would be a larger mid-size, in between the current Regal and Lacrosse, those 2 can merge into one product.  

[balthazar]

14 minutes ago, smk4565 said:

I don't see any reason for a car bigger than the CT6, which already has the footprint similar to the Escalade, that is a big vehicle...

Simple- the CT6 isn't large enough to be the final range topper from Cadillac.
And 204-in isn't 'large', it's just larger than the mid-size cars. A Rolls is 227".

[smk4565]

6 minutes ago, balthazar said:

3-series was down 16% vs. 2016 (70K > 59K) while the 5-series was up 25%.
MB CLA was down 20%. The bottom is falling out of small 'lux' sedans, too.

2017 sales volume in the US, (China and Europe could be a whole other story)  These are the top sellers from each brand

Lexus RX: 108,307

BMW 3+4 series:  99,083

MB C-class: 77,447

Cadillac XT5: 68,312

Audi Q5: 57,640

Acura MDX 54,866

Infiniti Q50: 40,749

And as honorable mentions, the RDX, E-class, GLE and Lexus ES and NX all topped 50,000 units.   So of the top 12 you have 3 small sedan, 2 mid-size sedan, 3 small crossover, 4 mid-size crossover.  The MDX is the biggest thing on this list, if I were a luxury brad I wouldn't be pouring money into full size product, unless it is something like an Escalade or S-class that is a cash cow.

[smk4565]

5 minutes ago, balthazar said:

Simple- the CT6 isn't large enough to be the final range topper from Cadillac.
And 204-in isn't 'large', it's just larger than the mid-size cars. A Rolls is 227".

I suppose Cadillac could do a Phantom or even Ghost sized car for $150,000 but who is going to buy it?  I just can't see them finding a business case for something like that.  

[balthazar]

OK, so you want to combine model lines into 1 total.

BMW has a 2-dr, 4-dr and conv in the 4-series, and (2) 4-drs and a wagon in the 3 series. That's 6 body styles. I don't know/care if all 6 were there in 2016, but in 2017, combined, those two lines fell 7%.

But the 3 is no longer the small sedan at BMW- that's now the 2-series (2-dr, conv, and wagon) plus I assume you'll want to add in the 1-series (4-dr hatch) to be consistent.

2 series alone was down 24% last year and is only running at 28% of the volume of the 4-series. The demand is weak at best. Add to the pot the much thinner margins at the bottom end and ask yourself why a lux brand would want to wade into the mucky shallow end of the lake.

[balthazar]

3 minutes ago, smk4565 said:

I suppose Cadillac could do a Phantom or even Ghost sized car for $150,000 but who is going to buy it?  I just can't see them finding a business case for something like that.  

I know you're super literal, but try and follow the big picture.
There's a LOT of room between 204" and 227"- that's all I'm saying.

CT6 sold 10,5xx units in the US in '17, which was up 15% over '16 (tho I think '16 was the ramp-up year, right?) That's still positive growth. Thru March, the CT6 ticked up another 3%, still positive growth on a high margin product. If it were showing a 16% or 20% drop, I'd have to look at the bottom line WRT recommending it's continuation.

[smk4565]

50 minutes ago, balthazar said:

I know you're super literal, but try and follow the big picture.
There's a LOT of room between 204" and 227"- that's all I'm saying.

CT6 sold 10,5xx units in the US in '17, which was up 15% over '16 (tho I think '16 was the ramp-up year, right?) That's still positive growth. Thru March, the CT6 ticked up another 3%, still positive growth on a high margin product. If it were showing a 16% or 20% drop, I'd have to look at the bottom line WRT recommending it's continuation.

But the CT6 is a 2 country car, USA and China, so we are talking like 20k units a year and that is with a $56k starting point. If they go over $100k, how much demand is there for a Cadillac at that price point?  The E-class outsells the CT6 about 5-1,  CT6 also sells a bit like an Audi A6 in the USA, if you put a Cadillac in the $100k+ range and is outsold 5-1 the way the S-class outsells the A8, then you are talking like 300 cars a month maybe, another 200 or so in China.  There isn't a lot of volume to be found.

I think they are better off with an SUV above the Escalade if they want to do a $100,000+ vehicle.  

[balthazar]

I'm still standing here talking, and now you're way across the cornfield talking at the sky.

We were talking size, now you're wrapped up in price. All I said is, there's room above the CT6 in size at Cadillac. Do I prefer 10,000 CT6 per year, or 100,000? 10,000 every time, as long as it's profitable.

[regfootball]

I see the CT6 continuing to grow volume, particularly after the XTS goes away. By then the new will be gone and they will have a greater percent of the lesser msrp cars. And Cadillacs always sell at discount. It won’t be new anymore so I see them repacking the CT6 to sell in greater volume once the XTS dies and a lot of the development cost of the CT6 is skimmed off the first couple model years. It will become more accessible like a DTS was. You’ll have a bunch that sell with the 3.6 at cheap price and they’ll make money on the twin turbo 6 and 8

[ccap41]

14 hours ago, smk4565 said:

That is odd because the top 3 selling luxury products in the USA last year were the Lexus RX, 3-series and C-class.  And small sedans as a segment were about flat last year, while mid-size sedans dropped and large sedans got crushed.  Small crossover is the fastest growth segment.  So I am not buying into people don't want small cars, people deemed the CR-V and Rav4 too big so they had to get products smaller.   I don't see Honda or Toyota putting out stuff bigger than the Pilot or Highlander due to demand for big vehicles, and Toyota has let the Sequoia die on the vine because there is no point dumping money into a dinosaur that CAFE will kill off.

You completely blew past the word "CARS" and assumed everything small is a "car".

[Drew Dowdell]

14 hours ago, balthazar said:

OK, so you want to combine model lines into 1 total.

BMW has a 2-dr, 4-dr and conv in the 4-series, and (2) 4-drs and a wagon in the 3 series. That's 6 body styles. I don't know/care if all 6 were there in 2016, but in 2017, combined, those two lines fell 7%.

But the 3 is no longer the small sedan at BMW- that's now the 2-series (2-dr, conv, and wagon) plus I assume you'll want to add in the 1-series (4-dr hatch) to be consistent.

2 series alone was down 24% last year and is only running at 28% of the volume of the 4-series. The demand is weak at best. Add to the pot the much thinner margins at the bottom end and ask yourself why a lux brand would want to wade into the mucky shallow end of the lake.

BMW does that goal-post moving all the time.  They like to claim they have 76 models, but they count the 3 body styles of 3-series and 3-body styles of 4-series as a single sales number.

[Drew Dowdell]

13 hours ago, smk4565 said:

But the CT6 is a 2 country car, USA and China, so we are talking like 20k units a year and that is with a $56k starting point. If they go over $100k, how much demand is there for a Cadillac at that price point?  The E-class outsells the CT6 about 5-1,  CT6 also sells a bit like an Audi A6 in the USA, if you put a Cadillac in the $100k+ range and is outsold 5-1 the way the S-class outsells the A8, then you are talking like 300 cars a month maybe, another 200 or so in China.  There isn't a lot of volume to be found.

I think they are better off with an SUV above the Escalade if they want to do a $100,000+ vehicle.  

The E-Class is used as a taxi, that's where a huge bulk of the volume comes from. It is the Crown Vic of Europe. It is the Caprice of China.

CT6 doesn't get used as a taxi

[Drew Dowdell]

12 hours ago, regfootball said:

I see the CT6 continuing to grow volume, particularly after the XTS goes away. By then the new will be gone and they will have a greater percent of the lesser msrp cars. And Cadillacs always sell at discount. It won’t be new anymore so I see them repacking the CT6 to sell in greater volume once the XTS dies and a lot of the development cost of the CT6 is skimmed off the first couple model years. It will become more accessible like a DTS was. You’ll have a bunch that sell with the 3.6 at cheap price and they’ll make money on the twin turbo 6 and 8

I think you're half right.  I do see them increasing in volume, but not by discounting it.  With the extremely handsome update to an already handsome car coming, I doubt they'll feel the need to discount the car any.  They will increase volume simply by moving mid-range XTS buyers  to CT6 (base AWD XTS is only $3k less than base CT6 AWD), and base XTS buyers will either step up to CT6 or down to CT5.  XTS V-Sport ($71,490) buyers will feel quite comfortable in a CT6 Premium Luxury 3.0TT AWD ($68,290 before any options).

[regfootball]

i guess when i mentioned the discounting i sort of was thinking there would be a greater inventory supply of the 70k +/- versions instead of the insane 90k versions, LOL

 

and then the dealer discounts etc is another 10 grand off.

Edited June 19, 2018 by regfootball

[smk4565]

13 hours ago, balthazar said:

I'm still standing here talking, and now you're way across the cornfield talking at the sky.

We were talking size, now you're wrapped up in price. All I said is, there's room above the CT6 in size at Cadillac. Do I prefer 10,000 CT6 per year, or 100,000? 10,000 every time, as long as it's profitable.

So you want a car that is 10 inches longer than a CT6 at like $75k?  They are going to run into the same product overlap problem they now with sedans.  They would have to go to $100k to clear the CT6 V8.

[smk4565]

1 hour ago, Drew Dowdell said:

The E-Class is used as a taxi, that's where a huge bulk of the volume comes from. It is the Crown Vic of Europe. It is the Caprice of China.

CT6 doesn't get used as a taxi

And yet the E-class still has more status or brand appeal than a CT6.  They have had E-class taxis for 40 years and that hasn’t hurt Mercedes image one bit.  The huge volume keeps the dollars rolling in to support Daimler’s massive R&D budget.

13 hours ago, regfootball said:

I see the CT6 continuing to grow volume, particularly after the XTS goes away. By then the new will be gone and they will have a greater percent of the lesser msrp cars. And Cadillacs always sell at discount. It won’t be new anymore so I see them repacking the CT6 to sell in greater volume once the XTS dies and a lot of the development cost of the CT6 is skimmed off the first couple model years. It will become more accessible like a DTS was. You’ll have a bunch that sell with the 3.6 at cheap price and they’ll make money on the twin turbo 6 and 8

Agreed, I could see the CT6 being Cadillac’s Dodge Charger/Challenger.  You advertise the high trim V8 model but in reality 80-90% of the sales are the base V6 with little equipment.

[Drew Dowdell]

6 minutes ago, smk4565 said:

And yet the E-class still has more status or brand appeal than a CT6.  They have had E-class taxis for 40 years and that hasn’t hurt Mercedes image one bit.  The huge volume keeps the dollars rolling in to support Daimler’s massive R&D budget.

Agreed, I could see the CT6 being Cadillac’s Dodge Charger/Challenger.  You advertise the high trim V8 model but in reality 80-90% of the sales are the base V6 with little equipment.

Er... no.  Most CT6s are sold at least mid-level.  Dealers don't even stock the base 2.0T, it is by order only. 

The E-Class has more status here because it was never used as a taxi.  It has no particular status in the EU.  Europeans understand it can be optioned up nicely, but they are just as likely to get into an orange/beige one and driven to the airport.  The vast majority of E-Classes in Europe are not privately owned... just like the Crown Vic here.  Germans buy german vehicles.  This isn't rocket science.

[ccap41]

25 minutes ago, smk4565 said:

So you want a car that is 10 inches longer than a CT6 at like $75k?  They are going to run into the same product overlap problem they now with sedans.  They would have to go to $100k to clear the CT6 V8.

Why not start it at like 90-95k? I mean at this size we're talking ultra premium type of vehicles so they shouldn't cheapen out anywhere on a vehicle like that. 

[G. David Felt]

14 hours ago, smk4565 said:

 The E-class outsells the CT6 about 5-1,

http://media.daimler.com/marsMediaSite/en/instance/ko.xhtml?oid=32692930&ls=L3NlYXJjaHJlc3VsdC9zZWFyY2hyZXN1bHQueGh0bWw_c2VhcmNoU3RyaW5nPTIwMTcrbWVyY2VkZXMtYmVueitzYWxlcyZzZWFyY2hJZD0xJnNlYXJjaFR5cGU9ZGV0YWlsZWQmYm9yZGVycz10cnVlJnJlc3VsdEluZm9UeXBlSWQ9NDA2MjYmdmlld1R5cGU9bGlzdCZzb3J0RGVmaW5pdGlvbj1QVUJMSVNIRURfQVQtMiZ0aHVtYlNjYWxlSW5kZXg9MCZyb3dDb3VudHNJbmRleD01&rs=1

This is the global report of which in 2017 the E-Class sold 350,000 units world wide of which China and India more than doubled E-Class Sales of the extended length version to services and Europe picked up on buying the extended length E-Class again in services.

Services is hidden code for Taxis / limo driving. 

Did they sell a ton of E-Class? YES

Did it outsell CT6? YES

Is it sold heavily into fleets? YES

Comparing CT6 to E-Class is an Apple to Orange comparison if you go by price or total sales as CT6 is not fleet sold that anyone is aware of. E-Class is FLEET SOLD.

So do you want the girl that is passed around to everyone or the Princess?

I take the Princess, aka CT6.

[ccap41]

Sales still don't necessarily mean better car... 

[regfootball]

1 hour ago, Drew Dowdell said:

Er... no.  Most CT6s are sold at least mid-level.  Dealers don't even stock the base 2.0T, it is by order only. 

The E-Class has more status here because it was never used as a taxi.  It has no particular status in the EU.  Europeans understand it can be optioned up nicely, but they are just as likely to get into an orange/beige one and driven to the airport.  The vast majority of E-Classes in Europe are not privately owned... just like the Crown Vic here.  Germans buy german vehicles.  This isn't rocket science.

But the 2.0 is gone for 2019.  so the 3.6 sort of becomes the base level.  there will probably be a fairly even split of 3.6 vs 3.0tt.  to make up that 90+ % of CT6 sales.

the 2.0t CT6 will become collectibles.  and will be selling cheap at auctions.  Non snow state buyers will get a nice used 2.0t RWD for midsize chevy money in about 1-3 more years.

[Drew Dowdell]

Yes, the 2.0 is gone, but that won't effect sales since no one was buying it or even stocking it. Don't expect a price drop for the 3.6  except that there will be a RWD 3.6 available, so an option delete credit there. I'm wondering if the 2.0t will continue in China though.

[G. David Felt]

6 minutes ago, Drew Dowdell said:

Yes, the 2.0 is gone, but that won't effect sales since no one was buying it or even stocking it. Don't expect a price drop for the 3.6  except that there will be a RWD 3.6 available, so an option delete credit there. I'm wondering if the 2.0t will continue in China though.

Considering the stupid displacement tax they have, I would totally think they would keep the 2.0T 4 banger going for China.

[ccap41]

Weird that you had to order a 2.0T CT6. There actually happened to be one in the parking garage at work one day, it had the 2.0T badge on it. 

[smk4565]

3 hours ago, Drew Dowdell said:

Er... no.  Most CT6s are sold at least mid-level.  Dealers don't even stock the base 2.0T, it is by order only. 

The E-Class has more status here because it was never used as a taxi.  It has no particular status in the EU.  Europeans understand it can be optioned up nicely, but they are just as likely to get into an orange/beige one and driven to the airport.  The vast majority of E-Classes in Europe are not privately owned... just like the Crown Vic here.  Germans buy german vehicles.  This isn't rocket science.

Well I did say base V6.

Brits, French, Austrian, Swiss, and Scandinavians seem to buy German cars too.  Cadillac and Lexus never could crack the code to beat the E-class in Europe, and with the heavy taxi use it should be easy to have more status and image.  But the truth is the E-class is a much better car than the Lexus GS ever was, or the CTS/STS ever were, likewise for the Infiniti M35/Q70, and that is why the E-class is still the #1 selling mid-size luxury car and those other cars are dead or about to be cancelled.

[smk4565]

2 hours ago, Drew Dowdell said:

Yes, the 2.0 is gone, but that won't effect sales since no one was buying it or even stocking it. Don't expect a price drop for the 3.6  except that there will be a RWD 3.6 available, so an option delete credit there. I'm wondering if the 2.0t will continue in China though.

I think it will continue in China because of the Displacement Tax.   I imagine one day they will just jack up the displacement taxes sky high combined with their EV mandate to rid the country of ICE cars.

2 hours ago, dfelt said:

Considering the stupid displacement tax they have, I would totally think they would keep the 2.0T 4 banger going for China.

Agreed.  Get ready to laugh but they should probably put the 2.0T in the Escalade and sell it there.  Preferably with some electric boost.

[Drew Dowdell]

They have the new 2.7T

[smk4565]

6 hours ago, Drew Dowdell said:

They have the new 2.7T

Displacement tax still hits that,  7.5% tax on 1.6 to 2.0 liter engines, as high as 20% on 4 liter engines.   The 2.7T would get hit with the same tax as the Cadillac 3 liter TT V6, might as well use that then. 

[balthazar]

11 hours ago, smk4565 said:

So you want a car that is 10 inches longer than a CT6 at like $75k?

I want a Cadillac about 10 inches longer and 3 inches wider than the Ct6. Whether the next gen CT6 grows in size, or a 'CT8' appears, I'd like to see a range topper noticeably larger.

As for pricing, overlap already occurs everywhere. Doesn't the E63 overlap the S550 by 10 or 15 grand?

Edited June 20, 2018 by balthazar

[Drew Dowdell]

I like the E-Class, but the CT6 is way more handsome of a vehicle.  When you see those lightsaber fangs coming at you, it really grabs your attention.

 

 

9 hours ago, smk4565 said:

Displacement tax still hits that,  7.5% tax on 1.6 to 2.0 liter engines, as high as 20% on 4 liter engines.   The 2.7T would get hit with the same tax as the Cadillac 3 liter TT V6, might as well use that then. 

It's an Escalade. Luxury comes at a price. 

[smk4565]

Luxury comes at a price but the GLS has a 2.998 liter engine or whatever it is to keep the displacement tax under the 3 liter level, which I think is 9% vs 20% tax on the Escalade.  And Cadillac isn’t really in a position to sell at a price premium over a Mercedes or Audi which the Chinese love.

[G. David Felt]

12 minutes ago, smk4565 said:

Luxury comes at a price but the GLS has a 2.998 liter engine or whatever it is to keep the displacement tax under the 3 liter level, which I think is 9% vs 20% tax on the Escalade.  And Cadillac isn’t really in a position to sell at a price premium over a Mercedes or Audi which the Chinese love.

I would not bet on that. Cadillac is picking up steam and doing better than many would think in China. Latest info on Cadillac in China:

[ccap41]

26 minutes ago, smk4565 said:

Luxury comes at a price but the GLS has a 2.998 liter engine or whatever it is to keep the displacement tax under the 3 liter level, which I think is 9% vs 20% tax on the Escalade.  And Cadillac isn’t really in a position to sell at a price premium over a Mercedes or Audi which the Chinese love.

It's a much larger vehicle so it has a chance to sell at a premium over a GLS. 

[Drew Dowdell]

1 hour ago, smk4565 said:

Luxury comes at a price but the GLS has a 2.998 liter engine or whatever it is to keep the displacement tax under the 3 liter level, which I think is 9% vs 20% tax on the Escalade.  And Cadillac isn’t really in a position to sell at a price premium over a Mercedes or Audi which the Chinese love.

You keep moving those goalposts, that's what you're good at.

Two posts ago I suggested they use the new 2.7 liter, so it would be below the 3.0 gas tax level.  Your suggestion was that they use the 2.0T.  I'm sure your very next complaint was that a Chinese Escalade only had a 2.0T while the GLS has a 2.998 liter.

[smk4565]

3 hours ago, Drew Dowdell said:

You keep moving those goalposts, that's what you're good at.

Two posts ago I suggested they use the new 2.7 liter, so it would be below the 3.0 gas tax level.  Your suggestion was that they use the 2.0T.  I'm sure your very next complaint was that a Chinese Escalade only had a 2.0T while the GLS has a 2.998 liter.

I first said they should use the 2.0T with electrification to get under the 2 liter gas tax level.  

You said they should use the 2.7 liter, to which I said is pointless because you can use the 3.0TT which is taxed the same as a 2.7.  

With the new GLS I wouldn’t be surprised to see the newly updated turbo 4 gonin there for China, but they might not care if the 3 liter sells well.

[ccap41]

They could get the power numbers they need with the 2.0 but it would be a dog on fuel to the point it isn't even worth it. 

[Drew Dowdell]

32 minutes ago, smk4565 said:

I first said they should use the 2.0T with electrification to get under the 2 liter gas tax level.  

You said they should use the 2.7 liter, to which I said is pointless because you can use the 3.0TT which is taxed the same as a 2.7.  

With the new GLS I wouldn’t be surprised to see the newly updated turbo 4 gonin there for China, but they might not care if the 3 liter sells well.

The 2.7T with electrification would be more than enough to move an Escalade around. A 3.0TT in an escalade would be too much in a country where gas is already over $4 a gallon. I got 27mpg out of it in a CT6, but an Escalade couldn't count on that.