In Cadillac’s annual dealer meeting last week in Las Vegas, the attendance by several of Cadillac and General Motors’ top brass showed dealers that Cadillac “has been given a broad mandate to reshape Cadillac,” as Cadillac global chief, Johan de Nysschen, President Dan Ammann, and GM CEO Mary Barra were all on hand.
“Both Mary Barra and Ammann essentially said: ‘We’re putting our entire credibility on the line to support Cadillac,'” said Dallas-based dealer owner Carl Sewell told Automotive News.”It was reassuring and inspirational.”
As Cadillac begins to plot its move to New York amidst middling summer sales (Cadillac’s sales are down 5 percent from the same period in 2013), De Nysschen said in an interview earlier this month that Cadillac must “bring … volume aspirations into alignment with reality and accept that you will sell fewer cars … I’m far more interested in the quality of the business than the quantity.”
De Nysschen also gave some bad news to dealers who want to see Cadillac go through its growing pains smoothly. According to an anonymous attendee, “[De Nysschen] said that things are going to get worse before they get better.”
Cadillac’s incentive spending is the highest of of 35 American brands at $6,425 per vehicle, according to Autodata Corp. This is much more than Mercedes’ ($3,538) and BMW’s ($4,457) and more than double that of Audi’s. Meanwhile, Cadillac dealers are sitting on 132 days of car inventory, compared to 52 for Mercedes-Benz (the worst of the German brands), according to the Automotive News Data Center.
The Chairman of the Cadillac National Dealer Council, Howard Drake, responded, “Until we get to the right inventory model, we can’t get to the right pricing model,” and De Nysschen agrees. He said that the high inventory is a byproduct of “overambitious” production planning. If the impending three-week plant shut-down doesn’t cut production enough, he may cut production even more.
“Yes, it’s true, we are performing below target. But compared to where we’ve been, we are putting a lot better quality business in the bank. I think that is, for me, a key to sustainability,” de Nysschen added. The meeting was followed by a party at the Cosmopolitan hotel featuring singer Sheryl Crow.