If you recall, Book by Cadillac is a $1,500 month-to-month subscription car sharing service that allows members to schedule out the finest vehicles Cadillac has to offer when they want, for as long as they want. These vehicles include the lithe ATS-V, the omnipotent CTS-V, the multi-role XT5 Platinum, the venerable CT6 Platinum and the imposing Escalade Platinum. Insurance and maintenance are included, as are white-glove pick up and drop off services. The concept aims to be the ultimate convenience for those who would rather not deal with some of the inconveniences associated with owning a vehicle, so long as they can afford it.
We see Book by Cadillac as not only groundbreaking, but also modernizing the concept of vehicle usage and ownership. And over time, it might prove to be a catalyst for an entirely new sales model for the auto industry.
This is because the program enables Cadillac to directly control the user experience. In other words, Cadillac completely circumvents the traditional dealership franchise model, while still getting customers behind the wheel and earning revenue from the transaction.
For its part, Cadillac claims this is not the intention. But Pandora’s box has been opened, and we’re likely standing in front of a massive paradigm shift in the way consumers have traditionally purchased automobiles, which is the same way their grandparents have, and maybe even their parents before them. But the concept of car sharing changes all that, since a brand would never have to “sell” a car per se (because pro-franchise-dealership laws make direct sales illegal in the USA), but can still monetize its products by cleverly renting them out for hours, to days, to months. In Cadillac’s case, for $1,500 a month.
A brand like Cadillac, or even greater, a company like General Motors, could wisely control its inventory by circulating vehicles in a car-sharing fleet, since cars that weren’t selling (or weren’t being ordered by dealers) would now make money. The practice gives automakers an opportunity to earn incremental (or perhaps greater) revenue, while reducing stockpiles of unsold vehicles at factories and at dealers. Getting there, however, will require establishing processes and infrastructure to support such a model… though Cadillac (and GM) already appears to have it.
To scale something like this on a national level, who would handle all of the repairs or the managing of inventory for a car sharing program like Book by Cadillac? How about cleaning, delivering and picking up the vehicles? This is where the existing dealer body would play a vital role in the success of a nationwide car sharing program. Dealers already perform all of these tasks for customers, day in and day out, making nobody better positioned to handle these responsibilities. And, should a Book by Cadillac customer be so enthralled by one of the many products they might be driving, a local dealer would be able to sell them that very product as a “traditional car sale.” Contingently, this is what Cadillac and its dealers both want. But, should a customer just choose to drive a Cadillac on a month-to-month basis, hassle-free, they can do that too by using Book by Cadillac. And they wouldn’t need to set foot in a dealership to do it.