With auto sales booming, it should be all smiles during dealer-factory meetings for most automakers and brands, but not for Cadillac. General Motors’ luxury brand is currently stuck in a seven month-long sales glut, and Cadillac boss Johan de Nysschen isn’t about to deliver them any news surrounding a short-term sales turnaround.
de Nysschen told Automotive News that he expects that “the dealers will not be happy” when they meet in San Francisco this week. He’s alluded to the fact that not all Cadillac dealers will be able to survive the road ahead. Notably, German rivals like BMW and Mercedes-Benz have less dealers, which makes it easier to maintain the certain level of customer service and overall quality that luxury buyers expect from a dealer when paying $60,000 or more for a car.
“Dealers want to believe in Johan,” Howard Drake, chairman of Cadillac’s National Dealer Council and owner of Casa de Cadillac in Sherman Oaks, California, told AN in an interview. “But this misery can’t be open-ended. Dealers need to understand what this sacrifice is for and know that it isn’t indefinite.”
Cadillac and de Nysschen recently lowered prices on the CTS amid dealer complaints the prices were too high, and announced plans to boost Escalade production to remedy tight supplies of the full-size SUV. Both of these moves should help keep dealers happy and help bolster sales, while a new advertising campaign, set to launch at the Oscars, should provide further support. Cadillac will also offer “competitive incentives”, with de Nysschen saying that the vehicles “won’t be the cheapest,” but “wont be the most expensive”, either.
Once Cadillac dealers sell down their 2014 inventory currently on hand, de Nysschen plans to stick to a 60-day supply of all Cadillacs, which is closer to the sales strategy employed by German brands BMW, Mercedes-Benz, and Audi. By comparison, Cadillac ran nearly double that all last year, which led to it having the highest incentives in the luxury market, less than ideal for a luxury brand that aims to convey exclusivity and status.
In addition to cutting supply to create more tension among production allocation, de Nysschen also plans to do away with the automaker’s dealer-incentive program, which incentives dealers for ordering more cars. Instead, de Nysschen will award dealers who have exceptional customer service and invest heavily in their facilities.
Comments
For sure the dealers wont be happy at the meeting . Nysschen has already been quoted as saying the division has to many dealers and that means people are going to lose their jobs . It has already happened in Lansing, Mich. were we had one Cadillac dealer that was family owned for decades . Now this dealership is owned by a company that ownes several other dealerships in the state . The old dealer sold Cadillacs exclusively ( new cars ) . Now this dealership has brought its own people to the area and we have lost what was a personal enviroment from the buying experience to the repair side . It was not unusual to have the salesman call you to see if you needed anything . And if you were a repeat customer you always got fisrtt class treatment . People will say change is good , but not always ,
Service has always been my biggest complaint about Cadillac, Durham Hendrick auto mall in Durham,NC is the perfect example, they try to smash Buick Chevy and Cadillac into 1 dealership. 1 service department.. so when you pull up you wait in a long line no one comes to greet you. It feels like a flee market and they treat everyone the same weather its a Chevy or a Cadillac. The hendrick dealership in Cary NC is better because they separated all the dealers, separate buildings and when you pull into the Cadillac service drive thru its a brick floor and immediately someone comes to greet you. While its better its still not great, half of the loaner cars are tiny Saab 9-3’s…. they should have new Cadillacs as loaner cars to kind of make you want the new car
I lease a 2013 Cadillac ATS 2.0 T all wheel drive. I love the car. It’s quick handles amazingly well and is good looking. I leased the vehicle at City Cadillac in Long Island City. There were Buick Veranos being sold side by side with the Caddy’s and the showroom definitely needs some sprucing up. The car is serviced at Paul Conte Cadillac in Freeport N.Y. Their showroom is beautiful. As for the service area it has no different feel than the Chevrolet service area I once used years back for my Trailblazer except for the coffee and mini bagels and cream cheese. I think Mr. de Nysschen needs to walk the Cadillac Delaership owners through a few Mercedes BMW and Lexus dealerships to show them what a luxury dealership should look like and the professionalism that should be employed in the service areas. Love the car as for the dealerships, meh!
That sound of rubber screeching to a stop and slamming into reverse can be heard in Mr. de Nysschen’s subsequent remarks two days later in California – “wait, no, I didn’t mean that, nothing to be afraid of, won’t be closing down dealerships”, etc.
So GM is going to put $20 BILLION into Cadillac. Caddy’s at least 4 years away from the things that are selling (crossover SUVs). Their electric, $70,000 dressed-up Volt was a total disaster. This guy’s gonna be gone in 18 months.
And the only company who makes Cadillac’s negative 2014 performance look passable is McDonald’s even more negative performance. GM and McD’s are really quite similar, when you think about it – sitting there, watching the world pass them by for better choices.