Cadillac Dealers Passing Time Until de Nysschen’s Vision Comes Together
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Cadillac chief, Johan de Nysschen has previously warned dealers that things would be worse before they got better. This is while Cadillac continues to revitalize its portfolio and usher in a new era of what it means to drive a Cadillac.
Now, it seems Cadillac dealers are seeing what the “worse” part of de Nysschen’s comments mean.
Automotive News reports many dealers in the Northeast and Midwest missed out on normally vital incentives as they missed sales targets for the first quarter, especially in lease-heavy markets. This combined with the lack of consumer incentives on 2015 Cadillac models makes for a very slow time for Cadillac dealers.
Uwe Ellinghaus, Cadillac marketing head, acknowledged April would be the first month where a “natural demand” would be seen for the Cadillac ATS and CTS. As the report cites, the results don’t paint a bright picture. ATS sales fell 23 percent, while CTS sales nosedived 47 percent.
The news comes as Cadillac continues its revolution as an American luxury brand, one where incentives are greatly scaled back, and restrained supply reins. Right now, it hurts, but long term it makes great sense.
The plan is to begin re-bolstering resale values, and heightening Cadillac’s image to one it has never seen. It’s a plan to put Cadillac back on the shopping lists of its German rivals. But, dealers are worried it may not materialize. Especially in one of the best luxury markets in recent memory.
“The dealer council has a lot of faith in Johan’s long-term plan,” says Keith Harvey, a member of Cadillac’s National Dealer Council. “But the sales decline is a bit of a tough pill to swallow with the industry rocking right now.”
For now, dealers march forward with the extremely strong selling 2015 Cadillac Escalade, a model which poses an entirely different issue altogether. Dealers are also taking advantage of a new two-year lease program for the 2015 Cadillac SRX, meant to draw buyers until the Cadillac XT5 bows.
Despite turbulent times, de Nysschen continues to travel to regional dealer meetings, ensuring dealers there is a light at the end of the tunnel. This is evident in Bill Wash’s words, who has a Cadillac franchise in Illinois.
“As down as I am about the recent sales and the supply being what it is, I’m much more optimistic about this franchise than I have been in years,” Walsh said. “I really think there’s light at the end of the tunnel. And it’s not an oncoming train.”
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Just traded my 2014 Corvette Stingray for a 2014,Cadillac ATS 3.6 with AWD.
The ATS is outstanding! The performance, ride, and handling excellent . The CUE navigation and audio system works well for me and fun to use—especially the voice recognition. I bought this ATS as a tweener before my next Corvette, but after a 450 mile drive last weekend I my be considering an ATS V Series coupe.
The real work is just beginning but we will see other changes than just product in the next year. Improved marketing and Dealer Service should begin this year.
As for the sales numbers look at the real numbers and not the percentages. With the increased prices they should still see a profit.
They have good product now and it will only get better. Yes before some fool says the Germans will improve too they know that and are preparing for that. Cadillac is in a place where they only need to grow sales slowly and the hold the line on prices.
If you want a better car you will need to pay a higher price. Cheapening the cars and selling them for less will only lead you to where Chrysler is on the 300 and Lincoln on their models. Volume with little profit.
I agree, you can’t build value overnight. The Cadillac portfolio may be a little slim right now. However, what they have is competitive if not better than the competition. As you said the product is coming, 3 new vehicles this year alone so it’s just a matter of time. I also concur that now is the time for Cadillac to fine tune their dealership experience and marketing campaigns. Focusing on their customers while preparing for future ones. As the line goes “build it and they will come.”
The future is bright for Cadillac and GM as a whole, I haven’t been this excited about automobiles since I was a youngster!
Typical GM . Stupid move.
I was wondering why SRX sales suddenly shot up in April.
Then, I read that GM was allowing SRX loaners to be considered ‘sales’.
And they’ve created a favorable two-year lease incentive if you’d decide to keep it or buy one.
A loaner counts as a sale…
So much for ‘real numbers’ and holding the line on prices.
Almost forgot.
By counting loaners as sales, the dealers have a much better chance at hitting their numbers and getting the quarterly bonus.
Without the bonus – that’s where you’ll see the dealers get antsy – a few no-bonus quarters in a row, they pocket less, and have less to spend on ‘upgrading their facilities’, but are pressured to upgrade.
It’s gonna be an uncomfortable year, methinks. ‘Patience’ and ‘sales manager’ – you don’t often see those words in the same sentence.
So, we’ll see, yes?
Any time a vehicle leaves the factory and goes to a dealer it is sold.
So that’s why ATS and CTS numbers are tanking? Not enough inventory?
That’s kinda hard to swallow …
Its not just the Germans that Cadillac needs to compete with . I just drove a ’15 Lexus RX350 , you want to talk about luxury ! This is in comparison to my SRX . While it is a nice suv , it is light years behind the Lexus . The Lexus is basically the same since the ’13 model year , the same year Cadillac refreshed the SRX with CUE , a new dash and grill . The Lexus is due for alot of upgrades for ’16 . The new XT5 not only needs to come out better than the SRX but they need to leap frog over all the new 5 seat suv’s coming . There is still the home market that Cadillac needs to be aggressive in , not just over seas .
Up in this neck of the woods, in Vancouver, dealers are STILL trying to get rid of 2014 models. Ouch.
Cadillac has a steep hill to climb when you consider the vast range that Audi, BMW and Benz have – 2-seater roadsters, diesel engines, event hatches. As Sloan used to say “a car for every purse (well maybe not at the bottom end) and every purpose”. With the best intensions in the world, I do not see GM funding development for a comparable range of cars to what the Germans have.
The dealers face a long drought and do not have the ridiculous servicing profits that German dealers charge to tide them over.
This is the most ridiculous message from division and marketing heads of any auto manufacturing company that I have ever heard . It is frankly unbelievable ! Have you ever heard this message before , I haven’t . I have been a store manager and business owner and you fight for every sale , you compete in the marketplace with products that are popular with the public and you have good stock levels in the peak seasons . Keeping your sales up means that you can hire and retain gifted salespeople . It means your dead stock isn’t out there for the customers or drive bys to see every day for months and months , even years !! I mean , do you hear of dead Escalade stock , NO , or dead SRX stock ? Do you know that if Caddie didn’t have those two vehicles , I can’t imagine how a dealership could retain any experienced and valued employee . Yet we wait in vain for small and middie sized CUVs in this super hot market , again , simply unbelievable !!