As of July 1st, 2015, Cadillac’s U.S.-wide inventory levels dropped to 77 days, down from a 113-day supply a year earlier. The 77-day supply is Caddy’s trimmest in four-and-a-half years, and has been a long way coming as the brand worked hard to decrease it from a 120-day supply, which has been more or less the norm for all four of GM’s U.S. brands since the automaker exited bankruptcy in 2009.
And though the decrease from 113 to 77 days supply is on the right track to Cadillac’s goal, it’s still not optimal. Cadillac chief Johan de Nysschen is looking to get inventory down to a 60-day supply, a level at which Cadillac’s luxury rivals such as BMW and Mercedes-Benz operate.
To reach the 60-day supply will be difficult, primarily due to the fact that about 500 of the brand’s 928 dealerships sell relatively few Cadillacs — just five to 10 a month on average, according to de Nysschen. These stores are instead focused on making up volume by selling vehicles from GM’s other brands — Chevrolet, Buick, or GMC. As such, de Nysschen believes that these stores are more likely to let their Cadillac inventory get stale, thereby detracting from the supply target of 60 days.
Luckily, Cadillac is already considering several solutions, one of which involves regional inventory hubs for dealers.
Comments
I still think that there needs to be a separate showrooms between Chevrolet and Cadillac since most Cadillac dealerships are shared with chevrolets
Completely agree. That is one of the key pieces missing in building Cadillac as a true competitor to the likes of BMW, Mercedes and Audi.
Here, north of the 39th, I see that in all other luxury car makers but not Cadillac.
I think we need to let the new management finish the job they started. The dealers will be much different in the future but it is not going to happen over night. GM and the Dealers are not just going to go out and build new building in one year.
I expect that if Johan wants to separate Cadillac from GM even all the way to the earnings reported that the odds are he will not want other GM product in the same showroom.
Designing buildings, securing property and securing the funds all the while getting new and more product out to secure the dealers sales will take time.
How quickly it’s forgotten that about 450 were laid-off at Lansing-Grand River (where ATS and CTS are assembled). By reducing the number of cars built, you have…… less “days supply”! What they should strongly consider is cutting about 450 dealers? With only about 15,000 units per month “going over the curb”, you don’t need anywhere close to 928 dealers. With fewer dealers it might add a bit of exclusivity to the brand and even increase the coveted “ATP”
Is that 450 figure before or after adding in 2016 Camaro production?
Show GM a easy way to cut the dealers and you will get a corner office. They have tried 6 ways to Sunday trying to cut all brand dealers and generally get stopped in court or even in Washington. During the Bail out they trued to kill many dealers only to be stopped buy the government.
Anything short of buying them out for large sums of money it is a difficult thing to close a dealer outside killing the brand.
“buying them out for large sums of money”………Last time I checked GM had billions in cash. Why not “Dare Greatly” and buy out 200 poor performing Cadillac stores. Many of these are selling other GM brands anyway? Everybody wins! Many of these stores are only selling a few new Cadillacs a month anyway?? OK, so they miss a few big scores on the Escalade every year, waive the cash and a few other incentives (for the other GM brands they sell) and move on.
No, ‘daring greatly’ apparently means creating an inventory supply system – so, you spend your money buying real estate, and keeping inventory that low-performing Cadillac dealers can order from when they occasionally sell a car.
And creating an order and transport system, that costs money, too.
So Johan’s dialed-back his original observation (too many dealers), by proposing a system that keeps stragglers from staging a revolt.
Meanwhile, Audi sells more vehicles with a third as many dealerships.
I think Johan’s initial observation was spot on – I wonder if buying out low performers (who damage the brand image, btw) is any less expensive than building-out an entire, multi-location delivery system. Y’know, to keep a dealer in North Platte or Chattanooga happy …
You work within your means, bud. As scott3 mentioned, it is very difficult to cut a dealer. The bankruptcy offered a great opportunity to do so, but even then it was difficult to do so given the protests by some dealers. It has nothing to do with Dare Greatly or otherwise… it has everything to do with working within your means.
By the way, the reason Audi sells more vehicles than Cadillac is because the Volkswagen Group embarked on rejuvenating Audi in the 1990s, roughly 10 years earlier than GM did with Cadillac (half-assedly), and roughly 25 years before GM did with Cadillac (fully, last year). Plus, Audi carefully planned its vehicle lineup and strategy, allowing crossovers and two flaghsips… something that Cadillac is either only getting now or will get in a few years. It’s not about making excuses, but you need to see how it all started to make educated assumptions about how it will all play out in the future. To criticize now, when the Cadillac turnaround is only a year into the making, is plain stupid.
Chris that 450 figure is before adding the ’16 Camaro . Those 450 will be hired back when production starts . However Cadillac production will not change from its current JPH ( jobs per hour ) , unless demand increases .
Here in Lansing we have only one Cadillac dealership ( Suburban Cadillac of Lansing ) . It changed hands about a year and a half ago . They have done alot of work in their service bay , and seperated it from where the service is actually done so you cannot even see it anymore . This site has sold nothing but Cadillacs for more than 50 years .
So , inventory of the ATS & CTS are due to the layoff of those people and the decrease in line speed . The lots where the new cars sit before transport are not nearly as full as 6 months ago .
Well, matching supply with demand — rather than overproducing — is one of the differences between old and new GM.
Now, the goal should be to increase demand and thereby increase supply. And they can increase sales easily by discounting the cars… but that’s not part of the newfound Cadillac strategy of building the brand. So in the short term, the JPH at Lansing Grand River will be lower than before. But in the long term, say by 2020-2025, this should not be a concern as demand (at non-discounted) prices will increase for the ATS and CTS (and their CT% replacements), given that they do everything over the next 5-10 years.
Since Johan de Nysschen obviously believes Mercedes, Audi and BMW are far superior products than Cadillac what makes you think consumers would think otherwise? Johan de Nysschen reinforces the notion that Cadillac is inferior every time he puts a Mercedes or BMW or Audi on a pedestal by using them as a benchmark for Cadillac.
Nobody uses Cadillac for a benchmark anymore, not even General Motors.
That’s because Cadillac has been mismanaged by GM since roughly the 1980s up until being started over in the early 2000s, and finally being taken seriously as a division (rather than a brand) in 2014.
Sure, the German 3 are being used as benchmarks now… but that’s only for business and operational items, such as days supply, dealer operations, marketing, etc. But the point is that Cadillac can and will return to greatness, given that the strategy being formed today ends up being planned and executed properly.
Chris
Believe there is still some mismanagement at the current GM/Cadillac.
The August inventory figures I saw for Cadillac are overall a very stellar 69 days down from 77 in July. Now that is the good news.
Cars are 107 days, up 12 from July and trucks/SRX down 14, biggest driver was SRX down 23(incentives play a nice part in this).
From July to August, the CTS went from 103 to still 100, the XTS from 64 to 62 and the ATS went from 110 to 154! Why would you continue to pump out vehicles when you can’t sell them?
So you really have to delve into the figures to see if one figure is the answer. Here the 69 looks great, but the car portion is still putrid!