Cadillac President, Johan de Nysschen, has put forth the final touches for his brand’s revised dealership program. Titled, “Project Pinnacle“, the dealership program aims to transform the Cadillac buying experience, while setting new standards for dealerships and how stores operate.
Automotive News obtained a draft of the final plan, shedding light on what we can expect to see from Cadillac dealerships in the near future. The plan will break dealerships down into tiers, with each tier expected to offer an assortment of features. Some dealerships are welcoming the changes, while others say it’s one too many hoops, for potentially less money.
“I’ve crunched the numbers,” said one high-volume Cadillac dealer in the Northeast. “They’re asking us to take on a lot more overhead to make less money.”
When Project Pinnacle goes into effect, dealers will be paid out bonus money for hitting sales and customer relation targets, while also earning money through certified pre-owned sales. It sounds easy enough, but when tacking on additional overhead through new requirements, it’s also easy to see why dealers may be skeptical.
The five tiers assigned correlate to what dealerships will be expected of adding to their facilities. Tier 1 are the largest Cadillac dealers, and will be expected to offer the most in terms of customer service and employees, such as a concierge, plus pick-up and drop off services. Tier 5 may transform into service only, which are normally bundled in with other GM brands.
For some tier 5 dealers, the changes may not even be worth the hassles, as one dealer stated.
“Right now I have Chevrolet salespeople serving Cadillac customers. I don’t blame Cadillac for wanting to change that,” said the dealer, who didn’t want to be identified. “But for me it doesn’t matter, because I don’t need to sell one Cadillac to make a lot of money. I’m not sure what I’ll decide.”
Comments
The program is critical to Cadillac’s success going forward. It is one thing to make great products but in the luxury segment especially it to be backed up with a great service and dealer experience.
The dealers that do not want to comply, good riddance. For those that do comply and continue to be Cadillac dealers they will be rewarded with higher volumes and greater profits when the new models hit the market in a couple of years.
I disagree, modernizing the Cadillac retail experience to meet current and future consumer expectations is important, This particular program doesn’t do that, it is just a payment framework. So the dealers pay upfront for the possibility to get a payment back from Cadillac. The costs of this program are high and the payouts uncertain.
With over double the number of dealerships than BMW, Cadillac is way over saturated in most of it’s markets. This is the biggest problem, will be dealt with, and won’t be pretty.
Not sure what it is like in other markets, but in Toronto, when you go to BMW, AUDI or Mercedes you go to an architects dream in many cases. There you are met my a stylish person who brings you to the right person. They get you coffee etc, there is a super cool lounge and there are no VW golfs etc, Just luxury vehicles in a setting that screams “you have arrived!” everywhere.
If Cadillac dealers don’t want to do that, good luck… as that is what you are up against…
Too bad for the dealers. Most have never cared about the brand or the long-term. Some of the problems are related to this. They either need to match and exceed the competition, or go find another line of business to get into.
For the balking dealers (they haven’t even heard the plan!), this is GM’s way of pushing them out. Make them uncomfortable so they go ahead and cancel their contracts on their own. Good riddance.
Toronto, like many U.S. cities, had GM dealers way before the others came in. So they are stuck with legacy buildings and attitudes. It is easier for LExus or Audi to come in and establish something from a clean slate. Add in the fact that many GM dealers are sleaze and protected by arcane regional government imposed competition rules (i.e. big governments protecting their big obbyist and donors), and it is always an uphill battle. Hopefully this new strategy will disrupt and change this for Cadillac. They need it to go with the product and brand changes, or they will never sell a lot no matter how good their vehicles are (and they are good!).
Dealers need to step it up, but the cornerstone is GREAT product! Everything else is secondary.
“Maximum margins amount to 14 percent of the sticker price, vs. about 12.6 percent under the current system”?
Didn’t we just read that they wanted ten years to get the overall margins up to 11%?
And my Porsche and Audi dealers give me a free loaner. Unless I’m going to the airport – then they give me a drop-off and pickup service. But it’s a start – I wonder if Pinnacle is a legal way to thin out the dealership herd – sort of like what Johan had initially planned before some dealerships revolted?
Either way, he’s got the right idea. It’s not like they built the Cadillac And Chevy Spark House in Manhattan.
I like what he is doing with Cadillac. Cadillac needed a complete makeover, and after all of the growing pains I think Cadillac will be in a much better place 5 years from now.
I like what he’s doing too but they really need a new styling direction. Their concepts are pure Cadillac and just jaw dropping gorgeous. They really need to push that route with the next designs. What you see at the dealer to buy today just doesn’t have that ‘wow’ factor to me. It’s like the Camaro. I’m still hoping to see a Gen 2 inspired Camaro next gen which to me is much more what the Buick Avista concept invoked. As I posted yesterday, I’m loving the current Camaro now but for different reasons, not the ones I initially wanted. Cadillac, like Chevrolet needs to bring out new designs that just kill it right off the bat for the next round of vehicles. If they can pull that off, they’ll be in the perfect position to capitalize on it. Johan is laying the groundwork for that to happen.
What is Cadillac doing about the people who were stockholders prior to GM filing for Bankruptcy Protection, back in 2010? I still have the GM stock I bought long before this.
As any stockholder in any other business, it is worthless. This is the risk you take in being a stockholder in any company.
Just an FYI, I was also a stockholder when they went bankrupt–price of investing sometime/-no guarantees!
GM has too many Cadillac dealers, way too many. This plan is a way to get some of them to “quit” rather than having to buy them out. The big problem for those dealers that remain is………..after the XT5, their isn’t anything coming soon to justify the additional expense. Sure, a few CT6’s will make it across the curb, but it’s a low volume car. Additional CUV’s are years away.
Another big factor I would question if I were a Caddy dealer is the direction of the marketing? “Dare greatly” tied into high fashion in NYC???? Almost sounds like there are trying to sell expensive “writing instruments”? Funny how that is?
Really not sure how many will quit without a lawsuit first!
I am confused why you think other CUVs are years away? There is another one coming out in one year as a 2018 Year model.