Roughly 150 GM Dealers Will Dump Cadillac Brand In The U.S.
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General Motors is making big moves in the all-electric vehicle segment, announcing plans to introduce 30 new EV models globally by 2025, two-third of which will be sold in North America. Cadillac will be at the forefront of the EV deluge, with battery-driven luxury vehicles like the Cadillac Lyriq leading GM’s new EV charge. However, some GM dealers are reluctant to take the plunge, electing instead to dump the Cadillac brand over investing to accommodate the new EV models.
In a recent article, the Wall Street Journal reports that roughly 150 GM dealers will drop the Cadillac brand to avoid costly upgrades designed to support the sale of all-electric vehicles.
As GM Authority covered previously, the nearly 900 Cadillac dealers located in the U.S. were notified recently that a $200,000 investment was required to prep for the arrival of new EV products. The investment would be used for new tooling, employee training, and the installation of EV charging stations.
Alternatively, Cadillac dealers were offered a buyout ranging between $300,000 and over $1 million to exit the brand.
Now, citing “people familiar with the effort,” the Wall Street Journal reports that roughly 17 percent of the GM dealers agreed to the buyout that would end their franchise agreement with Cadillac. Some of the GM dealers were uncertain of the automaker’s turn towards all-electric vehicles, pointing to relatively low adoption rates among U.S. buyers.
“The future dealer requirements are a logical and necessary next step on our path towards electrification,” said Cadillac global brand chief Rory Harvey in an interview. Harvey added that those GM dealers reluctant to make the new investment would receive fair compensation.
General Motors has set aside $27 billion in investments for new all-electric vehicle technology and autonomous vehicle technology through 2025. The automaker plans to allocate more than half of its capital spending and product development team towards EV and AV programs.
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Good riddance. I’ve they can’t look to the future, they’d be holding up Cadillac. Time to move toward an exciting new future.
Now hopefully Cadillac will put forth some of the best product on the market and be a true leader.
Why GM is awarding this rats, they don’t want to sell Caddy so suit yourself i don’t have pay you extra to dump me, you didn’t pay a goodwill to sell Caddys in fist place ,did you? It ridiculous i don’t know any other company do this, and celebrate winding down! And It’s also bad optics, the customers will perceive this news as another failure, and nearing the bankruptcy for good. So they will not look to Caddy for their next purchase.
This decision by GM dealers to dump Cadillac borders on insanity especially when GM’s entire fleet is scheduled to be nearly all electric vehicles by 2035; this morons need to adopt the transition as a 5-10 year lead over foreign competitors who will not have an EV fleet until possibly 2035.
Stand alone Cadillac dealers might want to take the payout. The sales numbers for the brand have been steadily going down in North America over the last few decades. Ev turning the brand around is a pretty big gamble.
Hate to say it but i think the brand is going to die regardless of EV or not, take the money and run, or convert to a brand that isn’t dying.
The decline of the Internal Combustion Engine is upon us. European countries are implementing bans on Petrolium fueled new vehicles. Mary Barra sees a huge market being locked out if they don’t adapt.
EV’s are the future indeed, cadillac however is not.
Europe thinks of cadillac as being distasteful, and have much better luxury options available.
us sales decline wont stop with ev’s.
Only some sales in china will remain until gm cuts the cadillac brand.
I don’t like banning gas cars.
With the price of Zero Emissions gas coming way down I think that a better way to improve the environment would be to impose a carbon tax (on all carbon taken out of the ground) that slowly gets larger until it equals the cost of removing the carbon from the air. Then gas will cost more than it does now (because of how expensive carbon capture is) but it will let us decide whether to buy a gas car (and pay for more expensive gas) or buy an EV. In this plan you the consumer would decide what is best (most economical, most fun, ect.) car to buy for your self and not let the government control you as much. And it would save the environment because all the carbon will be removed from the air.
What will the truck lovers do when their engines say WRRR instead of FAROOM!
Europe is an entirely different market than the US.
I just turned 75, just took delivery of my C-8 Corvette,
and I’ll never own an electric vehicle. Just sayin’
Joe Russo,
You may be right, because based on statistics, you’ll be dead in the next 5 years. US male life expectancy is 76.61 and dropping quickly with Covid.
__https://www.worldometers.info/demographics/life-expectancy/
Yeah right Bert and you may be dead tomorrow.
I am curious how many of those dealers that are dropping Cadillac are of the combined dealership type. The ones that combine other GM brands with Cadillac. The way it is worded it appears to me that is the case. With that said I actually think that is a good thing for Cadillac. Cadillac should only have standalone dealerships.
I do not agree with how GM is managing this situation. They have did a terrible job with managing Cadillac with its ICE vehicles for a while now. Only recently they have tried to turn it around with fumbled plans. Like you I think that EVs are a big gamble to turn the brand around in North America. The brand needed a halo car a long time ago similar to what the V10 R8 did for Audi in the movie iRobot. That got people paying attention to Audi then they took off more. I do like Cadillac because of its heritage but GM really has mismanaged them. I hope they do not die as if they do the only American “luxury” left is Lincoln.
Personally I’m not a fan of these car companies forcing the dealers to spend a lot just to sell a model (Catera, Allante, etc). It just seems silly to me that Cadillac/GM would ask the dealers to pony up every time to just sell the product. But….this time is different to me.
Doesn’t matter if we/I like it or not, the direction of the automobile is electric or electrified in some way. At Volvo, they are telling us they will be all electric or electrified within the next few years. It’s not coming, it’s here already. So I find it sad that there are 150 dealers just willing to kick the can down the road. What will these same dealers do when the other brands they have also go electric? I remember back many years ago (can’t recall the years exactly) when I was selling at the Buick, Cadillac, GMC and Honda store. GM went through a purge then and cut the number of Cadillac dealers way down. The idea was that doing so would give the bigger/stronger Caddy dealers more sales and better profit. Not sure how that worked out, but losing another 21% of your current dealer network is a lot. Let’s hope this works.
I did the math a little bit ago counting the number of Cadillacs sold in the states last year vs the number of dealerships. If each Cadillac dealer sold the same number of cars it would come to just about 200 cars per dealership.
That is not many at all and you know dealerships on the coasts in the larger cities will be selling more.
There are tooooo many Cadillac dealerships for the amount of cars sold.
Those dealers won’t be able to sell gas powered lawn mowers much less cars. A very short sighted move on their part. Everybody is chasing Tesla.
they are not chasing tesla they are chasing people with money to buy stock that they need to finance the new models. profits keep the factories running but they need stockholders to finance the new models
You make it sound like GM is the only company forcing dealers to modernize and upgrade. If it wasn’t for some kind of franchise requirements there would still be dealers selling cars out of gas stations and blacksmith shops.
For those shared stores that are getting rid of the Cadillac brand, those stores more than likely will invest for the bread-n-butter brands easily due to more volume they can easily sell compared to luxury brands when that time comes. Also, the shared stores in the most remote or less populated part of the town are willing to take the buy out.
What I don’t get is why is this a Cadillac only deal ?
If the first GM EV we see in the USA is the hummer, why is this not a GMC thing ?
And if GM is moving to ALOT of EVs, again, WHY is this a Cadillac only thing ?
I really don’t think it is going to matter for Cadillac anyway.
It is my opinion that Cadillac will be a China vehicle and GM might import a few to the US as needed.
For me its a GM vehicle option deal.
I still feel GM is just too disconnect from the potential customer, or real customer for that matter.
GM is still spit balling vehicles off the wall and people buy most GM vehicles because they need a vehicle not because they want a CM vehicle .
This is a GMC thing. My GMC dealership investment for Hummer was $150K. The difference is, GMC dealers are profitable. Most standalone Cadillac dealers bleed money and the low maintenance cost of EV’s will make it even more difficult for standalone Cadillac dealers to make money.
Taking the buyout is a no brainer.
The first GM EV is the Chevy Bolt.
David Moody, I realize the Bolt is the first GM EV.
But that EXACT thing is what I mean by my comment on GM is just to disconnected from their customer or potential customer.
I can’t believe someone at GM thought ” we should make this Bolt as our first EV ”
So what do you get, a good vehicle nobody wants,
So now, how many years after Tesla did this, GM is copying Tesla, or trying.’
So now at GM ” we should try to produce the highest priced EV we can ” Hummer.
Sure again a good vehicle but nobody will be able to afford it.
Remember on this very site how much slack Elon/Tesla got when they were going to make a $35,000.00 EV profitable ?
This site and GM said they would go broke in months.
Well here we are GM !
Where the hell is your $35,000.00 EV that customers really want ?
Will you be able to make one ?
GM, still all talk and not a single EV that a customer asked for !
A good looking $40,000.00 to $60,000.00 EV, mid-sized, sedan – mid-sized SUV, with an interior worthy of 2021 and not some black ” plastic fantastic” cheap junk, and customers would be standing in line !
But not for the Bolt !
And NEVER for the Bolt looking EV !
And it does not and will not matter how GM refreshes it !
Its NOT an EV that ———— CUSTOMERS ———- WANT !!!!!!!!!!
I thought the Saturn EV1 was the first GM EV
It was never sold, only leased. And GM took them all back to shred them.
that’s a technicality, point being is consumers consumed the use of EV1’s. a lease is a form of purchase, its just for a portion of the vehicle. None of those high priced Cadillac EV’s will get purchased. Almost none. Those will all be leased.
Extremely limited in distribution. It was more of an experiment just like the Chrysler turbine car which was also leased and returned to Chryco to be destroyed.
I think it would be helpful to see a comparison of how many dealers companies like Mercedes, BMW, Audi, and Lexus have. Going from 900 dealers down to 750 seems like a big drop, but how many dealers do the competitors have?
About 250 a piece
@Chris and Gm213:
The way I see it is that the other brands (Lexus, MB, BMW, Audi) are mostly just stand alone stores with no other brands (new) sitting on the lot next to the product. However, Cadillac has a lot less stand alone stores (not sure how many??) and most every Cadillac dealer also has the Chevrolet or even Buick and/or GMC with them. This is how GM used to sell so many vehicles years ago, by having a GM brand store on nearly every corner in both large cities and small towns. So the real way to look at the 250 stores for the other brands vs how many stand alone Caddy stores are out there. Anyone know the answer to how many Cadillac only stores are in the US?
There’s 4 dealers in my area that’s only Cadillac, one its Cadillac/GMC, 2 are Cadillac Chevy. FWIW 2 Lincoln only dealers are here too.
Cadillac sold about 156k vehicles last year, that’s under 200 cars per dealership.
Cadillac has too many dealerships for the number of cars sold.
2019 numbers:
Mercedes: 383 Dealerships and sold 357,729 vehicles
BMW: 341 Dealerships and sold 165,549 vehicles
Audi: more than 300 dealerships and sold 224,111 vehicles
Lexus: over 200 dealerships and sold 80,975 vehicles
Based on having been a GM Dealer for 25 years No way in hell would I trust GM to elevate the brand in tune to what they are asking for an investment. They could care less about their Dealers. Solely focused on stock price as their product erodes. If it wasn’t for the Escalade caddy would have nothing.
Oh and GM has done so well with marketing electric cars they’ve had? Volt and Bolt did squat and the caddy sibling even less. GM has ducked at marketing their products. Right, another invest $200k is some goofy bs or take 300k to a Million and turn your store into a Mazda or Suburu or maybe the most profitable brand Land Rover jag. I’ll take the cash thank you!
Anthony, I understand what you are saying. But it seems as if you are saying GM should not be concerned about profitability and yet the dealers are really all about profits. I know, I’ve been working at them for nearly 19 years now. Most dealers I know would step on their mother’s back to get to a buck. And, if you think this is specific to GM, you are wrong. I’ve been at a Mazda and Volvo store for 6 years now and they are every bit as bad if not worse.
LR/Jag is so profitable because of all the repair work.
GM should float the expense of the conversion with a delayed investment and payback from the dealers. If the market is receptive to Cadillac’s EV offerings, then the dealers can reimburse GM. There’s been way too much mishandling of the Cadillac brand that asking for another investment after a string of flops is a bit much.
In the grand scheme of things, 200K isn’t a huge investment but in the bigger picture with Cadillac, I wouldn’t be willing to come up off the money – zero faith in how they execute operations.
A brand already struggling for sales is losing nearly 1 in 5 dealerships. That’s a pretty big deal. GM should have provided the $200k investment cost for the dealers if they’re so confident their direction for Cadillac will be a fruitful one. The buyouts say to me they aren’t confident at all. Kind of like when a company offers people money to quit their jobs. A company doesn’t do that when business is booming and the future looks bright.
GM has 900 Cadillac dealerships that is way way way to many for the number of cars they sell, all the other competitors have between 200 and 400 max.
I just love the way all of you are all about eliminating jobs…If each dealer has about 200 employees, do the math…more people in the unemployment lined, and less earning a paycheck. I had an MB, and you waited forever for a service appt. ,and they treated you like you didn’t count because they had sooooo many customers. You waited forever for a part, and the bill……$1900.00 for a 15,000 mile checkup. Many of these dealerships, including Cadillac, no longer have loaner vehicles available when you bring your can in for service because they simply have too many customers………
Another angle to look at is its still GM, you can still get your Cadillac serviced at thousands of GM dealers.
Each dealer does not have remotely close to 200 employees. They’re talking about how average dealer only sells about 200 Cadillac per year. Cadillac just simply has to much dealers which is hurting the other dealers. I’m on a Cadillac dealers website right now and the majority of them are loaners. They even have inventory from 19’. They’re just giving people to much options for dealers which isn’t a bad thing for the customer, but it is for the dealer. They should get rid of all those big dealers like Morries and just stick with their own or family owned.
Cadillac has way to many dealers and they know it. M/B and BMW both outsell Cadillac , with about 25% the dealer body. Cadillac has about 900 dealers, while the 2 Germans have about 250 each. The same could be said for Chevrolet, Toyota and Chevy sell pretty much neck and neck, but Toyota does it with about 1200 dealerships while Chevy does it with 3000.
GM would probably happily just forgo dealers and sell directly to the consumer if they could. Way more profitable. Losing the short sighted ones who cannot see that electric is the future is a start.
This could very well be the future.
Problem is that GM don´t have real product line but only ugly concept with stupid name. Mary just talking about future EV product line and GM prosperity but we can see only 2 expensive concepts (GMC Hummer a Lyriq). Tesla even Ford have real product and another carmakers (Hyundai/Kia/Genesis, MB, BMW, Volvo, Jaguar) are ready to deal with a lot of interesting models in near future. So why you should wait for Mary´s promise.
Hopefully, my local dealer has chosen to take the buyout. Their service and sales departments are dinosaurian. With any luck a forward thinking customer service oriented franchisee will pick up the local Cadillac brand.
Why are the future electric models from other brands real and the ones from GM fake? Why don’t you believe in whatever Mary Barra says? Finally, Are you familiar with the term “confirmation bias”? I feel like it applies to you directly.
Andy,
I will give my 2 cents worth an your question, Why don’t I believe Marry Barras promises.
Because the last 20 years or MORE, GM/Marry has been promising a ” New Onslaught ” of GREAT Cadillacs !
WHERE ARE THEY ?
Even just the last 4, XT4-XT6-CT4-CT5 !
What are these vehicles ?
Cheap GM ” Good Enough ” Chevrolets
NOT Cadillacs !
Now the Escala was a nice concept !
And the Escalade is a great Cadillac built on a great GM platform !
However AGAIN the rest of the Cadillac line is just cheap Chevrolets !
Even the new Lyriq, in the US it went over like a lead balloon.
Why do you think it will be released in China first !
Now the Hummer went over great in the US, so did the Escala, yet in the Cadillac line we get a China Lyriq.
Put the Escala front on the Lyriq, now we are talking !
Put the ( what we were showed ) Lyriq interior in the CT4 – CT5, again we are talking !
Put the CT6 platform under the XT4 XT5-XT6 we are talking !
But again, GM has showed the Cadillac customer so many great products and released so many POS vehicles, its like the boy who called wolf ! Do you know that story ?
As long as I can buy the CT5-V Blackwing in a few years I will be good. It is the only interesting Cadillac with a soul coming out to me. If I had a family the Escalade would be perfect. The Blackwings will likely be the last of their kind from Cadillac.
The market will ultimately decide. Those dealership owners have made their choices for their own business. Likely what is best for them. It is not the end just yet. If the demand for EVs and in particular Cadillac ones is high then these dealers can buy and pickup Cadillac again in the future. The consumers will decide.
In the meantime they should not be forgetting about the current slate of ICE vehicles. I reckon the future in a decade or so won’t be what people are mandating it shall be. ICE still prints the money at Cadillac. So continue to market these types of vehicles on their current slate. I don’t see any CT4 or CT5 adverts. They are great cars and it is sad because outside of this site and other car sites people do not know of these vehicles.
@dblezy:
I saw 2 ads for CT4 and CT5 just yesterday.
If demand will be high for future Cadillacs, what if GM don’t want those dealers to own the Cadillac brand again? Those stores should had not cancelled the Cadillac brand in the first place. For a luxury brand, 750 in the future is still way too many stores compared to the brand’s ratio of sales versus the more established competition with less stores.
it will be interesting to see how much cleaner the world’s atmosphere will be in 10 years after spending all this money on EVs.
You’ve got to get people to adopt the idea first. Making fewer dealers especially in rural areas where you already have to drive 30 miles or more to get to a dealer is not a great idea to push the switch.
If GM expects it’s dealers to come aboard the EV ‘revolution’—which IMO is a LONG way from being universally-accepted by the American motoring public—it’s the parent company that should bear the cost. Is Cadillac possibly on a path to follow Olds and Pontiac down the tubes?
GM just has too much brands. The more you look you can see how similar they are. Just the other day I was driving on the highway when I thought it was just another Chevrolet Equinox but it was actually a Cadillac XT5. They also really need to stop with that alphabet soup stuff. They really just need to get rid of Buick and focus on their main profitable brands such as Ford did with Mercury. Let’s face it. Buick’s were legendary, but now all they are is just Chevrolets with a bit softer leather and a Buick badge. And they make a big deal about things that have been out on Fords since 2015. The more time GM has to focus on the other brands, the better the car is going to be.
GM only have four brands here in the states. Buick is a FWD CUV lineup now and more models will be added. As long they are popular by the general public, there is no reason for them to get cancelled. Unlike Mercury, Ford cancelled them because they were the exact copies of Ford models that were not popular while Buick are not exact copies of Chevys with nicer leather as you put it. And if you can’t tell the difference between the Equinox and XT5 from within a driving distance, you need a better pair of glasses or contact lenses.
I only thought it was just a average Chevrolet for a few seconds until I saw the badge. Ford and Lincoln has changed their brands and quality of their vehicles drastically in the past few years and it’s time for GM to do the same. And Buick’s main customer age is definitely on the older side. Buick also needs to appeal to younger buyers if they want to survive. I mean when was the last time you saw someone younger than 50 driving a new Buick?
JOHN,
Like so many people here, you don’t know what you’re talking about. All the new SUVs from Ford and Lincoln have horrible reliability and are killing Ford.
Another poor idea. They don’t need to make it less convenient for customers to reach a dealer. The company should pay at least fifty percent of the cost to provide good customer service.
Trust me. The costumer doesn’t have a problem finding a dealer. Where I live they have one GMC/Buick dealer, another GMC/ Chevrolet dealer, and a Cadillac dealer, and in addition to that they have a Chevrolet dealer/used car. And that’s just within 15 miles of each other. Trust me. People don’t have a issue. And I live in a place with a population of 15,000 people and it’s barely in the metro area
If electrics are going to take over, then the death of the RV market is not far behind. It’s pretty hard to tow a trailer with an electric vehicle. The travel trailer / RV is going to be a fond memory like in the movie The Long, Long Trailer, Desi Arnaz and Lucille Ball made in the 50’s.
No it is not . They will have electric trucks that can tow. Ford 150 electric truck . Hummer ev.
Tesla cyber truck as of now
How can I travel 400 or 500 miles a day while towing with an EV? And not everyone wants a GD pickup truck.
Face it Cadillac is dead, very boring trim levels and the prices are out of sight !! I hope Everett Chevrolet/ Buick/GMC/Cadillac in Hickory, NC drops the line ,a dealer who puts numbers before customer service !!
How do the states like CA, MA, and others replace the gas tax revenue on EV’s?
Wait for it………. from EV’s “road tax”, “battery disposal tax” and other taxes/charges
yet to be dreamed up.
Don’t think EV’s will be any cheaper to drive than ICE vehicles after the Government
gets through with them.
(And don’t forget the Electric Companies when they increase residential rates.)
It costs $30 to get Tags where I live but I get charged $225 for my EV Tags.
That is one way. And I have no problem with that at all. I think that is pretty reasonable.
I can’t believe the negativity that is coming through this venue. Can’t anyone say something positive?
Joe,
Something positive !!!!
There I said it for you !
Speaking only for myself, I simply call ’em as I see ’em. Auto manufacturers have traditionally soaked their dealers for costs of upgrades, whether those upgrades are for facilities, service equipment or technical training. IMO, we’re going to be seeing backlash from more and more dealers as the parent corporations attempt to extort them for the cost of changeover to EVs.
Times—and technology—are changing, and not all the changes will be good for the motoring public. How all this plays out over time, we’ll just have to wait and see.
Or do like Tesla and remove dealers entirely and keep the money for the corporation. Tesla sells, maintains, sells you the fuel and insurance and will take your trade-in when you’re done. Making all the money for itself. That’s why they are the most valuable auto company on earth.
How can you defend dealers who try to screw you at every opportunity?
I suppose Cadillac gets beaten up because it claims to be a luxury brand but GM continues to manage the brand as something other than. So it has a big target on its figurative back that is hard to miss.
Lets go back to 2018/2019 when we were told about the new product onslaught from Cadillac that would bring a new model to market every 6 months. We are on the other side of that plan and not one product – save for the Escalade – introduced has moved the figurative needle forward. The competitive CT6 is gone and CT5/CT4 are re-skinned models moved downmarket. What supposed luxury marque does these things???!!!
Sooo, with disappointment after disappointment, it’s difficult to garner enthusiasm or excitement about Cadillac or any of its reinvention announcements and plans. Been there done that too many times already.
Thing is, I’d say many of us would hope that someone at GM reads these forums and gains insight into how the brand is perceived and then goes back to headquarter and pulls some strings to make real change take effect.
“Thing is, I’d say many of us would hope that someone at GM reads these forums and gains insight into how the brand is perceived and then goes back to headquarter and pulls some strings to make real change take effect.”
We could only hope.
However, I don’t think GM cares all that much about what any of us—the motoring public in general, as well as posters on this site, in particular—has to say about ANYTHING. If they did, there wouldn’t be so many class-action lawsuits (transmissions, engines, ignition switches, etc) against GM currently pending.