The Cadillac U.S. dealership network will consist of around 560 individual storefronts by the end of 2021 as the automaker’s North American retail footprint continues to shrink.
According to Reuters, Cadillac has mostly completed its dealership restructuring and is on-pace to have around 560 active dealers in the U.S. before the New Year. Rory Harvey, head of global Cadillac, told the publication the brand had around 920 active U.S. storefronts as recently as three years ago. The automaker began reducing the number of active U.S. dealerships it had late in late 2020 as it prepared to launch new battery-electric models like the Cadillac Lyriq, which will enter production early next year.
Under its restructuring efforts, Cadillac required all active dealers to make a sizable investment to prep for the arrival of the new EV products, which would go toward electric vehicle chargers, renovated service bays and more. Dealers who did not want to make these investments, which often surpassed $200,000, were offered buyouts ranging from around $300,000 to over $1 million to close their Cadillac storefront.
As of last December, about 150 dealers elected to take the buyout, which would have dropped the number of U.S. dealers under its umbrella to around 770 storefronts. More dealers have since accepted the buyout offers, bringing the number of U.S. Cadillac dealers to just under 600. According to Reuters, Cadillac has spent $274 million on these buyout offers throughout 2020 and 2021.
Some automotive retailers are cutting back on Cadillac storefronts, but others are expanding. Certain dealers have entered new, luxury-focused markets as the automaker prepares to roll out its new line of battery-electric vehicles, including Beverly Hills and San Francisco. Wealthy, metropolitan markets like this may be more receptive to new battery-electric Cadillac vehicles than rural markets and may be willing to shell out more money for such products as well.
While Cadillac’s physical dealership network is shrinking slightly, the automaker has also moved some of its sales practices online to help drive results. The Cadillac Live service launched in the U.S. in late 2019 and proved hugely important when the pandemic closed showrooms nationwide in 2020, allowing customers to interact with a Cadillac representative and learn more about its latest products. Tech-savvy EV shoppers may be particularly drawn to this service, as it allows them to shop for a vehicle from their home or while on the go using a computer, smartphone or tablet.
The 2023 Cadillac Lyriq will begin arriving at U.S. Cadillac dealers early next year.