Cadillac Wants To Axe 400 U.S. Dealers - Offers Buyouts

[Gorehamj]

John Goreham
Contributing Writer, GM-Trucks.com
9-27-2016

Be prepared to drive a little further to have your SRX serviced if GM's Cadillac has its way. The brand hopes to reduce the number of its dealerships significantly. This is a new endeavor by Cadillac called Project Pinnacle. Be prepared to be completely shocked by the following facts:

- Cadillac had 400 dealers last year that sold less than 50 Cadillacs. Less than one vehicle per week. Lexus Dealers average 30 vehicles sold per week.

- Those extremely low volume dealers make up fully 43% of Cadillac's dealerships, but only sold 9% of its vehicles in 2015.

 

This shocking revelation shows just how far Cadillac's sales have fallen. Through August of this year Cadillac had sold just 103,918 vehicles. That is less than half of what Lexus sells. Look deeper and one sees that the Cadillac SRX accounted for about one-third of all Cadillac sales. Year to date, sales of the SRX and its replacement, the XT5, are down dramatically (about 32%). With Cadillac's top-seller in steep decline, and no replacement for those lost vehicles coming any time soon, Cadillac needs to downsize.

The new plan that Cadillac's President, Johan de Nysschen has in mind will reward high-volume dealers with incentives. The more vehicles sold, the better the dealer's profits should be. This "survival of the fittest" dealer approach was not welcome by smaller dealers, hence Cadillac's offer to buy them out.

 

“This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted,” said de Nysschen, whom GM hired to revitalize Cadillac in 2014. “Some people may choose to make life a little easier than what lies ahead.” Mr. de Nysschen went on to say about his new plan, “Every single Cadillac dealer will have the potential to earn significantly higher profits than they do today." So heads-up Cadillac shoppers. Your local dealer's profits are going up, or they are going away.

 

For more details on Project Pinacle, please see the Automotive News story from which GM-Trucks.com pulled quotes and facts.

Hat-tip to BestRide, where we saw this news first.

 

Image Note: The image of the Cadillac dealership shown was part of Cadillac's 2012 press release related to "The Cadillac Luxury Buying Experience."

[Colossus]

If Caddi doesn't improve things reliability wise, there are not going to be any dealers period. That or we'll see them sink into the very far levels of darkness that Lincoln is presently in and has been for many years now.

[last truck]

I worked as a mechanic, ya we were called mechanics back then at a Caddy dealership in the 70's I remember when a Caddy was not a rebadged Chevy and had their own engines and bodies, Caddy is done in todays market.

[MS3DALE]

That's real smart, lose even more customers to Lincoln (and other luxury brands) just like they did in '09 when they axed a bunch of Caddy dealers/franchises during the bankrupcy, we were one of them, and they wonder why people are not buying, people don't want to drive farther away to buy and have their vehicle serviced.

We had one customer who was a loyal Cadillac customer for over 40 years, he bought a new Caddy every 3 years (along with a new GMC truck every 3 years as well) well when we lost the Cadillac franchise in '09 he knew he would have to travel almost 20 miles to the next Caddy dealer (we were just 4 miles from him) he said he wasn't driving that far and felt abandoned by GM/Cadillac, so with the nearest Lincoln dealer being just 5 miles away from him guess what he bought when it was time to buy?!? he liked the Lincoln so well that when it was time to buy a new truck he bought a Lincoln Mark LT pickup, so GM not only lost him as a car customer but as a truck customer too, he has bought 3 more Lincolns since that time 7 years ago!

Its their own fault for sales falling for not having the dealerships to sell/service the vehicles in the first place.

[Nargg]

I worked as a mechanic, ya we were called mechanics back then at a Caddy dealership in the 70's I remember when a Caddy was not a rebadged Chevy and had their own engines and bodies, Caddy is done in todays market.

 

I updated my wife from a Chevy to a Cadillac this year. It's different in places where it matters most. Including enough changes in the drivetrain to make it worth the extra effort.

[unit731]

I sat in every Cadillac in the showroom at the dealership.

Not one was comfortable. Hard small seats with h u g e center consoles.

 

A luxury brand should have comfortable seats.

 

Sat in the $60,00+ Cadillac Escalade (ya it's a Chevy truck). Small hard seats with huge console. For a luxury truck SUV I expected comfortable seats.

 

Growing up in what some would call a rich area I used to see the older people with the big Lincolns and big Cadillacs. These (next generation) are now driving Lexus, BMW, etc. SUV's. Don't see any Cadillacs anymore.

[last truck]

 

I updated my wife from a Chevy to a Cadillac this year. It's different in places where it matters most. Including enough changes in the drivetrain to make it worth the extra effort.

 

last time I was shopping the SRX was a dolled up Equinox right down to the engine and transmission and the Escalade was a dolled up Tahoe, granted it had the 6.2 but that was a deal killer for us given the premium fuel requirements, been there done that with the High Country and tired of that combo after 2 years of driving it. We didn't look at cars as we have enough of those right now. If Caddy would have had a Enclave size SUV we would be driving it.

[Colossus]

For awhile back around 2003-2014 ish, Caddi was doing pretty good with their vehicles.. And then they took a nose dive.

[Nargg]

 

last time I was shopping the SRX was a dolled up Equinox right down to the engine and transmission and the Escalade was a dolled up Tahoe, granted it had the 6.2 but that was a deal killer for us given the premium fuel requirements, been there done that with the High Country and tired of that combo after 2 years of driving it. We didn't look at cars as we have enough of those right now. If Caddy would have had a Enclave size SUV we would be driving it.

 

I agree, Caddy could use a mid-level SUV. And, you should double check that gas thing. I believe the 6.2 is "suggested" for premium. It runs just fine on mid-grade and will even run perfectly on regular grade. Just slightly less horsepower. Google that idea and you'll find that any car, even the most power sports cars will run just fine on regular grade. An engine can be made to run best on premium no doubt, but it's by no means a requirement to make it go.

[last truck]

my manual states

 

don't worry about it the truck is gone, lol.

[Jsdirt]

People haven't forgotten the Northstar oil-burners ... and the $1,200 starter replacements. They did this to themselves.

 

I know first hand that dealership locations (and hours) matter. I'm driving a '07 Silverado now only because the Ford dealer was closed on Sunday then! I wanted an F-250 ... but knowing now what they cost at the time, I probably would've left there with a F-150.

 

The Ford dealer is 6 miles from my house ... and the GM dealer was 14 or so. That dealership was closed back in '09 or '10 - whenever they were closing all the non-productive dealerships. Good thing too - that place SUCKED. But I digress ...

 

For me, it doesn't matter how far a dealer is away, because I repair all my own vehicles. Also because of that, I'll never buy new again, so ...

[SnakeEyeSS]

Someone dg up the thread were a bunch of us were predicting doom for caddy when GM hired their President.

[Daryl LBZ]

How about improving the product so people actually buy it instead of adding further pressure onto the dealerships. It's already painful enough going to a dealership to even look without being pushed around.

[kstruckcountry]

Yeah, this new president is a complete idiot. My grandma drove a Cadillac for years, when she updated she went to an Infiniti. The seats in the Caddy weren't good for her and the ground clearance in the front was too low.

 

Sent from my SM-G920V using Tapatalk

[GH1618]

Yeah, this new president is a complete idiot.

Do you mean Mary Barra? She's been in charge only a little less than three years. She took over a company in trouble, which might have disappeared altogether, and has been fixing the corporate culture. GM is profitable again and is paying off its government loans. They are also making some of the best cars and trucks they have in a very long time. We have two recent Chevrolets and we like them both.

 

Maybe fixing Cadillac isn't one of Barra's top priorities.