Cadillac President Johan de Nysschen discusses Cadillac's strategy to upgrade its U.S. dealer network.
New Cadillac President Johan de Nysschen continues to implement plans to remake the luxury brand’s image as he wants better compete with BMW, Mercedes-Benz and others by creating “boutique” stores focused solely on Cadillac.
As dealers begin to get visions of previous remodeling mandates rolling through their heads – and the accompanying migraine headache – the “boutique” concept isn’t a brand-wide makeover. The new plan comes on the heels of his announcement that Cadillac headquarters would be moving from Detroit to Manhattan to affect a change in the perception of the brand: both internally and externally.
“A strong, financially healthy dealer organization is an essential element of Cadillac’s expansion plans,” de Nysschen said. “The stronger our dealers are, the better our service quality will be. Cadillac is on a journey back to the pinnacle of premium brands, and dealers will contribute every step of the way.”
Currently, Cadillac has 929 dealerships nationwide, but only about 200 are exclusively Cadillac dealers.
The remainder sell other GM products. It’s those dealers that d Nysschen would like to create boutique locations with specially trained salespeople and service and luxury features within their multi-point locations. No dealerships would be closed as part of the plans and there may be financial incentives for the program.
Cadillac’s dealer network is far larger than those of competing brands, serving more small markets than other car companies, which is an advantage, he noted, but there are also some downsides namely the fact that some dealerships sell Cadillacs “out the back door” of Chevrolet stores, according to Associated Press.
(Cadillac taking on market leader with aggressive product plans. For more, Click Here.)
“We both know that this is not the right thing for Cadillac,” he said. “But I also do not want to force upon you to build a large Taj Mahal mausoleum for the brand because it is not an investment that’s appropriate to the market size that you’re in.”
Instead, de Nysschen said he wants to work with dealers to set aside space for Cadillac with boutique showrooms that might hold only two cars. He outlined a plan to bring emerging technology to the showroom experience.
(Click Here for details about GM’s expected improved profitability in 2015.)
“Virtual Showroom” systems could enable shoppers to quickly configure and envision multiple models, color and interior choices using interactive digital displays, or potentially even holograms.
This new model could also include increased compensation for dealers that could be tied to local sales and market potential, he added. Growth in dealer profitability will be supported by financial incentives to reward dealer investments into facilities and high achievement in customer satisfaction.
(To see the latest green vehicle award winners, Click Here.)
The program is part of a larger program to bolster Cadillac sales, which were about 170,000 units in 2014, which was down 6.5%. BMW and Mercedes were double that amount and Lexus was over 300,000 units. In short, the competition is heating up, not cooling down.
I expect it might be tough finding a skilled sales staff willing to sell only Cadillac. Those on commission may consider that a lot of eggs for one basket in a cyclical business. Some corporate aversion to combining, say, Cadillac with a GMC franchise?
Before reaching the end of the article I thought the same, the pairing only works with another premium brand, which GMC is supposed to be. This “boutique” approach doesn’t work if a customer sees a Chevrolet Sonic being prepped along-side their CTS / ATS / XYZ…
We saw how (un) successful VW U.S.’s move from Detroit to outside DC proved to be for their brand so I’m not convinced Cadillac will do better with their flight. The boutique appeal is nice and all but you have to deliver the product and customer service now days if you want to make the sale and keep the customer.
VW U.S. is a perfect example of what lowering prices and investing in production facilities in the U.S. can do for image and sales. Their sales grew nicely for a couple years and then started to fall off even with new product. Why? Because the VW ownership experience in the U.S. is not satisfactory compared to other brands. VW’s parts and service is considered by many as pure extortion and incompetence. VW’s new car QC needs to be improved. Owning a VW (or Caddy) needs to be a pleasant experience where you feel like a valued customer and not an experience where you feel exploited.