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Cadillac wants fewer, stronger dealerships
LaNeve intends to lower U.S. store count to 425
By Charles Child Automotive News / August 25, 2003 DETROIT - Mark LaNeve, marketing general manager of Cadillac, wants 75 fewer Cadillac dealerships in the top 50 U.S. markets.
The brand has about 500 stores in the top 50 markets, he said.
By slimming that total to 425, the remaining dealerships will be stronger financially and better able to deliver high-quality service to customers.
Having fewer but stronger dealerships is one part of LaNeve's long-term plan to compete with the top global luxury brands, BMW, Lexus and Mercedes.
"Is Cadillac back?" LaNeve said. "No, not yet. But we have turned the corner."
Needed: CTS variations
Speaking to the Automotive News staff here on Monday, Aug 18, LaNeve also said:
Cadillac's most pressing product need is more CTS variations. "We need coupes, convertibles, crossovers. Now we have the sedan and one powertrain." In contrast, BMW substantially boosts 3-series sales by offering a convertible, coupe and various engines, he said.
General Motors' top officers, including Robert Lutz, vice chairman for product development, and Gary Cowger, president of GM North America, want to create an "ultraluxury car" for Cadillac with a sticker above $100,000. But no program has been approved.
Cadillac will never be No. 1 again in luxury brand sales because it won't offer cars smaller than the CTS to compete with cars such as the 3 series, he said.
Cadillac's mission is to go further upscale with cars such as the XLR roadster. Its base sticker is $76,200.
As the brand moves up, Cadillac probably will not sell 300,000 vehicles per year again, LaNeve said. Sales in 2002 were 199,748. Its last year above 300,000 was 1986, when it sold 304,057 cars.
Cadillac's TV campaign, featuring the tagline "Breakthrough" and the music of rock group Led Zeppelin, will be phased out eventually. It sends the message that Cadillac is changing, he said, but advertising needs to communicate product features and the brand's exclusive image.
Spending on TV advertising will continue to decline as Cadillac shifts money to magazines and direct mail. "I'm not convinced premium brands need a lot of TV," he said. "Our customers are not watching a lot of TV."
Buyouts are tougher
LaNeve gave no timetable for when the number of Cadillac stores in major metro markets will fall to his goal of 425.
Cadillac is not purchasing and retiring stores; nearly all reductions come when one Cadillac dealer buys out another.
The brand has about 1,400 dealerships nationwide, many in small stores with small volumes.
Cadillac's recent success has caused dealership values to rise and has slowed buyouts, he said.
The angular styling on the CTS has been well received. Well-known athletes and rap musicians have embraced the Escalade, lending cachet to Cadillac.
Last week, GM plants were preparing to ship to dealerships two new nameplates with angular styling, the XLR and SRX sport wagon.
Through seven months of this year, Cadillac sales rose 5.8 percent over the year-ago period, compared with a 3.5 percent rise for Lexus and BMW and a 5.7 percent gain for Mercedes.
hmmmm...phasing out dealerships. Now some people will have to drive farther to buy their cars and get their cars serviced. This will be much less convenient for them. Plus this will reduce the amount of competition current dealers face which will be bad for consumers...
Right now a lot of caddy dealers can't meet service demand. You have to wait 20 plus days to get an appointment. This could possibly make the waits longer.
What are the pluses for the consumer again for this strategy??
The last time Cadillac went from 500 to 425, it started a long decline. I'm not sure if this is a bad decision or not. Hey it's not going to affect me anyway with my '78.
That is Leland. You can read about him in Cadillac:The Complete History by Maurice D. Hendry. I picked up a copy on eBay. A must have book for Cadillac fans.
