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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.
 

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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... :bonkers:
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??
 

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Although..... If they had only a few really good, and big dealerships, it could make up for it.......
 

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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.
 

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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.
 

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Hey Katshot, is that the dealer in Trenton? Heard about it on the news.

Nice town, Newtown, Pa. I bought my Allante at the Chevy dealer there.
 

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Fewer dealerships!!! That is ridiculous. Unless the goal is to reduce the dealerships by about 2010, it is a bad move on Cadillac's part because there are still millions of 'mass-market' Caddies rolling around town including the popularly received CTS which means more service and repairs. Most owners trust their dealer's 'certified' service centers to handle their car's service and repairs. Eliminate 75 dealerships in the country and that's probably another 50 miles that John Q. Caddy owner has to travel to get his 1999 STS repaired. I know it is already tough having to drive 45 minutes to a qualified shop (which also happens to be a Cadillac dealer) to get my Eldo fixed while I'm down here in college.

However, I like Bob Lutz's plan to make Cadillacs more exclusive; now is the time to make the buyer feel special. I say let dealership buyouts naturally progress. Take the money to produce a $100k Cadillac supercar and invest in extensive training for the Cadillac sales force instead. The CTS has proved to be a huge success for GM, but the next-gen STS is the true test. If the STS and perhaps a CTS coupe with 3 engine/3 transmission choices (exclusive of the V-series) produces a nice ROI, then Cadillac can build the Sixteen, XV12, and have 7 dealers.
 

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Cadillac wants fewer,stronger dealerships

If you take a look around, you do not see many exclusive Cadillac dealers selling just Cadillacs in the showrooms across America.They are in the mix with other G M products on display.Yes, there are a few Cadillac only dealers and i think G M wants to see more dedication that only handles one line such as Cadillac.Lexus is not in with Toyota. Infinity with Nissian and so on. What could possibly happen to a dealer carring Cadillac with Mulitple lines? It will be forced to build its own showroom or seprate building on their property just exclusively for Cadillac to keep the franchise. I see that coming.It would be demonstrating strict dedication to the product.There are some sucessfull Caddy only stores and I think their looking for Comitments and loyalty with the future changes it costing and retooling the new product models.
 

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Re: Cadillac wants fewer,stronger dealerships

What really bugs me about the caddy dealer in my town is that they are paired with pontiac (no big deal) and the worst one of all HONDA. What are they thinking when you put a cadillac and a honda dealership together. It really bothers me b/c i see all the little punks in my town (who are the same age as me) come pulling up to the dealership in there bat mobiles that sound like sowing machines on steriods or an angry lawn mower. I am there still in my work clothes in my caddy trying to get info and parts. Now there is more honda stuff than caddy. I hope they get rid of this dealership. They don't give respect to you unless you are above 40 and are buying a new car.
 

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El Dobro said:
Hey Katshot, is that the dealer in Trenton? Heard about it on the news.

Nice town, Newtown, Pa. I bought my Allante at the Chevy dealer there.
Yep, that's the one. Colonial Cadillac on Olden Ave. They REALLY got hit hard. Our factory is only a few blocks away and it just missed us. That was a wild day.
 

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Here in town we have a cadillac and toyota dealership..... :shocked2:
 
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Actually, this makes perfect sense for Cadillac. They are going upscale and it doesn't make sense to have Caddies being sold right next to Cavaliers. Those days at GM are over. There aren't Lexus/MB/Infiniti/Audi/Saab/Range Rover?etc..... dealers on every corner either. It seems like Caddy wants to consolidate and then determine the best markets to branch out in. It really seems like Lutz is actually going to change Caddy rather than just talk bullshit about it.
 

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Just a note, I was reading through a 1976 Time Magazine and there was an ad for a Seville that said there were 800 dealer service shops I think. 800 something, it's been a couple days since I saw it.
 

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scourge said:
Actually, this makes perfect sense for Cadillac. They are going upscale and it doesn't make sense to have Caddies being sold right next to Cavaliers. Those days at GM are over. There aren't Lexus/MB/Infiniti/Audi/Saab/Range Rover?etc..... dealers on every corner either. It seems like Caddy wants to consolidate and then determine the best markets to branch out in. It really seems like Lutz is actually going to change Caddy rather than just talk bullshit about it.
The problem is...if someone's local dealership is removed. What happens if the car won't start or it is not healthy to drive the car? Then you just have to transport the car farther to get it fixed. Maybe a 15 minute drive to dealership becomes an hour.

Did anyone else notice that Hummers are being sold on Caddy lots a lot these days? Annoying: they take up too much space in the bays, need extra strong lifts, and are always breaking...:rolleyes:
 
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