Brave Move or the Next Pontiac? Dealers not sold on GM's all-electric vision for Cadillac can sell out

[ChasingCoral]

https://www.greencarreports.com/new...all-electric-vision-for-cadillac-can-sell-out

Report: Dealers not sold on GM's all-electric vision for Cadillac can sell out

STEPHEN EDELSTEIN NOVEMBER 24, 2020

Dealerships not sold on General Motors' plan to make Cadillac all-electric can sell out, according to an Automotive News report.
The automaker is offering dealers unsure about the plan up to $500,000 to drop their Cadillac franchises, the industry trade journal reported.

Cadillac has been declared the standard-bearer of GM's electrification efforts, which include an investment of $27 billion to launch 30 new models across multiple brands by 2025, with Cadillac selling mostly electric vehicles by 2030.


Cadillac dealership

As part of that vision, Cadillac dealerships are being required to install charging stations and other equipment needed to service EVs, as well as provide accompanying employee training. A previous Automotive News report pegged the cost of these upgrades at $200,000 per dealership.
The required investment is one of the reasons GM made sure its dealers were in the loop on its electric-vehicle plans through the decade—and part of a preview held earlier this year.

In the past, dealerships have opted out of selling electric cars if they felt the return on investment would not be sufficient. But this is the first time an established brand with a full lineup of internal-combustion models has attempted a transition to all-electric. Smart previously went all-electric North America, but it was already selling a battery-powered version of its Fortwo alongside gasoline models. Consequently, Cadillac could provide the template (or a cautionary tale) for other established brands should they decide to shift to electric cars.


Cadillac Lyriq concept

Cadillac's electric transformation will start with the Lyriq 300-mile crossover, which will be built at the Spring Hill, Tennessee, factory that once served as the launch point for Saturn. Just this week, GM confirmed that the Lyriq launch will be pulled forward to early 2022.

As electric cars segue in, they may also introduce a distinct design language. In an interview earlier this year, Cadillac design director Brian Smith said the automaker is "making a bit of a departure" with its EV styling.

 

[JellyBelly]

The problem is that Cadillac is a high end brand as far as pricing goes - they can go all electric and sales will be limited unless the pricing is similar to current ICE vehicles and range/charge times are convincing. Otherwise dealers are likely to see substantial reduction in sales. For Cadillac to be all electric and sustain similar revenues, the vehicles need to be really compelling - only the future will tell

 

[bruceski88]

The problem is that Cadillac is a high end brand as far as pricing goes - they can go all electric and sales will be limited unless the pricing is similar to current ICE vehicles and range/charge times are convincing. Otherwise dealers are likely to see substantial reduction in sales. For Cadillac to be all electric and sustain similar revenues, the vehicles need to be really compelling - only the future will tell

Here In Silicon Valley there is no Cadillac dealership anymore, Lexus, BMW, and Mercedes sales have been decimated by Tesla. Onbe could say they might be too late.

 

[JellyBelly]

Here In Silicon Valley there is no Cadillac dealership anymore, Lexus, BMW, and Mercedes sales have been decimated by Tesla. Onbe could say they might be too late.

Very understandable - thats why we see Teslas all over CA.

 

[ChasingCoral]

Agreed. It’s just a question of how quickly they’ll accept that.

 

[dbsb3233]

Here In Silicon Valley there is no Cadillac dealership anymore, Lexus, BMW, and Mercedes sales have been decimated by Tesla. Onbe could say they might be too late.

Doesn't surprise me in Silicon Valley per se. But somebody is selling all those Escalades the hotshots and their posses are being driven around in.

I'm guessing Escalade is Cadillac's real cash cow.

 

[DBC]

Great way to get rid of zombie dealers. The Hummer and Lyriq look good. The electric Escalade will sell as well.

FWIW Cadillac's problem was focusing on performance sedans as the market moved to CUVs/SUVs. Oops. Until recently the only SUV model was the SRX.

 

[srogers]

Here In Silicon Valley, there is no Cadillac dealership anymore, Lexus, BMW, and Mercedes sales have been decimated by Tesla. Onbe could say they might be too late.

Here In Silicon Valley, there is no Cadillac dealership anymore, Lexus, BMW, and Mercedes sales have been decimated by Tesla. Onbe could say they might be too late.

Stevens Creek Cadillac in Santa Clara is in Silicon Valley and there are several other Cadillac dealers nearby.

 

[bruceski88]

Great way to get rid of zombie dealers. The Hummer and Lyriq look good. The electric Escalade will sell as well.

FWIW Cadillac's problem was focusing on performance sedans as the market moved to CUVs/SUVs. Oops. Until recently the only SUV model was the SRX.

You are right, they closed the old St. Clair Cadillac which was a real dealer and this seems to be the smallest dealership ever. Yes you can drive 20 miles and find 2 others. MME will outsell them next year.

 

[ChasingCoral]

https://www.cnet.com/roadshow/news/...lblGncg-DNOhQqDDe95RU21oxDLizIJUdT555ydhgrXnE

Cadillac dealers are jumping ship rather than upgrade for EV sales, report says
GM's luxury arm is paying dealers unwilling to invest in EV sales to give up their franchise agreements.

Kyle Hyatt
Dec. 4, 2020 4:29 p.m. PT

Cadillac wants to make EVs its future, but some dealers aren't on board.
Cadillac

As Cadillac gears up to become a manufacturer of electric vehicles, it's reached a point where it needs to start preparing its dealer network for the change. This means lots of costly and mandatory upgrades to their facilities for franchised dealers unless GM gives them a way out of their franchise agreements.

According to a report published Friday by the Wall Street Journal, that's precisely what GM is doing. Specifically, GM is giving Cadillac dealers a choice between giving up their ability to sell any Cadillac and taking a buyout or investing hundreds of thousands of dollars into an uncertain future


Currently, there are around 880 Cadillac dealers in the US, and based on WSJ's reporting, as many as 150 of them have taken GM's buyout for dollar figures ranging from around $300,000 to as much as $1 million. This makes sense since many of these dealers also sell other GM lines like Chevrolet, Buick and GMC, and their Cadillac business may only account for a very small part of their overall yearly sales.

"The future dealer requirements are a logical and necessary next step on our path towards electrification," said Rory Harvey, global brand chief for Cadillac, in a statement. "Those who aren't ready to make that commitment are getting fair compensation for exiting the brand."

The trepidation from the dealer network is understandable when you look at the changes in the auto industry as a result of the COVID-19 pandemic and with the public's relatively slow adoption of electric vehicles. Add in Cadillac's unproven record with EVs, and that leaves a lot of room for things to go wrong.

Cadillac expects its first production EV, the Lyriq SUV, to hit showrooms in late 2022.
The Cadillac Lyriq electric SUV is ushering in a new era at GM
See all photos


+16 More
https://www.cnet.com/roadshow/news/...NOhQqDDe95RU21oxDLizIJUdT555ydhgrXnE#comments

 

[trutolife27]

https://www.cnet.com/roadshow/news/...lblGncg-DNOhQqDDe95RU21oxDLizIJUdT555ydhgrXnE

Cadillac dealers are jumping ship rather than upgrade for EV sales, report says
GM's luxury arm is paying dealers unwilling to invest in EV sales to give up their franchise agreements.

Kyle Hyatt
Dec. 4, 2020 4:29 p.m. PT

Cadillac wants to make EVs its future, but some dealers aren't on board.
Cadillac

As Cadillac gears up to become a manufacturer of electric vehicles, it's reached a point where it needs to start preparing its dealer network for the change. This means lots of costly and mandatory upgrades to their facilities for franchised dealers unless GM gives them a way out of their franchise agreements.

According to a report published Friday by the Wall Street Journal, that's precisely what GM is doing. Specifically, GM is giving Cadillac dealers a choice between giving up their ability to sell any Cadillac and taking a buyout or investing hundreds of thousands of dollars into an uncertain future


Currently, there are around 880 Cadillac dealers in the US, and based on WSJ's reporting, as many as 150 of them have taken GM's buyout for dollar figures ranging from around $300,000 to as much as $1 million. This makes sense since many of these dealers also sell other GM lines like Chevrolet, Buick and GMC, and their Cadillac business may only account for a very small part of their overall yearly sales.

"The future dealer requirements are a logical and necessary next step on our path towards electrification," said Rory Harvey, global brand chief for Cadillac, in a statement. "Those who aren't ready to make that commitment are getting fair compensation for exiting the brand."

The trepidation from the dealer network is understandable when you look at the changes in the auto industry as a result of the COVID-19 pandemic and with the public's relatively slow adoption of electric vehicles. Add in Cadillac's unproven record with EVs, and that leaves a lot of room for things to go wrong.

Cadillac expects its first production EV, the Lyriq SUV, to hit showrooms in late 2022.
The Cadillac Lyriq electric SUV is ushering in a new era at GM
See all photos


+16 More
https://www.cnet.com/roadshow/news/...NOhQqDDe95RU21oxDLizIJUdT555ydhgrXnE#comments

does this show the kickbacks the oil companies have played for years? does this show that the dealerships know that there will be fewer repairs? are less parts breaking down? less honest not honest your car needs this income? Some get out and cash out before the change.

Now the writing is on the wall for the EV push things will finally change quicker.

 

[JellyBelly]

https://www.cnet.com/roadshow/news/...lblGncg-DNOhQqDDe95RU21oxDLizIJUdT555ydhgrXnE

Cadillac dealers are jumping ship rather than upgrade for EV sales, report says
GM's luxury arm is paying dealers unwilling to invest in EV sales to give up their franchise agreements.

Kyle Hyatt
Dec. 4, 2020 4:29 p.m. PT

Cadillac wants to make EVs its future, but some dealers aren't on board.
Cadillac

As Cadillac gears up to become a manufacturer of electric vehicles, it's reached a point where it needs to start preparing its dealer network for the change. This means lots of costly and mandatory upgrades to their facilities for franchised dealers unless GM gives them a way out of their franchise agreements.

According to a report published Friday by the Wall Street Journal, that's precisely what GM is doing. Specifically, GM is giving Cadillac dealers a choice between giving up their ability to sell any Cadillac and taking a buyout or investing hundreds of thousands of dollars into an uncertain future


Currently, there are around 880 Cadillac dealers in the US, and based on WSJ's reporting, as many as 150 of them have taken GM's buyout for dollar figures ranging from around $300,000 to as much as $1 million. This makes sense since many of these dealers also sell other GM lines like Chevrolet, Buick and GMC, and their Cadillac business may only account for a very small part of their overall yearly sales.

"The future dealer requirements are a logical and necessary next step on our path towards electrification," said Rory Harvey, global brand chief for Cadillac, in a statement. "Those who aren't ready to make that commitment are getting fair compensation for exiting the brand."

The trepidation from the dealer network is understandable when you look at the changes in the auto industry as a result of the COVID-19 pandemic and with the public's relatively slow adoption of electric vehicles. Add in Cadillac's unproven record with EVs, and that leaves a lot of room for things to go wrong.

Cadillac expects its first production EV, the Lyriq SUV, to hit showrooms in late 2022.
The Cadillac Lyriq electric SUV is ushering in a new era at GM
See all photos


+16 More
https://www.cnet.com/roadshow/news/...NOhQqDDe95RU21oxDLizIJUdT555ydhgrXnE#comments

I dont know if GM buying out these dealers for just the Cadillac brand is going to work out. For GM to be successful in the long run they will need to electrify other lower priced brands as well and the EV requirements will apply in those cases as well. So these dealers may opt out of Cadillac but what will they do to support other GM branded EV vehicles if/when more of them get produced. Overall I believe all manufacturer dealers and mfrs will have to rethink the model for the future.

Its good to have fewer dealers though as I am sure not every one of the current dealers is profitable or great in service.

 

[dbsb3233]

Its good to have fewer dealers though as I am sure not every one of the current dealers is profitable or great in service.

I suspect that's more what this is really about. Frankly, GM looks like they're kinda fading anyway (not just with EVs but in general). And frankly, automobile sales period could begin to fade this decade. Dealerships see that the field may be gradually winnowing. If GM is dumb enough to pay them hundreds of $thousands to get out of Cadillac, some are probably thinking "Hell yes, thank you!".

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