In the wake of middling sales, despite new models, General Motors has been quickly reshaping its Cadillac brand. But the latest report out of the automaker’s downtown Detroit headquarters says that the brand won’t look to dramatically crop its dealership network. Cadillac had been planning to drastically trim its ranks to achieve a more efficient, Lexus -like franchise setup focused on big cities.
As of January 1, 2009, Cadillac had 1,422 dealerships – several times over what its chief Lexus, Mercedes-Benz and BMW rivals offer. Analysts have long stated that Cadillac’s image and its individual dealer profitability have suffered because of the widespread nature of its dealers; few metropolitan areas with more than 75,000 inhabitants don’t have a Cadillac dealer.
Now, the automaker will apparently rebuild its ties with its small town dealers, according to an Automotive News report that cites interviews with dealer lawyers and consultants.
“It doesn’t take a rocket scientist to understand,” said Ron Coleman, a dealer lawyer in Tacoma, Washington, told the journal. “It wasn’t costing GM a lot of money to have dealers in small markets sell Cadillac s.”
Naturally, part of the change of heart at GM stems from the automaker’s failed efforts at reducing its line-wide dealership lineup by about 2,000 stores. About 922 Cadillac dealers were counted in that number, which included many stores that sold more than one GM unit.
“We think that GM realized that terminating these dealers would leave a lot of loyal Cadillac customers orphaned and not produce a material benefit in the form of increased sales,” said Ernie Manuel, president of dealer consultants Fontana Group, in an interview with Automotive News.
References
1. ‘GM scraps its plan…’ view
