By on February 20, 2014

2014_cadillac_elr_f34_ns_21314_600
A niche vehicle is one that serves a very specific set of buyers with a vehicle that’s defined by a specialized and uncommon or unique role; and is often knowingly sold in low numbers to satisfy that dedicated group. Sometimes it’s to test a market: The Miata created its own niche in the 1990′s, and became a role model for modern product, like the S2000 and BRZ/FRS. Other are more esoteric niches, like the Nissan Murano CrossCabriolet. Sometimes, niche cars bring buyers to a brand that they would not have thought about before.

Currently, one of our most popular niches is the hybrid segment, dominated by the Toyota Prius. Chevrolet threw their hat into the ring, inadvertently, with the Volt. Though primarily an electric car, it does run the gas engine as a series hybrid with engine lockup if needed for maximum efficiency. The sales have been mediocre, pushing just over 23,000 units in 2013. The Prius? It sold over 145,000 units in the same time period..

Is it any wonder, then, why 43% of Cadillac’s dealers aren’t willing to take the up-market, $75,000 (before $7,500 Federal tax credit) Cadillac ELR? It’s a niche of a niche. And it’s an expensive one for dealers to take a risk on. 

 

Edmunds reports that 410 out of Calliac’s 940 dealers will not take delivery of the new ELR, an fairly astonishing 43%. With fuel prices relatively low and a high sticker price, there appears to be little demand for the ELR, and dealers are keen on it. Jim Vurpillat, Cadillac’s global marketing director, told Edmunds in an interview that dealers “might look at (ELR) and say, ‘Ok, if I sell one of these, I got to have service charging stations, special training, a sales area. I have to buy special tools… If they don’t think they will sell more than one or two units a year, they would do the numbers, and it is probably not worth it.”

The cost for the training, additional tools, and other EV equipment can total $15,000 according to Edmunds. It’s just too costly of a chance for many Cadillac dealers to take. Most sales are expected to be in California, Dallas, Miami, and New York City, says Vurpillat. In Austin, Texas, our single Cadillac dealership has had one in stock.

But, at which point do we look at this as no longer chasing a niche, but falling into failure? Is it nearly half of your dealer network saying “no, thank you”?

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68 Comments on “Cadillac Reports 43% Of Dealers Will Not Sell ELR...”


  • avatar

    Fuel prices are still around $3.75 for super premium unleaded 93 here in NYC. I can only hope they get lower now that the Keystone XL pipleline is in the works and we aren’t at war with Syria (like they expected us to be until Putin stepped in).

    The ELR has an $82,000 price tag since dealers order them with options and some of the buyers won’t qualify for the tax break.

    There are 4 Cadillac dealers within 25 miles of me.
    Northbay (where I bought mom’s STS), Sarrant, Manhattan (which is a bunch of scam artists who tried to rip me off on an Escalade) and City Cadillac (which is Ok).

    All of them stock just TWO of these ELR.
    (I reviewed one from Sarrant).

    I still believe the ELR would do better if it was a 4-door and if GM did more to make it look unique. This car looks exactly like a regular CTS Coupe. Why buy this when I could save $8000 and get a CTS-V COUPE?

    I like the idea of a plug-in/gasoline backup, but not if I have to sacrifice interior space…which has been the problem with hybrids and EV until the Model S gave us a “big car” with fewer compromises.

    It’s all about big cars.

  • avatar
    Land Ark

    There is no more taking chances in the auto industry.
    Also, apparently building a coupe is taking chances in the US.
    Current new coupes available for sale by US manufacturers for less than $100k:
    ATS (coming)
    Camaro
    Challenger
    Corvette
    CTS
    ELR (coming)
    Mustang
    Viper

    Drop that below $30k:
    Camaro
    Challenger
    Mustang

    It is the best of times, it is the worst of times for the US auto industry.

    • 0 avatar

      The Honda Accord Coupe and Dodge Challenger are the largest coupes you can get with a V6 for less than $30,000.
      It’s like driving a full sized car with two doors!!!
      And MOPAR offers a 6-speed manual.

      • 0 avatar
        PonchoIndian

        so does Honda on the V6 coupe.

      • 0 avatar
        cdotson

        You can’t get the 6-speed in the V6 Challenger. You have to get the HEMI to get the 6-speed. Which I think is monumentally stupid. Not only can you not get the 8spd auto in the Chally you can’t get the manual with the entry-level engine. Not to mention you can’t get the manual in either of its platform mates.

        • 0 avatar
          Kyree S. Williams

          Automakers are in the business of making money. That means that, before releasing or updating a car, they run all kinds of numbers and research to see which combinations will be worthwhile, and which won’t. But even *I* can see why there wouldn’t be a V6-manual Challenger. Since the Challenger is really just a large coupe—and not a balanced performance car like, say, the Mustang—the number of people who’d want the smaller engine with a manual transmission is probably very small. The appeal of a large car with a row-it-yourself gearbox and a V6 just isn’t there. I do think that the manual transmission should at least be offered in the SRT8 version of the Charger (not so much the 300), but Chrysler Group surely did the research.

          As to why the Challenger does not get the 6-speed or 8-speed transmissions, I’d chalk that up to Chrysler Group biding its time until that car gets replaced with the upcoming SRT Barracuda. It’s probably the same reason that the Challenger did not the upgraded electronics infrastructure that some other cars did, which would have included a new instrument cluster, the addition of Uconnect, new HVAC controls, and a new key fob. After the 2011 update, the only noticeable things that Challenger got were the new V6, the new corporate steering wheel, and the new door-handles (all of which was shared with the Charger).

    • 0 avatar
      jpolicke

      You left out the Genesis and the FRS/BRZ.

  • avatar

    I think about 50% of Tesla Model S sales are in Silicon Valley, and nobody considers Model S a failure.

    However, I suspect Model S is successful there because it is tailor made for the taste of Silicon Valley’s denizens. Of course they are always going to root for the home team, Tesla, as opposed to the interlopers at Cadillac.

    Here in South Florida, anyone can sell any car as long as it’s unique and distinctive. So I have seen about 12 Model Ss over time, two a couple of days ago. Fashion here is fickle, so I’m guessing a few ELRs will be successfully sold and hit the road, just as I’ve seen a few Fisker Karmas.

    Unlike Silicon Valley, the people in South Florida who care about how green their cars are tend to be broke. I really don’t think there is a distinctive green car market here. Model S is selling because it’s cool and distinctive, not because it’s environmentally progressive.

    Tesla Model S is more than double the price of the Volt, in some configurations, triple. There are no cheap special lease deals on Model S. That being said, I have seen only two Volts and two Leafs in South Florida. If my memory serves, I have seen about four Karmas and (as I said) 12 Model S. So we can see that style rules here, and price isn’t much of a barrier.

    If Cadillac can be successful anywhere, it will be here. But I have my doubts. It looks too much like a perfectly ordinary Cadillac coupe. And it’s all too obvious the technology is from the Volt, which has a tinge of failure. I still think they should have introduced the ELR instead of the Volt, or introduced the Volt as a Cadillac sedan.

    However, I can pretty much guarantee that ELR will sell more units here than almost anywhere else, because we crave novelty. I see it selling microscopic numbers outside of the Coasts, with the possible exception of the Detroit area itself.

    So I think the dealers who don’t want to sell it are wise. I’ll bet 10% of the dealers will make 90% of the volume on this car, even if it sells enough units to be a modest success.

    D

    • 0 avatar
      CoreyDL

      Saw a Model S go by my house twice recently, as I was leaving for work. Even here in Ohio in the freezing weather, it looked great.

    • 0 avatar
      Phillip Thomas

      Model S sedans are very common in Houston and Austin, Texas. I’m told by an owner (of the one I did a review on) that Austin is right behind SF and LA in sales, despite the lack of dealers.

      His particular Tesla was demo car, so he got it for about $100,000, flat.

  • avatar
    Hummer

    I’m confused how anyone defines $3.20 gas as relatively low, but whatever floats your boat.

  • avatar
    KixStart

    Are hybrids in general still really a niche? Prius sales are about as strong as the Malibu or Impala and hybrid options sell well on the Camry, Fusion, Avalon and Sonata.

    • 0 avatar
      danio3834

      Yes. As a whole, hybrids are still a very small fragment of the market. The Prius lineup pretty much defines the niche with nothing else even coming close. In total Hybrids only make up about 2% of total sales

      • 0 avatar
        mcs

        The numbers I have from EDTA put the percentage of all electified cars (hybrid + plugin + electric) at 3.81% for all of 2013. January 2014 is 3.27%.

        • 0 avatar
          NormSV650

          Last summer they estimated diesels sales to almost match hybrid sales. Maybe we’ll see a diesel in the Volt chassis.

          http://business.time.com/2013/08/23/2014-may-turn-out-to-be-the-year-of-the-diesel-engine/

  • avatar
    SCE to AUX

    Of course it’s a failure, just as I and many others predicted before.

    There are really only two pure EVs that matter – the Tesla Model S and Nissan Leaf. Every other nameplate is statistical noise in terms of sales volume. The Model S sells well because it performs, and looks great (and it’s cheap to operate). The Leaf sells well because it’s reasonably affordable and can be operated for virtually no cost.

    The Volt has sold less than Chevy predicted, but much better than I thought, keeping pace with the Leaf in the US. The Volt cures range anxiety, but it needs two fuels to do its thing – something I would find annoying.

    But the ELR IS the 2014 Cadillac Cimarron.

    Cadillac buyers don’t want to mess around with power cords (in addition to gasoline), and they’re not too worried about fuel economy. And while Cadillac has been trying to establish a performance image, the ELR can’t deliver.

    I don’t blame Cadillac dealers for not carrying the ELR. I think it’s less about the money than about the brand image.

    Cadillac’s sales predictions for this car are WAY off the mark, and I predict an early exit from the market.

    • 0 avatar
      Dr. Kenneth Noisewater

      $25,000 on the hood and I’d possibly consider one, since a coupe makes for a good commute pod.

      That said, IIRC reviews commented on a lack of headroom, which is already a problem in the Volt.

      I kinda think Lutz was right: Voltec would make a much bigger difference in a midsized CUV and other larger vehicles.

    • 0 avatar
      ellomdian

      Why does an electric Versa matter? I mean, don’t get me wrong, it’s a nice little car, but I don’t see how it somehow rises to the pantheon of “2 EV’s that Matter” – unless you are simply throwing out the 2 EV’s you can actually go to a store and buy.

    • 0 avatar
      wumpus

      When GM eventually explained the range extender strategy, I thought it would make more sense to make the current Volt a caddy, and make a hybrid by using the same car with 10% (or so) battery as a chevy.

      I was also expecting more efficiency from the extender, I hope they get a better one the next go around.

  • avatar
    PonchoIndian

    Not sure what the big deal is. Its a dead sexy looking car and give Cadillac buyers and option to own something different. I don’t think they ever thought it was going to sell in high volumes or ever be profitable.

    Comparing it to a Cimarron is really doing the ELR a disservice. Its a hell of a lot more than a rebadged Volt.

    • 0 avatar
      SCE to AUX

      “Its a hell of a lot more than a rebadged Volt.”

      Like what? The Volt is ALWAYS mentioned when describing the ELR, and Cadillac didn’t tweak the drivetrain enough to put it in the same class as its other cars. The rest of the bling can’t be worth $40k.

      • 0 avatar
        PonchoIndian

        Its always mentioned because blog and magazine writers don’t have much imagination. Sure the powertrain is similar (ELR has more power) and the chassis is similar, but the ELR has more premium features and tuning like magnetic ride control. The ELR also has much much higher grade interior materials.

        If you want to get to basics, its like calling the Audi TT a VW Beetle.

        • 0 avatar
          Carlson Fan

          I’d have to agree with that statment somewhat. The most important part of the ELR is the Voltec system that moves it. And it is for the most part identical to what you’ll find under the hood of the Volt. It also contains the same battery pack, the 2nd most important component, which is the best you’ll find in any EV period. But again exactly the same as the one in the Volt.

        • 0 avatar
          SCE to AUX

          “its like calling the Audi TT a VW Beetle”

          Since you brought it up, the Beetle sells 10-20x as much volume as the TT, which is priced 2x the Beetle. I think it’s a pretty good comparison, except the TT fits the Audi demographic nicely.

          I’d expect similar sales performance out of the ELR with respect to the Volt, except possibly worse since the ELR’s plug-in requirement doesn’t match the Cadillac demographic.

          If my prediction is right, Cadillac will move maybe 1000 ELRs in 2014. They sold 41 in January. So each Cadillac dealer who signed up for the ELR will have invested $15k to sell 2 cars this year.

    • 0 avatar
      wumpus

      Badge engineering might be a problem, but it isn’t a very big one. Plenty of brands exist for badge engineering and Cadillac does well enough.

      The problem is that after all the badge engineering, to justify the price the thing better well be the “Cadillac of Volts”. It isn’t. The Tesla has that title wrapped up and the ELR is unlikely to come even close.

  • avatar
    Nicholas Weaver

    The ERL is a dog: I’ve been meaning to testdrive it, but I haven’t yet, but I’ve testdriven all the others (Volt, Leaf, i3, Tesla).

    The Tesla blows that volt drivetrain out of the water, for roughly the same money!! The only thing the ELR has that the Tesla doesn’t is some of the techno toys, but those techno toys are wrapped up in the CUE abomination and a useless package.

    At the same time the i3, even loaded to the gills, is $20K-$30K cheaper! And still blows away the Volt drivetrain.

    The ELR could have sold if it was $5K-10K more than a comparably equipped Volt. Before the price was announced and it made sense to think it was a $10K “Nice Volt” option it was on my shopping list. But now? Nope. Nada.

    Heck, which would you rather have? $80K for a ELR? Or buy a Nissan Leaf + Corvette for distance for $90K?

    • 0 avatar
      PonchoIndian

      They must be losing money on every i3 they make, no question about it.

      The Voltec powertrain has an advantage over both Tesla, Leaf and BMW, it will go a reasonable distance without having to stop.

      • 0 avatar
        Nicholas Weaver

        I disagree: the i3 is probably not making money but I doubt it is losing money.

        The drive module (the Aluminum base chassis, battery, motor, etc) really costs not much more than the Leaf: the big difference is better thermal management on the batteries.

        The top is more expensive with all the carbon fiber, but the real cost is not necessarily the cost but the production limits: they can only produce so many. The body panels are plastic (think Saturn) and therefore actually cheaper than steel.

        And the interior, although very nice, is clearly “built to weight”, which also has the effect of dropping costs a lot. Using two fixed screens rather than touchscreens also probably lowers the cost considerably.

        Finally, don’t forget the BMW “nickle and dime” up the wazoo. $1000 wheels. $1500 self-parking. $500 seat heaters (IMO necessary on an electric: far more efficient than the air heater for heating the car) $2K tech pack (which EVERYONE will want because it include the remote phone interface, which is one of the big perks of an electric: heat the car before you get in etc, the nav system with notes on charging stations, the adaptive cruise control etc).

        That is good for $3K-$4K more per vehicle in items that really are almost pure profit.

      • 0 avatar
        redav

        What is a “reasonable distance”?

        It is incredibly rare that I put 75 mi on a car before tucking it away at night, so there’s no advantage in range for me (and many other real-world drivers).

        • 0 avatar
          PonchoIndian

          I know many other real world drivers who do more than 100 miles a day (myself included). Plus it is nice to take a trip once in a while that is over 100 miles before having to plug in for hours.

          Don’t get me wrong, I think the Tesla is great (it should be for 100K), but I don’t understand all of the hate directed to the ELR other than people’s bias regardless of what it is.

          • 0 avatar
            Carlson Fan

            It isn’t always about how far you drive. Maybe you live in Minneapolis/St. Paul. Tonight as you leave work your 30 minute commute turns into close to 2 hours due to weather. You sit on snowy traffic choked roads with your lights on and the heater running. The cold weather reducing your battery range. Maybe your 2 young kids are with you to add to the stress. And if you don’t make it a tow truck showing up is probably another 1 to 2 hours because they are busy and like you can’t get around very effciently. So your siting in a cold, dead, car at night, with 2 cold whining/crying kids. All of a sudden that gas back-up in the ELR sounds like the best thing since sliced bread.

          • 0 avatar
            wumpus

            @Carlson Fan

            I suspect that if you had to deal with Minneapolis/St. Paul, nothing that required a battery for more than starting would be a great car. A better issue is dealing with the unexpected: snow in Atlanta, or possibly just travel in places you weren’t expecting snow (I was surprised by snow going to Yosemite in what I thought of as “not snow season”, but I can’t recall the month now).

            Battery issues will be constant in Minneapolis (you wouldn’t have an issue today because the car isn’t coming out of the garage until May). Battery issues will happen in DC or Richmond, but the car might be ideal any other time. Battery issues in Atlanta? You might as well walk before trying to deal with Georgian drivers in snow.

            Of course, if you have extensive wind or solar power as well, you might take what you can get. If sales depend on “Minneapolis drivers with windmills and range anxiety”, expect “ELR” to replace “Edsel” as the name for marketing flops.

  • avatar

    the biggest impact this car will have is the negative effect on the Cadillac brand image.

    • 0 avatar
      Detroit-X

      True.

      And it’s not fuel prices. Nope. The real reason is the ELR is a dud right out of the gate: It costs too much. Even the ‘stupid rich’ would look way too stupid to buying one. GM could have gotten a $5000 premium by simply putting this metal on a Cruze, with a 2.0 turbo, but nope. Some GM PowerPoint file was too convincing against it. This is just another in a long history of poor decisions by the overrated, Yes-Men club of GM execs. Remember the XLR? GM doesn’t.

      • 0 avatar
        NormSV650

        If you can wait you’ll love the used market. My Verano 2.0T 6MT with 6,000 miles costs less than the base price of a Cruze LTZ and has more options included.

      • 0 avatar
        ellomdian

        The only problem with the XLR was that GM was still in the initial war on “Old men buy Caddys” mode, and they built an up-market GT out of the outgoing ‘Vette to help market the Art & Science image.

        It’s too bad they felt obliged to pull the trigger so soon – if they had waited ~2 years, the CTS and Escalade would have already established the style, and the XLR would have been a true halo instead of a concept rushed to production. It would likely have been designed alongside the C6, debuted with a -V model, and would have given the Corvette-cruiser crowd an aspirational car in the same league as the SL and 6.

  • avatar
    fredtal

    I’m not in the market for any $75,000 car, but I am looking for niche model, a station wagon. I would hope that someday manufacturers would realize the value of niche vehicles and figure out a way to make a profit on lower volume (10,000?) vehicles. I know much of this is due to the regulations but also accountants and marketing have a stake in homogenizing vehicles.

    • 0 avatar
      redav

      Oh, they can make a profit–they just charge more.

      I think it’s all the other work that goes into it–inventory, bandwidth, marketing, etc., that causes companies to offer minimal variations (except BMW, who has apparently never seen a variation they didn’t like).

  • avatar
    ClutchCarGo

    I find it interesting that everything ELR is optional for the dealers. If I owned an ELR and was travelling, I would expect any Cadillac dealer to be able to service it, but this post suggests that won’t be the case.

  • avatar
    CoreyDL

    I see a problem in the design. Those inset door handles seem like they’d attract scratches to the paint, by women wearing big rings/jewelry, as wealthy older women tend to do.

  • avatar
    RogerB34

    Cadillac dealers in Ca. will sell the electric because they have no choice.


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