More Dealer Drama From Cadillac and the China Connection [Updated: Cadillac Responds]

Matt Posky
by Matt Posky
more dealer drama from cadillac and the china connection updated cadillac responds

Cadillac told U.S. and Chinese dealers they will each need to invest at least $200,000 on electric vehicle chargers and staff training to continue selling the brand’s products after 2022. The message was communicated to dealerships on Wednesday via video messages from Rory Harvey, the luxury brand’s vice president of sales, service and marketing. Cadillac is moving on electrification (seriously this time) and plans to launch the Lyriq EV within the next two years, with more battery-driven models to follow. Update: Cadillac PR has responded, saying that what was communicated yesterday is for U.S. dealers only.

The brand says dealers must be ready for the transition, giving us flashbacks to Project Pinnacle — the Johan de Nysschen strategy that forced stores to spend money to provide a more premium sales experience that differentiated Cadillac as special. At the time of its implementation, many dealers wondered why they should bother taking on more overhead under the assumption that they’ll make extra money over time. While luxury-specific outlets don’t have much choice in the matter, those selling GM’s other brands in conjunction with Cadillac seem to be substantially less eager to implement the changes.

This has especially been true in rural areas where customers may not have the option of visiting a Cadillac-specific storefront. When they go to pick up a new vehicle, they’re likely to have to walk past a couple rows of GMC or Chevrolet products. Shop owners are wondering if its worth bothering footing the bill for the upgrades, especially since EV sales are likely to be substantially lower in areas without a comprehensive charging network and that’ll be all Cadillac is offering.

Perhaps more telling is GMC confessing earlier this week that only about half of its 1,700 dealers have decided to sell the upcoming Hummer EV.

General Motors may be running the risk of segregating its market. Cadillac will have urban areas with customers that can make its luxury EVs work for them while GMC handles truck-obsessed rural areas without charging networks. It sounds a little dumb but the automaker may just be leaning into existing trends in the hopes of getting ahead of them in the United States. The Detroit News helped illustrate this by interviewing a few Caddy dealers to get their take on the mandatory upgrades.

“It’s a game changer for us,” Inder Dosanjh, a Cadillac dealer with four dealerships in the San Francisco Bay Area, told the outlet. “The current product is very hot. Electrification just really fits in our profile.”

From The Detroit News:

David Butler, chairman of the dealer council and executive manager for Suburban Cadillac, which has three Cadillac dealerships in Michigan and one in California, said the investment might be a lot for a small dealer who makes few sales in a year. But there are investments, like redoing showrooms, that are “substantially more” than $200,000.

“I have no problem investing in the brand as long as we’re going to bring buy-in behind it,” he said. “Generally $200,000 is not a number that scares most dealers, but at some point you have to start making financial decisions about whether or not this additional investment is going to be worth it for you.”

While there are “core elements” required to serve future Cadillac customers, the changes can vary by dealership, Harvey said, noting that a smaller dealership might only need one charging station. Every dealer will be contacted by a field person at GM about the transition.

Though GM’s entire decision probably has more to do with Asian sales than anything else. The People’s Republic of China has more home and work chargers than anywhere in the world. It likewise has the biggest public charging network currently in existence and has been pretty good to Cadillac vs most other American imports.

Going electric is a clear play at the PRC and ensuring the brand has continued access to Chinese customers. The Chinese Communist Party has prioritized EV adoption and has been working with global regulators on establishing deadlines for the banning of internal combustion vehicles for years. While this is being done under the auspices of environmentalism, China is also one of the biggest dogs in the yard when it comes to battery production and knows an EV-only world would it a massive trade advantage over the West. Automakers are well aware of this, which is one reason you see global brands doing a lot of business within the country (e.g. Volkswagen and GM) focusing on electric cars a little harder than their peers.

More from Cadillac: “While we do see great opportunity for EV’s in China, this is not the reason for the new standards. We also see great potential in U.S. but we need to get the network prepared. This is the logical next step on our path toward EVs.”

.[Image: Lerner Vadim/Shutterstock]

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  • Inside Looking Out Inside Looking Out on Sep 17, 2020

    Communism rocks! China is ahead of USA! Where are headlines? MSM as usual is at sleep. We want communism! We want communism! Well are Cadillac dealerships so poor that cannot install EV charger in dealership? How are they going to transition to the Future? Or they are planning to stay behind forever and somehow survive? How is it possible?

  • CaddyDaddy CaddyDaddy on Sep 17, 2020

    Glorious chargers installed by glorious Cadillac Dealers for glorious people in a glorious nation.

  • Jeff S Some of us don't care either way we are not into this type of car. Most of these will be stored in garages waiting for their value to go up. As someone above noted this is an old body style which is retro 70s Challenger which after researching it came out in the 2008 MY which means a long run for a model that is in its 16th year. I have always liked these but if I bought one I would not spend this kind of money on one probably get the V-6 version and use it as a family car but then I am not into drag racing or muscle cars. For the type of car it is it has a decent rear seat and not too bad of a trunk. Most of us are not going to spend 100k for any vehicle at least currently so its not something most of us will buy and stick in a garage waiting for its value to increase. I am glad that these editions came out for those who can afford them and it keeps a little more color into what has become a very dull vehicle market but then with age I pick the dull appliance like reliable vehicle because that's what I need. Impressive car but not for me.
  • Jonathan The Germans. So organized they can appear disorganized. I agree with some others, classic names like Thunderbird, Imperial, Grand Prix, Ambassador etc. just have more appeal.
  • Bobbysirhan A friend had one when they first came out. He was CFO of some green California company and could charge the Volt at work. At home, the PHEV gave him an excuse to make his wife park her nicer car outdoors while the Volt get their condo's one-car garage. He liked the Volt, and he spent very little on energy during the 'first one's free!' era of EV ownership. Of course, the green company went bust soon after, and he wound up with a job that involved far more driving and ultimately the need for a more substantial car. I drove the Volt once after his wife had made a return trip to Los Angeles, depleting the battery. I don't know what a first gen Volt drives like with a charged battery, but it was really gutless with two adults, a yellow lab, and a dead battery. My other memory of it was that it had a really cramped back seat for a car that was about as large as a Civic. My friend who bought it liked it though, and that's not always been the case for GM vehicles.
  • MrIcky I think the Shakedown is more my speed of the last call editions- but this is impressive.
  • Dukeisduke I tried watching the live reveal last night, but after 15 minutes of jawing by MT+ personalities (and yes, I like Chris Jacobs and Alex Taylor), I turned it off.