By on November 8, 2021

Cadillac is expected to have lost one-third of its U.S. dealerships this year — going from nearly 900 physical locations at the start of 2021 to an estimated 560 by year’s end.

But there’s allegedly no need to worry about the brand because this is part of a planned electric offensive. Last year, Cadillac asked dealers to spend the capital necessary to install charging stations, update their service centers, and retrain staff to better tackle EVs or take a buyout before the automaker’s first battery-driven car (the Lyric crossover) hits the market early in 2022. It would seem that a meaningful portion of the whole decided to bow out, which Cadillac seems totally fine with. 

This resulted in around a fifth of all U.S. dealerships leaving the market in 2020. According to Cadillac Vice President Rory Harvey, another third of the remaining 880 storefronts are expected to have vanished before the sun rises on the first day of 2022. It sounds downright brutal, especially considering the swap to EVs resulted in some owners becoming particularly vocal about how General Motors was managing its luxury arm. But Harvey said it’s for the best, as the buyout campaign was designed to retain stores that were committed to Cadillac’s plan of having an EV-only lineup by 2030.

“We never actually had a [specific] number that we were looking for,” the VP told Automotive News this week. “We believe that this will give us the foundation to be able to accelerate going forward, and we believe that it does give us the ability to be very effectively represented.”

From AN:

Cadillac had more U.S. dealerships than any other luxury brand, and even after shrinking to 560 stores would still have a retail network 60 percent larger than BMW and more than double that of Lexus, according to the Automotive News Dealer Census.

Remaining dealers are preparing to upgrade their outlets for EV sales and service by the end of the first quarter, when the Lyriq, Cadillac’s first full EV, is expected to arrive in select showrooms.

The majority of Cadillac dealerships will start getting the Lyriq in June, based on a traditional allocation process, after the midsize crossovers are initially delivered to stores with customers who reserved them, Harvey said.

This includes cars booked at pop-up shops, like the recently opened Cadillac of Manhattan. Bram Auto Group created the temporary facility to help the company sell EVs in a region where it’s expected to have the highest take rate. Based on the number of Tesla vehicles I see parked on NYC streets on any given day, this is likely a shrewd decision. GM is keenly aware of this and has done its utmost to encourage experience centers and the like anywhere it thinks it can draw an affluent, urban crowd.

However, this is technically being done at the expense of rural locations and smaller storefronts that just don’t feel like they can survive the transition to EVs. While dealers that are taking the buyout aren’t allowed to discuss the matter publicly, we’ve still heard back from staff asking to remain anonymous and they’re all basically convinced Cadillac is pulling the trigger on EVs too soon. The brand doesn’t currently have an EV in its lineup and the Lyric won’t arrive until 2022.

Harvey said those payouts range between $200,000 on the low end to well over a million dollars on the higher end. But Cadillac has officially declined to disclose the dollar amounts and other terms pertaining to the buyouts.

This has not prevented those who have decided against taking the money from expressing their concerns, however, and it’s giving us a tinge of déjà vu. Back in 2016, Cadillac was offering buyouts to its 400 lowest-volume retailers because then-President Johan de Nysschen believed the brand had too many dealerships relative to other luxury brands. Known as Project Pinnacle, the strategy really strained the automaker’s dealer relations.

Now the brand is offering another buyout with even more stores being eligible under the auspices that Cadillac is ready to dive into electrification. While true, one does wonder whether the brand’s waning market share in North America also played a factor. Cadillac had a 1.31-percent share in its home market during 2005. But that dwindled to just 0.89 percent by 2020. Despite having a retail network that’s substantially smaller, the previously mentioned BMW’s U.S. market share was 1.91 percent last year — perhaps helping to identify the less-advertised advantages of GM’s EV buyout program.

Let’s be blunt. Over the last few decades, GM’s luxury arm seems to have forgotten literally everything about being a premium American automaker. When imported luxury vehicles started flooding into the North American market and neckties had grown uncomfortably wide, Cadillac immediately became a nameplate catering to older generations that remembered how undeniably superior its vehicles were in their youth. Then it abandoned its identity to pursue European trends and basically stopped manufacturing super-premium cars, though a few gems did manage to emerge during the 21st century (e.g. CTS-V).

Today’s Cadillac doesn’t even seem all that concerned with America and with good reason. The company has seen explosive market growth in China since 2007 and can now reliably count on moving substantially more vehicles in Asia than the U.S. It’s also selling those cars predominantly to younger buyers, encouraging brand loyalty from a demographic that didn’t buy a Cadillac as their final vehicle before stepping into the grave. With GM likewise shifting its manufacturing into China, originally as a way to avoid import tariffs, the intercontinental relationship has only gotten tighter.

“In China, young buyers already dominate the luxury market. Since Cadillac is a relative newcomer … it was far easier to begin to cultivate the desired positioning for the brand from the get-go,” former-President Johan de Nysschen said back in 2016.

Conversely, the brand’s attempts to attract American youngsters haven’t gone so well. Transitioning its headquarters from Detroit to New York City turned out to be a complete disaster and its model lineup has evolved into a slew of boring crossovers with some of the least refined interiors you can expect from any luxury brand. Ironically, Cadillac’s best product before it swaps over to electric cars is probably the venerable, gigantic, expensive, and fuel-hungry Escalade SUV. But even that is a vehicle you can find for less (minus some important bells and whistles) at just about any Chevrolet or GMC dealership.

That’s not to suggest this dealer buyout isn’t about effectively setting the brand up for electrification. We’re just not so sure that’s all it’s about.

[Image: Lerner Vadim/Shutterstock]

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56 Comments on “Cadillac Expects to Lose One-Third of All U.S. Dealerships This Year...”


  • avatar
    Lie2me

    Take the money, Cadillac dealers

    Most Cadillac dealers around me are just a corner of a “Chevrolet-Buick-GMC-Cadillac dealership anyway

    • 0 avatar
      Matt Posky

      Seems the smarter move. Smaller, single brand dealerships are on the way out as well. Most of the recent dealership growth has been in service of owners who have multi-store/multi-brand franchises.

      • 0 avatar
        FreedMike

        Assuming the product’s good, I think Caddy dealers in the right areas could do well.

        But the product is the big “if” here. I’m not encouraged at all by the Lyriq – even if it drives great, the thing’s ugly, and appears to try to make up for that with a bunch of silly styling gimmicks (the light-show grill, etc).

        I think an electrified version of the Escala show car should have at least been in the initial product mix for the “new” EV Cadillac…or maybe an EV Escalade pickup based on the upcoming Hummer EV, if that’s the way they want to go.

        But I don’t think the Lyriq is going to sell well at all.

    • 0 avatar
      Varezhka

      Do anyone have data on the rural/urban, coastal/flyover mix of the current Cadillac sales? It always seemed like Cadillac was throwing money chasing people who wouldn’t consider a GM if they had a gun against their head, all the while moving away from their current strengths and ignoring their customers.

      Continue building new iterations of DeVille wouldn’t do, but the wannabe 3-series of the de Nysschen era or the upcoming Tesla fighter are probably worse. They do have too many dealers given their sales, sure, but I do wonder if that 1/3 that they’re losing are the 1/3 that they want to cut.

      • 0 avatar
        FreedMike

        I’m assuming the 1/3 are the ones who would actually take the money and run, which tells me they’re the ones not making money as it is and don’t see much hope of that changing.

        In other words, the dealers who are going away might not be much of a loss.

  • avatar
    3SpeedAutomatic

    If the Lyriq is handled in traditional GM fashion, the dealers who leave the franchise are the wise men in the room.

    • 0 avatar
      Imagefont

      Making Cadillac into an all EV brand solves two problems for GM. It creates (in their minds at least) a Tesla competitor high zoot luxury brand, and it rehabilitates and reinvents the Cadillac name. But another way of looking at this is that it taints an EV luxury high technology effort with an old name and it’s baggage. It’s true that the only desirable Cadillac in many years has been the Suburban – excuse me – Escalade. Whoring out a Suburban is an act of defeat and says to the world you’ve run out of ideas. If GM wants to have a successful high tech luxury EV that’s actually desirable they should start fresh with a clean sheet of paper and an all new name. Expect yet another reinvention of Cadillac in a few years when this one doesn’t work either.

  • avatar
    FreedMike

    “Then it abandoned its identity to pursue European trends and basically stopped manufacturing super-premium cars…”

    1) Cadillac didn’t abandon its’ identity – they kept building big, floaty, RWD-BOF road hogs until the mid-’90s. Even the more modern FWD models were smaller road hogs. Their customers abandoned that identity by a) dying, or b) moving to a different brand (Lexus, mainly). They adapted to the Euro-trend way too late, and with product that was at worst awful (Cimarron), or indifferently executed (the ATS/CTS). They also completely missed the compact-CUV trend that Lexus caught with the original RX.
    2) Cadillac stopped manufacturing “super premium” cars at around the same time “Hawaii Five-O” hit the airwaves. From the late ’60s onward, they were building dressed up Oldsmobiles with some Cadillac bits, nicer paint, and more equipment. My family owned three such cars, and they might as well been Oldsmobiles.

    I suppose we can lament that their rural stores will end up largely closed, but affluent rural customers don’t want Cadillacs – they want dressed up trucks, and Cadillac gave up on those (thank God). if they insist on having a King Ranch-type pickup, they’ll buy a GMC or Chevy.

    Overall, probably a good plan – the brand is basically blowing itself up to become something different, and given how badly they’ve failed at pretty much everything, what else is there to do but go balls out and reinvent themselves?

    • 0 avatar
      dwford

      So essentially Cadillac has been a dumpster fire for 60 years. The last time Cadillac was the Standard of the World was 60 years ago before Germany and Japan had fully recovered from WWII

      • 0 avatar
        FreedMike

        @dwford:

        I don’t think the effects of cheapening the brand in the ’60s were immediately apparent. And they did have some very good product in the ’70s that was based on cheaper stuff (Eldorado and the Seville were platform-shared but they did a good job making them mechanically and stylistically distinct from their platform mates).

        But the early ’70s saw the meat-and-potatoes Caddies become far more “cheaped out” (cheaper interior materials, obvious styling similarities with far cheaper GM cars). Look at the windshield profile of an early-’70s DeVille next to a same-era Caprice, and you’ll see an obvious similarity. It became even more apparent when they downsized the line in the late ’70s.

        Even so, the brand chugged along until the ’80s, which is when the brand loyalists got old and stopped buying so often (or began to die off), and the younger buyers lost interest in retconned road boats like the DeVille and joke-mobiles like the Cimarron.

        For Cadillac to be truly “ready” for what happened in the late ’80s (the Euro brand onslaught, Lexus, etc), they’d have to have products in the pipe by the early part of the decade. They didn’t. We got the Cimarron instead.

      • 0 avatar

        Cadillac was all about the wings. Recall the wings ? Even Benz copied the wings. When Caddy lost the wings, it was the beginning of the end.

    • 0 avatar
      SCE to AUX

      Every legacy mfr needs to reinvent themselves, but I doubt GM will fund the divisions sufficiently to do so.

      As GM shrinks, the last survivor will be Chevrolet. I’d suggest the death order (in the US) would go according to sales (2020 figures shown):
      1. Cadillac (129k)
      2. Buick (162k)
      3. GMC (515k)
      4. Chevrolet (1730k)

      FWIW, Tesla’s 2020 sales (at 292k) equals Cadillac and Buick *combined*, but their trends are going in opposite directions.

      GM could whack Cadillac and Buick and only lose 11% of their sales volume, but have far fewer headaches. My guess is that they really don’t care how many Cadillac dealers stay or leave.

      • 0 avatar
        sgeffe

        They still need Bruick for the superpower that will eventually take us over.

      • 0 avatar
        dwford

        I don’t think any of these brands are going away anytime soon. China will keep Cadillac and Buick alive, but they will be China focused brands and we will just get whatever the Chinese want (which is likely to be better product than we’ve been getting anyway). GMC is an easy money maker for GM, stoking a phony “Professional Grade” image to sell higher priced versions of identical Chevy’s. Why quit that gold mine?

        The real problem for GM, and a lot of other brands is going to be how many consumers are really ready to take the EV plunge? There are practical limits to how many people can switch to EVs anyway, whether it is battery and chip shortages, the lack of public charging stations, the limits of home charging for renters and large building residents, etc. Then there is the problem of how to differentiate the brands when everyone is running on silent skateboard platforms. It’ll come down to interior and exterior styling, brand image, and perceived quality. All the GM brands are way behind in those departments, with possibly Buick being the best.

      • 0 avatar
        Funky D

        By my math, this equates to a healthy 12¼ sales per dealer each month.

        Even after the dealer cull, this average rises to a lucrative 19 sales for each dealer in a month.

        I would definitely take the money and run!

      • 0 avatar
        FreedMike

        For me it’d be down to Cadillac or Buick. If I saw some kind of coherent direction for Buick, I’d say keep it, but as it is, they just seem to be selling a fairly motley group of crossovers that you can get from other GM stores (including GMC, which shares dealer space with Buick).

        I’d keep Cadillac. As it is, I don’t see Buick doing anything more than sapping Cadillac and GMC sales.

        • 0 avatar
          el scotto

          @FreedMike Sir, Buick: the percentage of better materials than a Chevy is not worth the pricing percentage over a Chevy. Also, neither of our Brand Managers will ever admit that Toyota or Honda exists. Oh and we consistently have the third-best vehicle in any class behind Honda and Toyota. GM’s plan for eaking by.

      • 0 avatar
        28-Cars-Later

        They’ll take Cadillac down to ridiculously low volume but it won’t be culled. They may axe Buick but any change to Buick/GMC is going to jack up that distribution chain. Maybe Cadillac will merge with it replacing Buick, I can’t see them wanting to say no to all of the free money GMC generates selling Chevrolet reskins… unless somehow you could successfully sell GMC alongside Chevrolet then just merge it all?

  • avatar
    SCE to AUX

    I agree with the thrust of the article.

    Even though the Lyriq pre-orders sold out in an instant, if I was a Cadillac dealer I’d take the buyout. The brand is dying, and the low-volume Lyriq won’t save it from further decline.

    “Ironically, Cadillac’s best product before it swaps over to electric cars is probably the venerable, gigantic, expensive, and fuel-hungry Escalade SUV. But even that is a vehicle you can find for less (minus some important bells and whistles) at just about any Chevrolet or GMC dealership.”

    So true, and I’ll ask why GMC still exists. It’s still trying to be what Mercury was to FMC, and Ford killed redundant Mercury a decade ago.

    The eagerness of dealers to take the buyout has much more to do with their concerns about the brand than about electrification.

  • avatar
    Socrates77

    They don’t make luxury cars, they just put bigger LED lights and a few dumb customers buy them because they see a shiny object. They’re junk. My buddy’s XTS has paint chipping on the hood. Totally ripped off.

  • avatar
    Jeff S

    Dealers should take the buyout. The buyout is good for the dealers and good for Cadillac. Cadillac will never be the prestigious brand it use to be nor will it sell in the volume it once did in its salad days. Cadillac’s best chances for growth like Buick’s are in China. In the USA Cadillac and Lincoln are less important luxury brands than they once were now there is much more competition and most of the competition is better.

  • avatar
    Lou_BC

    “Cadillac is expected to have lost one-third of its U.S. dealerships this year”

    If one were to adjust based upon sales volumes, they’ll need to loose another 7/12ths of their network.

  • avatar
    el scotto

    Deep in the RenCen, a senior Cadillac dealer swallowed a handful of chewable anti-acids. Then he reached in his bottom desk drawer, pulled out the bottle, and unscrewed the cap. Sipping whiskey, my patootie he thought to himself; this is gulping down at 4 in the afternoon whiskey. Take this job they said, increases sales and we’ll fast-track you. Outsell Lexus and you’ll ride on the company jet for your vacation. Yes, it’ll make it to England; never mind we sold Vauxhall. Grinding his teeth as acid reflux tore through his stomach, he thought heck, Ford couldn’t sell a Continental and that was a damn fine car.

    He belched loudly and grimaced as he belch tasted like battery acid smells. Oh golly he thought, I went to a Tesla store. Skip or Emma in khakis and wearing polo shirts politely asked me questions. Emma even went through the ordering process with me. No trade-in haggling, no chance for Ally to get their loans; just fill out your order, pay your money, wait for your car to show up. Grabbing his expanding waistline; tennis had gone aside after this promotion. Skip or Emma will show you how your new Tesla works and not even try to sell you floormats. A disgusting way to sell cars.

    Wiping the sweat off his brow with a sleeve of snow-white Brooks Brothers french cuffed shirt; I can’t even relax at home. Taking another medicinal swallow of bourbon. I’m sitting on the couch, listening to the wife and watching pro football. Then Mercedes runs an ad for their EV car. Freaking Mercedes, Cadillac was that good; in the 1930s. From the 1970s on, all GM saw was their tail lights. What can I possibly do? he said to himself. Tesla gets the propeller heads, hipsters, and clinical engineering types. Mercedes will get the guys who wear Italian suits and their wives have Hermes handbags.

    I know the bean counters won’t let us build an EV with American swagger. A bad-ass, visually aggressive EV sedan that tells the world you’ve arrived. That concept, and hope were shot down years ago in “corporate planning meetings.

    He slipped outside and light a cigarette. He told himself; I’m tall, good looking, and went to the GM institute. GM always comes up with something new, perhaps not better but new and the next hot thing. Well, usually the next hot thing.

    A week on the lake bass fishing is what I need right now. Get up early, out on the water all day; no meetings, no incessant phone calls, just me and the fish.

    Oh hell the thought, they use electric trolling motors.

  • avatar

    hmmm, billions spent on remaking dealerships (that now sit empty) to fit a corporate mandate, then work to move retail operations online. next let’s try and decide where to have headquarters. then a real doozy… cut dealer margin which lowered sales commissions and disheartened sales staff nationwide. ok now let’s reduce our franchises in order to grow our business? this is madness! I could go on but you get the drift. no need to get into the battery fires and supply chain fiasco. tens of millions paid for failed decisions made by incompetent management. the biggest obstacles to success are inside the building. at General Motors, the results don’t change, only the excuses~

    “if management can’t sell Pontiacs, you don’t get rid of Pontiac, you get rid of management”

    Buickman
    Founder
    GeneralWatch.com
    DollingerDifference.com

    • 0 avatar
      redapple

      Buickman.

      I was in the belly of the beast for over 10 years. I got out when I was convinced it’s broken- top to bottom.

      1 UAW cost and inefficiencies.
      2 Buzz word kiss asses get promoted- not the best / most knowledgeable person.
      3 HR took over the company. Diversity was 1 -2 -3 consideration. THEN TALENT. The rest of the department will ‘cover’ for any problems. After all, we have 20 years worth of overlook candidates 1 or 2 levels under the new placemnt. GM s Golden Rule #1- The more you do, (the work, the more you get (more work)).
      4. The product has serious problems in styling or features or durability due to poor leadership / engineering because you had the ‘B’ or ‘C’ team in there.

      Compare any vehicle with the competition. GMs are always a step behind or a step below.

  • avatar

    Watch second-tier luxury carmakers like Infinity and Acura pull ahead of Cadillac. This is a foolish move for an already shrinking marquee. It seems Cadillac and Lincoln are destined to be bottom feeders. Does anyone here believe Cadillac is even going to sell 10,000 Lyriqs a year?

  • avatar
    Tele Vision

    ‘…became a nameplate catering to older generations…’

    Change that to ‘cratering’ and we’re on to something.

  • avatar
    Imagefont

    So GM’s idea for Cadillac is to be Tesla. That could work, but they need to redeem themselves and that will take time and real effort. They basically need to be better than Tesla is every way. Better cara, better autopilot (that won’t be hard), better batteries, better range, better warranty, better purchase abs ownership experience, better value. Better every which way. As GM doesn’t have the will, or the money, to do that.

  • avatar

    Cadillac, what a disgrace! Kia will replace Cadillac as an American standard of the world.

  • avatar
    ajla

    It is still hilarious that GM spent $20M to develop the Blackwing V8 and then proceeded to put it in ~1,400 cars.

    • 0 avatar
      el scotto

      @ajla Sir, I’ve always said GM should put their best (Corvette) engines in their top vehicles across the board. I’m pretty sure Ford truck engines are going in the Navigator. Volume discounts and all that stuff. GM considers Corvette and its engines the holy of holies. Put a Corvette engine in a Cadillac or make a go-fast Silverado? Blasphemy! Might as well ask to take their college-aged daughter upstairs for some deviant sex acts while the Wolverine game is on.

  • avatar
    here4aSammich

    So in order to remain with Cadillac, dealers must “install charging stations, update their service centers, and retrain staff to better tackle EVs”. That’s all well and good. I’m in a metro area of 400k+ that happens to have a major GM facility and GM employees who can buy at discount. One Cadillac dealer. Owned by the same clown that owns the local screaming Hyundai and Kia stores, so its the standalone store he inherited from Daddy. The local BMW dealer built an all new store 2 years ago. The Lexus dealer built a new store 10 years ago, just finished a rebuild to bring it up to current standards. The Cadillac store is still in 1992. It’s a colonial style building, the showroom is full of dark wallpaper and crystal chandeliers. No matter if this dealer invests in charging and fixing EV Caddy’s, there’s no way Cadillac is going to attract Tesla buyers with a replica of Grandma’s house for a dealership.

    • 0 avatar

      customers don’t give a shit what the store looks like.

      • 0 avatar
        FreedMike

        I do.

      • 0 avatar
        el scotto

        @Buickman Sir, I’ll buy you lunch after we’re done. My local Lexus dealer has three waiting rooms. One is for the saps who think that hanging out by the free coffee and snacks will get their car serviced faster. The second is a quiet area with free wi-fi and no grubby-fingered rugrats along with mommy while her RX-350 is getting an oil change. The third has two large-screen TVs with remotes. I had the Nats on one screen and the Simpsons on the other screen one Sunday night while I was getting my car serviced. My indie shop shuttles me to and fro in the Wiygul shuttle. Do I care if my service takes longer? I’m at home, the mechs can take their time.

  • avatar
    Jeff S

    Cadillac does have an opportunity to be a luxury maker of EVs but the incompetence of GM management will keep them from being a leader in the luxury EV market. GM needs a complete housecleaning starting with the CEO and top management. GM also needs to put quality and service first otherwise it is pointless to try. I actually like the Lyriq and the price is competitive but GM being GM will mess this up. I would trust Hyundai and Kia products before I would trust any new GM products.

  • avatar

    There are some positives when the Lyriq fails spectacularly like past EV Cadillacs. What will happen is that Cadillac will get back to making vehicles people want to drive. However, since they have closed so many dealerships they will never be competitive again. You have big problems when you can’t match the annual sales of Infiniti and Acura. The Cadillac EVs will just make things that much worse.

  • avatar
    28-Cars-Later

    Its finally happening, Cadillac is taking my advice from five years ago.

    • 0 avatar
      28-Cars-Later

      “That’s not to suggest this dealer buyout isn’t about effectively setting the brand up for electrification. We’re just not so sure that’s all it’s about.”

      Electrification, exemplification, Japanification, really makes no difference. I said before and will say again, they could either have mainstream product 900+ dealers could all in theory sell (i.e. ATS) or they could have bespoke Escala type product, I didn’t think they had the sales volume or caché for both. So five or six years later this is finally acted upon and it looks like they are choosing the “Escala” route by eliminating the many excess dealers – but don’t get your hopes up because instead of Escala level product you’ll get Cimmaron level at Escala pricing. Because its RenCen, they really have no idea how to handle this marque as decades of mistakes have shown. I have no doubt in recent years they have debated internally “why ELR didn’t work”, these people are *that* dense.

  • avatar
    Jeff S

    Reducing the number of dealerships is a good start and Cadillac has a chance if they make a competitive EV but as others have expressed their doubts about those in charge at the RenCen who seem to snatch defeat from the jaws of victory. GM needs to get their act together and take the time and the money to make Cadillac a quality luxury vehicle producer and learn from their mistakes. Would be good to use Lexus as an example on how to design and build a quality luxury vehicle.

  • avatar
    Jeff S

    You could do like Tesla does and order directly and have the vehicle delivered either to your home or a nearby place. You don’t need a dealer to buy a car if each state would change their dealer franchise laws. Also if the Government or the auto makers agreed on a standard for charging it would make it easier to charge an EV and make EVs more viable for many. Cadillac has too many dealers for the amount of their sales.

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