Cadillac dealers prepare for electrified future

Cadillac is preparing dealers for a future of electrification while also bolstering core dealership operations, executives told dealers at the make meeting last week.

"The big-picture message [to dealers] is let's embrace the opportunity with the current portfolio," Cadillac President Steve Carlisle told Automotive News. "We enter this decade as an internal-combustion-engine brand. We want to position ourselves to exit as a battery-electric brand, so we have to manage both at the same time."

Cadillac will reveal its first electric vehicle — a midsize crossover — in April, Carlisle told dealers. The brand plans to give dealers a more detailed preview of the next two years at a conference Sept. 1-4 in Austin, Texas.

Cadillac showed a rendering of the midsize electric crossover during the January 2019 unveiling of the XT6 crossover in Detroit. The crossover will begin a swift cadence of EV launches for General Motors. The automaker has said it plans to build 20 EVs globally by 2023.

"We want to start working with Cadillac and our dealers' future, which is EV," said David Butler, chairman of Cadillac's national dealer council.

The dealer council created an EV subcommittee, with three dealers and three Cadillac executives.

"We needed to study what electric vehicles are going to do to our operations now because they are coming quicker rather than later," said Butler, executive manager of the Suburban Collection, a dealership group based in suburban Detroit.

The dealer council also formed a go-to-market subcommittee to "work with Cadillac to smooth our business over to align incentives and marketing with product as it hits the stores," Butler said. "We know the product is coming. Marketing hits at the same time, and we've got incentives at play."

In January and through mid-February, dealers have recovered with strong sales after the UAW strike last year decreased their inventory levels, said Rory Harvey, Cadillac's vice president of sales, service and marketing. He expects the increase in sales volume to continue throughout the first quarter.

Aftersales loyalty and accessory sales also have picked up for Cadillac dealers, and Harvey expects that more crossovers in the lineup will position dealers for higher accessory sales volumes over the course of the year. Residual values on Cadillac models also have improved, he said.

"The underlying message there is that we've got momentum on our side," Harvey said. "This was not a difficult NADA meeting. Most things were moving in the right direction. We've got the product portfolio now. This is our time. Collectively between us and the dealer network, we need to take full advantage of that opportunity."