'Life is looking pretty good for a Cadillac dealer'
Dealer since: 1972
Dealerships: Sewell Automotive Cos., selling Cadillac and other brands at 14 dealerships in Dallas, Houston, San Antonio, Fort Worth, Plano and Grapevine, Texas
Average monthly sales at Cadillac dealerships: 400 new, 400 used
Other brands: Buick, GMC, Infiniti, Audi, Lexus, Subaru, Maserati, Mini
Quote: "The Cadillac dealer body would like consistency of management over the next five to 10 years. That would be the last piece of the puzzle."
After a dry spell, Cadillac dealers' showrooms soon will be flush with new and redesigned vehicles.
Last summer, General Motors launched the XTS large sedan and ATS compact, both new entries. Late this year, GM is expected to roll out a redesigned CTS sedan. The next-generation Escalade SUV and the ELR plug-in hybrid should arrive in the first half of 2014.
Cadillac dealers will focus on product training to prepare for those launches, says Carl Sewell, co-chairman of the Cadillac National Dealer Council. They'll also continue to sharpen their knowledge of the Cadillac User Experience, or CUE, system, Cadillac's infotainment offering that is now standard or available on most nameplates.
Sewell, who runs 14 dealerships in Texas, including four Cadillac stores, said the dealer council is urging Cadillac executives to provide sufficient marketing support for all the vehicle launches. He spoke with Staff Reporter Mike Colias.
After watching their lineup dwindle to just three vehicles, Cadillac dealers finally got some fresh product last year.
We were surely able to see the difference in the fourth quarter. The ATS has brought a new demographic to the showroom, a new group of customers. We're seeing people more interested in cars that handle very well and that are sportier in their appearance and the way they drive. It's been a tremendous help to us in attracting a new group of customers.
How has the XTS launch gone? What type of customers are you getting?
The XTS is more traditional Cadillac. But it's got a higher level of technology than we've ever had before. So we're able to attract those people who want that large sedan but who are also tech savvy.
What about the ATS? What have dealers found in trying to reach customers who haven't had Cadillac on their radar before?
The best way to sell the ATS is to get people to drive it because the reaction is the same every time: "Wow, I had no idea Cadillac built a car that drives like this." The traditional demonstration ride has more value for Cadillac today than ever before.
How have launches been going?
Product availability has been excellent. Communicating to the customer the level of improvement in these cars is more challenging. It will require years of work to adequately communicate to all of our customers how good these cars really are. It's not unlike the CTS-V. It's one of the greatest cars available, and it's still almost a secret. Those of us who drive one understand that. But I still have to explain it over and over when I run into people and they ask, "What are you driving?"
What do dealers think of Cadillac's advertising for these new products?
Pat Fallon, the head of Cadillac's outside ad agency, has stepped in to lift Cadillac advertising to a new level. The dealer council is particularly excited to have his personal participation in the development of the ongoing Cadillac advertising. The ATS is a completely new group [of prospective customers] they've got to work. I like those ads with the car being driven all over the world, with all the different cuts. They've gotten a lot of mileage out of that, and that campaign looks good.
Are local marketing groups using a lot of that national content?
Yes. And they need to so we can communicate about these products in the proper way. It's going to take a long time and consistent messaging. Our competitors didn't establish their awareness in the market overnight, and we won't either. It took BMW years and years to build a reputation. But you can feel the momentum, and you can see the difference in the people who walk in to buy an ATS.
How has the CUE launch gone? Have you avoided headaches that have plagued launches of other infotainment systems, such as MyFord Touch?
It seems to confuse the press more than it does the customers. The customers seem to choose the level of interaction they want with the CUE system. Cadillac has an information technologist in each dealership. Those guys have had a terrific reaction from the customer. We have not had any issues other than an occasional problem, but they're electronics. It's no different than an iPhone or iPad in terms of functionality or dependability.
Will enough Cadillac customers be interested in the new ELR extended-range plug-in hybrid?
The price of gasoline influences the desire for hybrid vehicles. Right now the price of gasoline is low. If it goes up, there will be more demand. The best thing about the ELR is how it looks. It's a sexy, beautiful car.
What else does the Cadillac lineup need?
We've got the new Escalade coming. We clearly need an S-class competitor. I think if we're going to be a global company that becomes the standard of the world, we absolutely have to have that car. There is no question. If you're a dealer like me in Dallas and you have the chairman of the board of AT&T or Exxon Mobil or Frito-Lay, and he can't buy a Cadillac that's appropriate for him, but instead he's got to go buy a 7 series or an S class, then you're not in the same ballgame.
What about a small crossover -- an Audi Q3 or a BMW X1? Would dealers welcome an addition like that, slotted below the SRX?
Absolutely. You need three SUVs or crossovers, three sedans, one coupe and one convertible. It's that simple.
What do dealers think of Cadillac's new management structure, with Bob Ferguson as global vice president?
Bob Ferguson has as good people skills as anyone I've met. As dealers get to know him, they will feel better and better about Bob. He has a clear vision of what Cadillac should be, and in my view it's the right vision.
We have to be competitive with Mercedes and BMW. He has lived in different parts of the world and has a global view. All of those things are very positive. He and [GM North America President] Mark Reuss made a commitment to work on Cadillac together. That's a great team. But the product ultimately determines our reputation.
What are your thoughts on GM's current leadership and the direction of the company?
I find [CEO Dan] Akerson's toughness and high standards and high expectations really good. I think he's brought a sophisticated financial view to General Motors. And I think Mark Reuss brings the automotive knowledge. The two are a great team.
What about Cadillac specifically? Chase Hawkins, head of sales and service, is relatively new.
It's impossible not to really like Chase. And he also brings that international experience. He's strong. The Cadillac dealer body would like consistency of management over the next five to 10 years. That would be the last piece of the puzzle. We're already getting most of the product that we need.
You also have Audi, Lexus and other luxury franchises. Is there a gap from a customer-service standpoint between those brands and Cadillac?
If you look at the sales satisfaction index from J.D. Power, Lexus is usually No. 1 and Cadillac is usually two or three. But every manufacturer I interact with is highly focused on those scores. It's gotten to be where those scores are so tight, it's kind of hard to differentiate. I think the service levels of all the luxury brands have gotten very good.
You're right. Cadillac's customer service rankings have done very well. So where can the dealer network go from here?
We've got to have great product, and I think design is becoming more of a differentiating point. Performance and reliability are almost a given. Great customer service can be a big differentiator if we do it right.
What's one example of a relatively new customer-service initiative?
Cadillac's included maintenance and its growing loan-car fleet for dealers across the country are probably the best examples.
Are Cadillac dealers profitable? Do you expect them to be profitable in 2013?
Cadillac dealers should be much more profitable in 2013. We'll have higher volumes with the XTS and ATS. And I think we'll get the CTS by the end of '13. If you really look out over the next year, life is looking pretty good for a Cadillac dealer.
Are Cadillac dealers making money on new-car sales?
All the departments have to function well for a dealership to be profitable. With increased volume, as Cadillac crosses the 200,000-unit threshold, the dealer body will get more and more profitable.
What can the factory do to help Cadillac dealers sell more vehicles?
Managment consistency and an S-class competitor for what it would mean on a global basis. We can't leave the top of the market unaddressed.
What is the dealer council's biggest focus for 2013? Is there a message you're trying to get across to the factory?
I'd say it's that we need to support all of our new products on all marketing fronts. Whether it's the V series or the new CTS, ATS, XTS or Escalade, those vehicles need to be supported in every way possible from a marketing standpoint.
That's a heavy launch schedule. Are you confident that they'll be able to shake loose enough marketing dollars to cover all of those?
It's comforting to know that with our current leadership, we won't see the launch-and-leave that was part of the old General Motors philosophy. The usual course is six or maybe nine months for a new-car launch. But if you don't support these vehicles for two years in the competitive marketplace of today, they're abandoned. Each launch should be a minimum of two years of strong marketing support. That's what the dealers would like to see. Sometimes it's hard to appreciate the need for additional awareness in markets like Los Angeles, San Francisco, Miami, New York. If you support them for two years, you can help that. Only the old GM would launch and leave.