After '13 surge, Caddy eyes an encore
Cadillac sales jumped 22 percent last year. General Motors' luxury brand has a chance to continue the momentum with new and redesigned entries such as the just-launched ELR plug-in hybrid and the 2015 Escalade scheduled to arrive in the spring, says Bill Peffer, who took over in October as the brand's U.S. vice president of sales and service.
He spoke with Staff Reporter Mike Colias.
Q: What's your impression of Cadillac's retail network?
A: If you look at us versus our primary competitive set, we've got a large dealer body. But it's disproportionally skewed, where 200 to 300 of them represent the vast majority of our sales volume, over 70 percent. So what drives profitability for small multifranchise dealers in middle America is very different from what the guys in the import markets on the left and right coasts are dealing with day to day.
The redesigned 2014 CTS got a big price increase. How do you keep legacy customers who might be jarred by the increase?
If you look at Cadillac over the last several years, we've only had one sedan at any given time that sells in volume. If a customer isn't willing to go along with the repositioning on the CTS, you've got the ATS, and on the other side you've got XTS. We've got both ends of the spectrum.
Residual values on the ATS have dropped as inventories have grown. Is there a new approach?
There's always the question when your residuals drop: What do you do to your lease price point and how do you absorb this cost? We're going to remain competitive across the range of buyer types. That's cash, APR and lease. We're proud of what the car has done. Dialing in the right mix and inventory levels and buyer types, we probably have some work to do there.
Some dealers say Cadillac's advertising standards are too restrictive. Do you hear complaints?
There are 900-odd dealers and just as many opinions on what the standards ought to be.
Our objective is not to interject any type of legislative standard that prevents sales. It's meant to provide a consistent look and feel to the way we go to market and communicate our brand and our deals. I think we've done a pretty good job of elevating the level of communication without impacting our competitiveness.
Cadillac grew sales 22 percent last year. What are you expecting in 2014?
We've been growing the last two years about double the rate of the overall industry. We have growth aspirations. We have the new CTS. We have the ELR, the Escalade coming, the ATS coupe. There are at least two other major product initiatives for '15.