Cadillac is deeply into revamping its product lineup. The early phase brought success with the Escalade SUV and CTS sedan.
The 2004 model year has brought the XLR luxury roadster and SRX sport wagon to dealers' lots. Those vehicles will be followed next fall by the Seville successor, the STS, which will continue the division's sharp-edged styling theme and move to rear-wheel drive. And it is launching a performance series with the CTS-V.
That makes it a critical time for General Motors' luxury division, according to Jacques Moore Jr., owner of Moore Cadillac-Hummer and two other stores in Richmond, Va. Moore, co-chairman of the Cadillac National Dealer Council, says Cadillac needs to keep a strong focus on its heavy schedule of product launches if it is to maintain its momentum.
Moore was interviewed by Staff Reporter Dave Guilford.
Cadillac is changing. What were the high points for Cadillac in 2003?
We continue to have great success with our Escalade. Although we don't have the same raw volume with the core Escalade or the EXT that we had in previous years, we've more than made up for that with introducing the (Escalade) ESV. So among the family of models, we're still seeing sales gains. And given the life cycle of that product, that's pretty impressive.
What kind of customers does the ESV bring in?
In my store they tend to be either professional athletes or moms with big dogs or large families. It's a strange mix. But most of the folks who buy the ESV, at least in Richmond, have tended toward the customer who really likes having the extra cargo capacity.
How are the SRX and XLR doing as they roll out?
The biggest danger for XLR is that we're going to be leaving customers at the door unsatisfied because we simply do not have enough to go around. That's a good thing and a bad thing. I don't think there's a dealer in the country that has an XLR that's not spoken for. In fact, I don't have an XLR available if you gave me cash money at sticker. I wouldn't be talking delivery to you until August.
Is there any way to increase XLR production?
Obviously, in the first year of production, the numbers are a little more constrained. It will improve as we go downstream. The car is not intended to be a mainstream volume product anyway, so there is kind of an upper limit. I think that's a reasonable thing. We do run into the problem of competing with Chevrolet on Corvette production (at the Bowling Green, Ky., plant). Personally, I think a wait of eight months or nine months is three months too much. But if we can guarantee that anyone who comes in the door is going to get the XLR of their choice in five or six months at the worst, then we're going to be fine.
What about the SRX?
SRX has had a very strong start. Cadillac is a little unsure of what product mix is appropriate. We have a V-6; we have a V-8; we have all-wheel drive; we have rear-wheel-drive combinations for this vehicle. Just getting that down and identifying the ideal volume, price point, is still a little bit of a trick. We are not experienced enough to have that down to a science.
Are you discouraged, or is this normal start-up difficulty?
I'm not discouraged, but I am aware of it, actively aware of it, and we need to keep both eyeballs focused on the target. We need to make sure that SRX is a big hit. You're going to get some customers who walk in with the early production models and have a bit of sticker shock because they were built to showcase the best of our technologies. They tend to be very expensive vehicles.
The range of price is quite striking.
It's got about a $20,000 swing - mid-$40,000s to mid-$60,000s.
As Cadillac moves more fully into its new identity, how are the older vehicles holding up?
As with anything, as you get to the tail end of the life cycle, there's a certain absence of demand for the product simply because it's gotten stale. It is true to a degree with our DeVille family, although it's still a strong-selling vehicle. It does extremely well in our most mature Cadillac demographic, people who are for the most part longtime Cadillac owners, and they like the stability of knowing what every button in the vehicle does. We are going to have some enhancements to that product as it comes down the road.
How is the Cadillac dealer council working with GM?
The council really has its focus advising our Cadillac wholesale partners on the product, the direction of the product, marketing, making sure that we're of one mind in how we approach getting Cadillac to be standard of the world.
As one example, the dealers felt that it was important to have a reward for our sales staff to help keep our salespeople focused on generating certified pre-owned sales. So we approached Cadillac saying we really need to have some sort of recognition and reward program, much like we do for new cars, to support our certified pre-owned sales. We were able to get a program that's set up and run exactly the way our new-car programs are.
What does the new program change?
Now, for the dealer, the certified pre-owned sales are a reward component in the Standards for Excellence program. And for the salespeople, there's a monetary incentive for every certified pre-owned Cadillac they sell.
Do Cadillac dealers make money on new-car sales?
That's a score-keeping question, to a degree. We make money on new cars - we don't make a lot, but we make money on selling new cars. We do better on managing the profitability of our fixed operations. But dealers need to be wise about that truth. Our profits in fixed operations were generated in part by having really lousy product for a few years, so people had to come in and get work done. Now you've got the reverse situation. You've got a real danger that if you're not making money selling the car in the first place, your revenue stream will dry up in fixed operations.
Are you satisfied with the national advertising and incentive support?
I am. There's no question that our link to Led Zeppelin and the high-energy, high-impact advertising around the CTS has really changed our presence. Our SRX advertising is strong in terms of showing the best features of the product. We probably could stand to have a little more punch in it, but that's something that we're working on. It's not a CTS, but I think we can afford to be a little more in-your-face about it.