Cadillac dealers anticipate increased sales this year despite a bumpy 2005.
The head of the Cadillac Divisional Dealer Council says the product mix is right, the new Escalade will be hot, and the V-series performance vehicles will make the brand a contender to lead the luxury market.
Marc Lockhart spoke with Staff Reporter Jamie LaReau about where Cadillac has been and where it's going.
What are Cadillac's hot products?
This is our fourth consecutive year with volume increase year over year.
If you look at CTS, its first launch was in the fall of 2002. Each year it's had an increase in volume. CTS had 61,000 sales in 2005, up 7.5 percent from 2004.
We also have the launch of our GMT900 series full-sized truck, the Escalade, at the end of January. Our long-base models won't launch until June. So that should give us more increased volume that we didn't have in the fourth quarter.
Our hot products for 2006 will be the new Escalade and two new V series. The XLR-V, they'll make about 750 of those and about 1,500 STS-Vs. These are high-performance luxury cars.
The current rollback of $3,000 on the price for the SRX puts us on the shopping list.
The redesigned DTS never got its full momentum going in the fourth quarter. Production has now smoothed out. So we could see increased sales in that product vs. 2005.
We want to be in the high-performance category. With our portfolio, we're going in the right direction.
If you took GM's market share decline, we fared better than the rest of GM. If we continue to go to market with a premium performance, we could increase 2005 in volume.
How important is the Escalade to the lineup?
It's going to be a tremendous truck.
I'll guarantee that will be a hit. The market's ready for this truck.
It is incredible with the subtlety of the interior, the exterior chrome - it puts styling with better performance and better fuel mileage.
It's the epitome of luxury in a truck.
What else do dealers want in the lineup?
We could probably wish for multiple types of products, but with what we have on the Sigma platform and the GMT900 series we have a good base, and if we can continue with our CTS volume, we'll continue on a volume basis.
Our goal is to stay premium and go to market in a premium way with our current product portfolio. This is phase two of our renaissance.
What challenges do Cadillac dealers face in the next year?
Our biggest challenge is the unexpected rise of fuel costs.
We all realize after what happened last fall how vulnerable we are with the uneasiness of rising
What is the top priority of the dealer council in 2006?
Our top priority would be to operate and maintain a premium focus in our marketing and how we go to market.
How will you do that?
We will do it one day at a time and with every customer at a time. It's our responsibility to wow customers and to give them a truly Cadillac experience in our showroom.
How is Cadillac General Manager Jim Taylor doing?
Jim's doing well.
He fights for the Cadillac dealer body to maintain this premium focus and make that ownership experience as great as it can possibly be.
How many dealers are building the new architect-designed stores?
I really don't know, but I'm sure there's at least close to 200 new facilities being done now.
That goes back to the premium experience.
What has been your biggest disappointment as dealer council chairman?
My biggest disappointment is that we didn't have as good a year as we probably should have.
With Cadillac's products - for example the SRX. We have to find a way to market that car. It's a tremendous vehicle. Everyone who owns it loves it.
It just hasn't reached the volume it should.
We look at how we can better position that vehicle. For the awards it's won, it should be doing more volume.
What are the dealer council's top concerns?
Repositioning and marketing the SRX.
Another would be to get our Escalade launch off correctly and get some momentum going in that vehicle, launching our V series - they're small in volume, but high in prestige. They have high visibility and are extreme performance vehicles. So to get those in the right people's hands, and that'll be a challenge because we've never had 469-hp vehicles.
I think we'll have a fifth consecutive year of increased volume. We have the right leadership with Jim Taylor and his group. They're very focused on quality and the premium experience.
And we need to go to market with a premium focus.
How is GM responding to those concerns?
They're reacting in a positive manner. They have multiple issues they are dealing with, but I feel they're listening to us and understand what's happening. I'm one of those guys who believe that everything happens when it's ready. They know what we're asking for.
How satisfied are dealers with Cadillac? Is satisfaction improving or diminishing?
It's improving. The value of a Cadillac franchise is improving every year. With these products and portfolio we can now be legitimate contenders in the luxury market. Our volume can now increase. Our dealer body understands to succeed in this market you have to be consistent and be good at what you do and roll up your sleeves and do it.
If the competition is as good as you, what would you do? Be better. So every dealer, every sales manager every contact in the country we have, has to do better every day on a consistent basis and deliver a premium experience, and if we can be consistent on our delivery we will increase our volume.
I don't have the forecast numbers, but all the dealers anticipate an increase in our sales this year.
How do dealers feel about GM's move toward value pricing despite the difficulty it has had in marketing the concept under total value promise? Would you rather have the customer incentive sales?
Ultimately to the customer it's the same thing. If the repositioning of the price is better perceived by the customer, then they'll be shopping in the showroom. I don't think we need heavy incentives on premium products.
If you have competitive products in terms of quality, design and engineering, and they're competitively priced, then we can win that battle.
Do your dealers have the right product mix and overall marketing strategy to be successful?
Absolutely. And as we look at the new generation of products coming through the phase two of our renaissance - we have a new CTS to launch in the fall of 2007 - as the portfolio of new products for Cadillac gains momentum that will make us very competitive in this luxury segment.
The quality is good, the products are good - and if we act as a dealer body as a premium brand, we can win in that segment.
Can you get the vehicles you want?
We pretty much can order what we want. What happens is when you get a new model rolling out, there are some the constraints at times that don't let us get the free flow that you want.
The Escalade is rolling out pretty free-flow right now, and you can get what you want. We've ordered every car that we get. I don't take product that I didn't order.
Have you seen a drop in customers wanting fuel-thirsty vehicles?
I don't think you're going tell luxury buyers you can't buy your SUV because fuel prices are high. When we settle down, whether it's at $2.50 per gallon or $3 per gallon, the pressure of moving vehicles will settle down.
How important to consumers are safety features?
GM's OnStar is a fantastic selling point for safety benefits. If you have a safety issue or problem, you'll have help immediately. It is even helpful for navigation. Safety is critical today. Sometimes I think we might be safer in our cars than we are in our homes.
How does Cadillac handle local marketing? Are dealers satisfied that it is fair and effective?
We can make great improvements in that area with the repricing of product. We can price our product in our market based on which specific metro we're in and what needs to be marketed at that point or location.
As we look at our new marketing co-ops and local marketing groups, we can be a little more tailor-made to the specific market and what we want to market in that metro.
That was something that we didn't have in years past, (and) that will be a big plus for us. Individual dealers can use their LMG and co-op for their specific market. That's something that's new for 2006.
Does Cadillac's advertising work?
The advertising is all driven through the creative. We have some great creative out there.
Now it comes down to great execution in the showroom. We've got to have the premium focus as much as Jim Taylor and his group on the manufacturing side so that customers feel it, taste it and sense it and enjoy it, and they'll buy our products.