Cadillac is coming off one of its strongest performances in years. Sales of General Motors Co.'s luxury brand rose 35 percent last year to 146,925 -- the fastest growth of any major premium brand.
In 2011, though, dealers must keep the momentum going without immediate help from product launches. The XTS, a front-wheel-drive sedan that will replace the STS and DTS, isn't expected until late in the year. A small sedan, expected to be named the ATS, will be launched in late 2012 or early 2013.
That means Cadillac dealers should focus on improving their stores and customer service in anticipation of a big 2012, says Carl Sewell, Cadillac's representative on GM's National Dealer Council.
Sewell, who runs 11 dealerships in Texas, said Cadillac dealers are still playing a pretty good hand: The SRX finished 2010 as the No. 2 luxury crossover in the United States behind the Lexus RX. Sales of Cadillac's CTS sports sedan grew 18 percent last year.
Sewell said dealers are seizing the momentum to position themselves to compete with luxury brands such as Mercedes-Benz. He spoke with Staff Reporter Mike Colias.
Q: How was 2010 for Cadillac dealers?
A: Cadillac is clearly on an upswing. We're excited about our new products, particularly the SRX and the CTS coupe. Sales are up. Cadillac is becoming much more competitive and much more focused on being a true luxury market entry.
What are the biggest issues facing Cadillac dealers this year?
We'd all like for the great new products of 2012 and 2013 and 2014 to be here now. The ATS and the XTS will be significant volume contributors to Cadillac in the future. Escalade and CTS continue to sell well too. That additional volume feels very good.
You mentioned the ATS. How important is a small sedan to Cadillac's overall lineup?
Cadillac is very carefully picking the most important market segments for a luxury brand. The entry luxury segment is very important for us. And XTS in the mid-luxury segment is also important. These represent the highest-volume car segments and should significantly increase our volume. Cadillac seems to be responding extraordinarily well after returning from bankruptcy. The cadence of products will never be as fast as we dealers would like it to be. But when you count the new entries Cadillac will have brought on between 2010 and 2012, and the volume segments they represent, it feels great.
There has been talk of Cadillac developing a flagship sedan. How important is it for dealers to have something to take on Mercedes' S class or BMW's 7 series?
We hope that Cadillac will develop an S-class competitor. We believe that will be very well received on a global basis as well as in the United States. It's particularly important in the Chinese market. There's always a segment of the market that wants the very best.
Does Cadillac have an opportunity with Lexus struggling a bit right now?
I think Cadillac is more focused on Mercedes-Benz as a competitor than it is on any other brand. Mercedes has a long history of quality engineering and design, and it's got global strength. That global reach is critically important because it allows you to spread development costs over higher volumes, and that allows you to be more competitive pricewise and have more segment entries.
Mercedes and BMW are two great examples of that. I don't know how many E-class or C-class vehicles Mercedes sells every year, but I do know that the engineering costs as a percentage of the sale price are greatly reduced.
Cadillac leaders say they've been disciplined on pricing in the past year. What are dealers seeing?
This is a very disciplined leadership group at Cadillac. They have their plan and they are sticking to it. It's exciting to work with them. They are able to receive a lot more financial support from mother GM now that we're focused on four brands as opposed to eight. We're entering segments that we were unable to address in the past because of the financial constraints and the need to spread resources to the other brands.
What do dealers think of GM's relatively new executive team?
I think [former GM CEO] Ed Whitacre set a very positive tone for dealer relations, and that is continuing. Mark Reuss has been an exceptional leader. We all hope Mark Reuss will eventually be our CEO. If you're around that man, he's an excellent leader with great judgment and a world of experience in every sense of the word. He's been all over the world. His racing experience, his experience in Australia and Asia and Europe -- that's all beneficial. And the dinner table at his house had to be an extraordinary opportunity to learn through the perspective that his father [retired GM President Lloyd Reuss] was able to share with him.
You're friends with Ed Whitacre. How does the new team compare with previous ones?
I understand that it's tempting to denigrate previous leadership teams. This team has a better budget and more capability of focusing the energy and resources of General Motors because of the reduction of brands and nameplates. When you add to that the tremendous success GM has had in China, the ability to spread engineering costs across a higher volume, that's very helpful too. That groundwork was laid by previous leadership teams.
What is Cadillac's marketing message?
It's growing and developing. Joel Ewanick [GM global marketing chief] has been a breath of fresh air. I got the chance to spend some time with Pat Fallon [founder of Fallon advertising agency, which won the Cadillac account last year]. He's an impressive man with a great history in the automotive ad world. He's worked on BMW and Porsche. I think he brings a lot to the table.
The council is pleased with what we've seen as we've settled in with Fallon.
Has the Government Motors stigma hurt Cadillac?
I think we need to remember that we supported hundreds of thousands of jobs in the United States. That's important. That has human value. It's not about political rhetoric. It's about taking care of families. Has it hurt sales? I think it's been a concern to some people, yes. I think for other people, they've come back to Cadillac to support their country.
How has Cadillac dealers' service business been? What's the factory doing to help?
It's been excellent. The new included-maintenance program should dramatically increase service business in the future. That starts for the 2011 model year. It should increase service retention and comfort among our customers as to the service and maintenance work that's done on their car. I think it builds comfort in the relationship between the dealership service centers and our customers.
How do you think GM's dealer downsizing turned out? Is the Cadillac number close to the right number now?
Cadillac's dealer network should be more reflective of the Mercedes, BMW and Lexus dealer networks, which are obviously smaller.
What is the dealer council's biggest concern for 2011?
Bring on 2012, because it's going to be a great year. We're all focused on getting our dealerships and staffs in place for a tremendous 2012. And we expect 2011 to be better than 2010. But the real jump will occur in 2012.
There's been a great emphasis on improving the quality of the facilities throughout the dealer organization. It's important and necessary step for us to compete successfully in the luxury market.