Cadillac projects record global sales in 2018
DETROIT -- Project Pinnacle, Cadillac's overhaul of dealership operations, is working as designed and is expected to help the brand reach record global sales in 2018, according to brand President Johan de Nysschen.
Cadillac's global sales last year were the second-best in its 115-year history. However, domestic sales declined 8 percent during the first iteration of Project Pinnacle in 2017.
The program, which has been revised several times before and since its April launch, has been a contentious issue between Cadillac and many of its dealers -- particularly those with smaller franchises who felt they were being belittled or pushed out of the network .
"At the end of the day, Project Pinnacle is doing as it has been set up to do," de Nysschen said Tuesday during the Automotive World Congress. "Many of our dealers who have embraced the program are delivering an elevated customer experience and seeing the commensurable financial returns."
De Nysschen's comments come as the brand begins the first full sales year of Project Pinnacle. Under the latest modification, the program will weigh customer-satisfaction scores and compliance with brand standards more heavily than sales volumes as "many" dealers have fallen short of their targets.
"The success in the near term is about more than just sales charts," de Nysschen said.
"2017 was a challenging year for the entire U.S. luxury market," he added, citing record levels of incentive spending in the luxury segment.
Cadillac, according to de Nysschen, expects similar challenges this year, until it launches the long-awaited XT4 compact crossover in the fourth quarter -- the first of a slate of new products rolling out through 2021, which GM expects to double Cadillac's profits.
The XT4 is expected to be followed by a three-row crossover and a CT5 sedan that is anticipated to eventually replace the ATS, CTS and XTS. de Nysschen said the small crossover will "trigger the most comprehensive produce offensive in the history of this brand."
By 2022, Cadillac is expected to have four crossovers and only three sedans, plus the next-generation Escalade SUV.
De Nysschen reiterated that the quintessential American brand's growth in China -- its top market for the first time ever in 2017 -- is "fueling" the brand's efforts in the U.S., including brand building to address "legacy issues" of consumers buying Cadillacs based on "the strength of the deals" and not the brand or its products.
"This is a difficult cycle to break," he said, adding that the business practices over time eroded brand perception, dealer profitability and obstructed efforts to deliver compelling products -- all things Project Pinnacle aims to reverse.
Other topics addressed by de Nysschen at the Automotive News World Congress include:
Chief marketing officer search: Cadillac is down to its "final candidates list" to succeed former Cadillac Chief Marketing Officer Uwe Ellinghaus, who resigned at the end of 2017. De Nysschen said there are both internal and external candidates being considered for the position.
He said he does not expect a "vast course change" in its messaging once someone is hired, but it would "be naive" to think that there won't be some "fine tuning."
Technology: Cadillac will "revisit" using new technologies to enhance the dealership experience, likely referring to the use of virtual reality machines and virtual showrooms that Cadillac backed away from as being mandatory for small dealers under Project Pinnacle.
Dealer count: Project Pinnacle does not aim to reduce the count of its dealership network, a main concern for many dealers when the program was first being discussed and launched, according to De Nysschen. He said he expects Cadillac's network of 924 dealers to be around the same level in five years.
EVs: Cadillac is "accelerating" the rollout of its EVs amid support from the Chinese government for all-electric vehicles as well as GM's overall strategy to launch at least 20 new EVs or fuel cell vehicles by 2023.
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