Caddy begins involving dealers in subscription program

NEW YORK — Cadillac is getting dealers involved with its vehicle subscription service as it prepares to expand the program this year.

The brand, through its Project Pinnacle dealership program, launched a dealer referral initiative March 1 that financially rewards retailers for directing customers to the service, according to Melody Lee, global director of Book by Cadillac. It's the first step in getting dealers involved in supporting the program.

"We don't think this is the end of their involvement," Lee told Automotive News last week during the New York auto show. "We think we can leverage the power of our 900-plus dealers to make Book even more powerful in the future. We've just got to find the right role for them."

It's likely not out of the question that as the service expands, Cadillac dealers could become involved with maintaining and servicing the vehicles, however the company has not announced such plans.

Lee declined to disclose the size of the referral reward, saying it's a "significant amount of money." The company, she said, already has received a "few dozen" referrals.

Will Churchill, chairman of the Cadillac National Dealer Council, said the referral program “was a push” by council to get dealers involved in Book. He said the referral amount is roughly the equivalent of the “front-end gross on a vehicle” for a dealer.

“I think this was a great first effort by Cadillac to be one of the first manufacturers to get the dealer body involved and financially awarded for referring people into the Book program,” he said.

Book launched as a pilot program in New York in March 2017. It expanded to the Los Angeles and Dallas metropolitan areas in November, shortly after Lee was named global director of the program. It also launched a smaller private program in October in Munich.

Lee said Book has "further geographic expansion" plans for this year; however, she did not disclose the proposed locations, which could include international sites.

This year, Lee said, Book started testing a "multicity access" program that allows subscribers to use the service in different cities. She said that program could expand to include all members in the next year.

Churchill said he believes that as the service expands, it would “make sense” to get dealers more involved with Book for servicing and maintaining the vehicles.

“They don’t want to go put in the infrastructure to service these cars, and we already have the infrastructure,” he said. “It makes sense to make us part of that partnership.”

Book is part of Cadillac's aggressive plans to turn the quintessential American brand into a technological leader and global player.

Cadillac President Johan de Nysschen last week said he views vehicle access as a spectrum: At one end is traditional car ownership. At the other is ride-hailing. He has challenged his team to think about ways Cadillac could "own that entire spectrum" and potentially provide a solution for each.

"It's my job to look beyond the horizon," he told Automotive News. "This is a long-cycle business, and we need to make sure that we position Cadillac by what we do today to be in a really strong position into the future."

Cadillac was the first automaker to launch a vehicle subscription service. Others, including Porsche and Volvo, have since started or announced similar programs.

Book gives subscribers on-demand access to Cadillac vehicles for $1,800 a month — up $300 from the initial launch — without the commitment of leasing, financing or purchasing. The cost includes registration, taxes, insurance and maintenance.

Members use a mobile app to reserve vehicles that are delivered to specified locations. They may exchange vehicles up to 18 times a year.

The price increase, Lee said, was a result of Cadillac noting that customers are willing to pay more for the services, and of discussions with dealers who wanted to ensure that the program wouldn't encroach on their conventional model of selling and leasing vehicles.

"Book by Cadillac is only successful if it's complementary to the traditional side of the business," Lee said. "That's the way we see Book."