Imagine you are a dealer sitting in a meeting and the head of the brand that you sell tells everyone that sales will get worse before they get better. Well that was what Johan de Nysschen, Cadillac's president told dealers last summer. Now dealers are getting a first look at 'worse' looks like.
Automotive News that a number of dealers have lost on incentive cash in the first quarter because they missed sales targets set by GM. Discounts and lease offers have also dried up as well. Previously, Cadillac offered deals on the ATS and CTS to help remove the massive stock sitting on dealer lots.
This is reflected in Cadillac's sales. ATS dropped 23 percent, while the CTS saw a 47 percent drop. Cadillac's marketing chief Uwe Ellinghaus said in a interview last month that April would be "the first month where we see the natural demand for ATS and CTS."
Now the slump in sales is part of de Nysschen's plan to get Cadillac on the right footing with a smaller supply of vehicle and incentives that are modest. The plan also includes better marketing and new products through 2020.
Dealers support de Nysschen's plan, but they are worried about how long the plan will take and whether it actually works.
"The dealer council has a lot of faith in Johan's long-term plan. But the sales decline is a bit of a tough pill to swallow with the industry rocking right now," said Keith Harvey, a member of Cadillac's National Dealer Council.
Source: Automotive News (Subscription Required)