Cadillac News: Cadillac's President Talks About Virtual Stores To Their Smallest Dealers

[William Maley]

Cadillac president Johan de Nysschen is trying to sell Cadillac's lowest-volume dealers (selling 50 or less models in a year) on transitioning to a virtual showroom.

 

Automotive News says de Nysschen outlined this concept to dealers last week during national brand meetings in Southern California. The concept involves a dealer going to a concierge-style approach where salespeople would visit prospective buyers either at home or work, equipped with a touchscreen device with vehicle configuration or virtual-reality units. Dealers who go with this concept will also not stock Cadillac vehicles. Instead, orders would be coming from regional inventory center.

 

de Nysschen has expressed concern for dealers that have Cadillac in the same showroom as one of the other GM brands (most of the low volume Cadillac dealers), saying he'll have trouble tolerating dealers "selling Cadillac out the back door of a Chevy store" last year.

 

But de Nysschen also sees an advantage in having a sales and service footprint that covers America's smaller towns - an area that many of Cadillac's competitors don't exist in. Going with the virtual dealer concept, de Nysschen believes Cadillac can retain that point and give dealers the relief of not having to stock a small number of vehicles on their lot.

 

"We want to work with those small dealers to give Cadillac a competitive advantage in terms of reach into their local communities, but do so in a way that's more closely aligned with what we think the Cadillac luxury brand experience should be," said de Nysschen to Automotive News.

 

It's a way to "immerse customers in a virtual brand experience, so that our dealers need not concern themselves with investing in showrooms and brand-element requirements, which clearly are cumbersome if you're such a small dealer."

 

But dealers are worried about the virtual showroom concept as it would basically become a service center for Cadillacs that might sell a new vehicle once in a blue moon.

 

"How does having fewer Cadillacs on display at dealerships in all of these communities help sales?" asked Byron Hansen, owner of Hansen Motor Co. in Brigham City, Utah.

 

"It makes you wonder what they're trying to accomplish."

 

Source: Automotive News (Subscription Required)

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[David]

Interesting, this makes me think of a hybrid approach to how Tesla has been selling.

 

For major towns, I would say no this does not need to be done even if they do sell only 50 a year, this could be optional for a dealer. They could stay with having the inventory on hand or go virtual. 

 

For small towns where you might only find a FORD, Dodge/RAM and Chevy Dealership, I can see this being an option for the few people that want a luxury auto.

 

It does make one wonder if OEMs are not trying to find a way to get rid of dealers that are not financially self supporting.

 

So could we end up with a Cadillac Kiosk at our local small town strip mall then? Possible that a person could go into business as a sellar of Cadillac from their Kiosk and never have to deal with inventory or repairs as they would direct the buyer to their local GM dealer. Some interesting ideas around this.

 

Would the next logical step then be to allow orders via the Cadillac web site and you pick up your auto at the closest GM dealer unless you pay to have it delivered to your house. The dealer who makes money is the one that does the prep work for delivery and then any repairs afterwards.

 

This will be interesting to watch.

[smk4565]

Bad idea.

 

First off, why are there dealers selling less 50 cars per year, the tis less than one per week.  Secondly, the "virtual showroom" is basically like what you get on the Cadillac website right?  A vehicle configurator tool?  And third, who wants to buy a car they never drove?  I don't see how Cadillac's big claim is that they have better chassis dynamics and handling than the Germans, but then don't have the customer drive it.

[William Maley]

Bad idea.

 

First off, why are there dealers selling less 50 cars per year, the tis less than one per week. 

 

From the story,

 

 

"..Cadillac in the same showroom as one of the other GM brands (most of the low volume Cadillac dealers)."

Most of these dealers are in small towns of America and have most of the GM brands in one dealer. They might not sell a lot of Cadillacs, but they do move a lot of the other brands.

 

 

who wants to buy a car they never drove?  I don't see how Cadillac's big claim is that they have better chassis dynamics and handling than the Germans, but then don't have the customer drive it.

 

I have to agree with you on this point. If a customer wants to try out the vehicle, it would be nice to have a couple of demo vehicles that you can use along with this showroom idea.

[David]

Bad idea.

 

First off, why are there dealers selling less 50 cars per year, the tis less than one per week.  Secondly, the "virtual showroom" is basically like what you get on the Cadillac website right?  A vehicle configurator tool?  And third, who wants to buy a car they never drove?  I don't see how Cadillac's big claim is that they have better chassis dynamics and handling than the Germans, but then don't have the customer drive it.

 

While you might want to test drive a car, todays Millennials for the most part buy online and go from there. This is part of a growing trend as shown in the reduced sales from retail over the last 5 years and increase in online driving. Many Millennials that I work with trust the reviews and buy.

 

I for one am like you, I want to test drive and check it out all over to make sure it is what I want. 

 

Yet there is a place for a virtual showroom. Tesla has shown that this can be done with their purchase

[smk4565]

Today's millenials are not buying Cadillacs, they aren't even buying cars.

 

And I know there are Chevy dealerships with a Cadillac franchise also to sell their 3 cars a month, but I question why you even let them keep those.

 

The only way this virtual showroom could make sense is selling a car to a current Cadillac owner that is buying the same model.  If your 3 year lease on an XTS is up, selling another in this fashion could work since the car hasn't changed.

[aurora97]

While I see that this may be the direction that car sales are heading, it still seems to me like a desperate move on Cadillac's part.  If you are selling a luxury car, then the dealer should be able to "afford" the "inventory" that is available for people to touch, feel, see, drive, and buy.

[regfootball]

Test drives should be mandatory. People think they know what they want, then they drive it and the bitching starts. Better they find out they dislike it before they buy.

Most still want to test drive. To not have something to drive kills a sale.

All dealers of any brand should have a continuous fleet of demo cars. Not in every config of course. But caddy should always have an ATS 2.0t AWD to test. Chevy should always have a LT of every sedan purely for testing. For the volume stuff basically. Of course volume and Cadillac are conflicting terms.