Cadillac Offers To Buy Out 400 Of Its Smallest U.S. Dealerships

Chris K Leslie

I can't help but think this is the start of something very big. 

 

 

Cadillac is offering to buy out 400 of its smallest U.S. dealerships for between $100,000 and $180,000, according to a report by Automotive News.

The decision to offer buyouts comes amid concerns from some dealers about Project Pinnacle, a set of new pricing initiatives set to take place next year as part of Cadillac President Johan de Nysschen’s plan to overhaul the brand. The program has also generated complaints from some dealer associations, such as the California New Car Dealers Association, which sent a letter to GM CEO Mary Barra saying it is concerned Project Pinnacle might violate California law, while challenging Cadillac’s claim that the program is voluntary.

http://www.drivingsales.com/news/cadillac-offers-to-buy-out-400-of-its-smallest-u-s-dealerships/

 

Bob Parrish

I agree.  This could develop into an entirely new business model for GM.  Super stores with outlying service centers.  I wonder if that would reduce the cost to the consumer?

mark rask

Sounds like they are going to split off

Troy Campbell

Yes I agree. What if the OEM's are moving toward the model of all the start ups (that currently deal with used vehicles and are licensed in every state) that that are delivering the vehicle to the consumers home with all the no risk guarantees and also taking the customers car on trade by sending out their inspectors. Seems like perhaps a long shot but  maybe doable. Just look at the Tesla statement from their mission statement from their website.

1. Make things.

2. Sell those things directly to consumers in stores owned and operated by Tesla

I think the best protection for the franchise dealers is lobbying your state to restrict the manufacture from direct sales to consumers as some state have done to stop Tesla direct sales to consumers. 

 

  

Bob Parrish

Tesla is very new to the automotive scene and their business model for selling works in part because of the niche aspect of their product and their newness. 

I'm sure that the rest of the industry would love to offer some version of the Tesla model, but as you inferred, they would run up against all sorts of political opposition. 

The next 5-10 years will be very interesting.

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