Two months ago we informed you that General Motors wanted to close some 400 Cadillac dealers in the United States. The reason for these closures was based on low sales which recorded these centers and low profitability contributed to the brand. However as reported by General Motors and Cadillac less than 20 400 dealers has offered that money for that closed its facilities have been in accordance with the economic offer that has provided them with the brand.
This situation leaves the luxury brand from General Motors in a difficult situation since its distribution network in the United States is oversized for the sales that has and therefore makes the profitability of the brand fall sharply. In addition, many of these centres do not cover the objectives that the brand proposes and they end up becoming a drag on the annual accounts of the company.
Currently, Cadillac has in the United States with 925 dealers. This figure is very high, even subtracting to those who have accepted leave is. In this network 133.235 new vehicles, were sold during the first ten months of this year representing a 5.6 per cent less than in the same period of last year. With these figures the dealer sales ratio is lower than other premium companies which manage like Mercedes-Benz or BMW.
However things could change, as Cadillac is going to launch a new program to provide financial incentives to its distribution network based on the achievement of their objectives of sales. The project Pinnacle will change radically the way in which them dealers official of Cadillac will get their incentives since in he change them main points to meet concerning the previous plan of incentives.
According to Johan Nysschen, President of Cadillac, the project Pinnacle will start the next 1 of April. Its entry in force had that have been the 1 of January of 2017, however by them problems that are taking to close part of its network official is come forced to postpone its entry. However these problems are not going to prevent that Pinnacle is put in place and attain profitability goals announced by the brand in its presentation.