General Motors reveals a plan to cut hundreds of dealers from their brand portfolio. This does not spare Cadillac dealers across the nation especially those in the metros. The Cadillac dealers and other brand distributors will be informed by the end of October 2010, this is also when the most of the dealer agreements will expire.
The decision to slash the Cadillac dealerships comes after studying the position of the brand in the market. Checking the luxury segment of the market, rivals like Lexus, Mercedes-Benz, and BMW are selling more units with fewer dealerships.
GM plans to adapt the strategy of their competition and increase the sales stats. Lexus dealers sold about 1158 cars on average in 2008 with only 226 franchises. Cadillac, on the other hand, has 1400 dealers but a store sold on average only 110 units.
The figures of Cadillac also have similar ratios compared to the dealerships of Mercedes and BMW. Top executives of the brand admit that Cadillac is out of sync in terms of retail in the luxury segment of the car industry.
Most likely, the car manufacturer will demand higher volume of sales from the large dealerships that they have. They believe that will be the key for the survival of the brand and the only way they can cut their operations cost.
The exact number of dealers that will be severed from the system has not been revealed yet. Basing on available industry figures, it seems that Cadillac will need to axe hundreds of dealers to match the performance figures of their rival foreign rivals.
I thought you might want to investigate a situation that has happened to me over the last two weeks. I live in Fredericksburg, VA and purchased a 2005 Cadillac STS. Beautiful, top of the line automobile. I have had it serviced at the local dealer since purchasing the car. Two weeks ago I took the car in for routine maintenance and annual inspection. I was notified that the car had a bad strut, thus I received a rejection sticker. The car is under warranty. In VA, you have two weeks to have your car repaired and re-inspected. The dealer could not give me a date on when my car would be ready, because they would have to order the part. After two weeks and no word from the dealer, I called to find out when I could bring the car in for repair and re-inspection. I was told by the dealer that many of GM’s parts suppliers had folded during the reorganization and there were NO parts for my car!
They could not tell me when the part in question would ever be available again. I explained that I could not drive the car because the strut had been found during the inspection and that the car had to be fixed or it couldn’t be driven. Their reply was that when GM contracted someone to build and test and accept the new parts, they would call me. I reminded them that I was now paying for a car that I couldn’t drive, with no idea (on their part) of when, or if, it would ever be fixed. They told me to talk to the Cadillac East Coast Customer Service representative. I did and their response was that things were tough, and there was basically nothing they could do. When I asked about the warranty that said that temporary loaners would be provided if they couldn’t fix the car. They told me to call the dealer again. I did and they told me that they were not being allowed to give out loaners.
So, I am in a position where I am paying for a car that Cadillac can’t tell me when they are going to be able to fix under warranty. I can’t drive it and it is now my problem, not Cadillac’s.
I called my financial institution, the Navy Federal Credit Union, and told them that they might want to look into this. I would hate for any active duty or retired service member to get a loan on a car whose warranty may be, in fact, worthless. I also told them they may want to talk to the Board of Directors and inform them that GM is not able to back their warranties at this time.
I heard Sean Hannity say that he had just bought a Cadillac Escalade. I hope it doesn’t break down!
It would be interesting if Fox would look into this issue. It is getting no publicity and is another case of the Bailout as it really works. I told Cadillac that I would be writing Fox News about this because the public needs to be informed about the inability of GM/Cadillac to back up their warranties and the problem they are having procuring spare parts. I don’t believe that they thought I was serious. If not Fox, then who will look out for the consumer on this situation?
I am weighing my options, but it appears that suing the Government or Cadillac is out of the question!
Jim Green
Fredericksburg, VA