Cadillac Project Pinnacle — Cadillac President, Johan de Nysschen, has announced that Project Pinnacle which initially was planned to start in January 2017 will be delayed for three months. So, if everything finally goes as planned, Cadillac’s newest dealer restructuring program will commence in April 2017. This is the second time this program is delayed as it was originally scheduled to be implemented last October.
“Pinnacle’s going to be around for the long-term, so there’s no need to rush it into execution. Adding another three months certainly will not hurt,” de Nysschen told Automotive News.
Cadillac Project Pinnacle Program
Cadillac will use Pinnacle Project to reduce its number of US dealerships significantly. At this time, Cadillac has the most dealerships in the states compared to other luxury brands. But contrary to its immense number of dealerships, Cadillac doesn’t make more sales than its competitors that have smaller numbers of dealerships.
As a part of this project, Cadillac is offering a buyout up to $180,000 for around 400 dealerships that sold less than 50 cars annually. However, up to this time, only around 20 small dealerships have agreed to take the money and sever business ties with Cadillac.
As a matter of fact, many dealers are opposing this Pinnacle Project since it was announced back in September. And, some even have filed formal requests to stop Cadillac from continuing this program. The dealers claim that this program violates franchise law and cruelly gives unfair advantages for big stores.
Despite the oppositions and heavy criticism towards Pinnacle Project, de Nysschen will keep continuing the program. The additional three months before the implementation of the program will allow dealerships that want to stay in business with Cadillac to decide which tiers will be the most suitable for their operations.
As what have been announced by the company before, Pinnacle Project will divide dealerships into five levels according to the dealerships projected yearly sales and services they can promise for the customers. The higher the tier is, the bigger the incentives the dealerships will receive from the company.
While dealerships in the first tier will receive the highest new-car margins, they also have to follow Cadillac’s newer and stricter guidelines regarding sales volume and customer services.
Meanwhile, the dealerships in the lower tier will have to be satisfied with slight margins. Furthermore, low tier dealerships won’t be able to showcase the physical products in their showroom. These dealerships will have to convert into virtual showrooms or only provide services.
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