U.S automaker General Motors Co.’s Cadillac brand’s global chief announced it to be readying launch a new electric utility vehicle and nearly 40% fewer U.S. dealers compared to 2018, challenging rival Tesla Inc. and others in the luxury electric vehicle market.
According to Rory Harvey, head of the global Cadillac brand, they have largely completed a restructuring of its U.S. dealer network and by the end of this year expects to have 560 dealers, from about 920 three years ago.
GM mentioned that during 2020 and 2021, they have booked a total of $274 million in costs related to the effort to buy out Cadillac dealers. These dealers in particular were not prepared to invest $200,000 to $500,000 per store in the equipment and training to support its shift to an all-electric vehicle lineup, planned by 2030.
The brand however, will still have more U.S. dealers than other established luxury brands. It has also opened new show-rooms in New York City, Beverly Hills, San Francisco and Atlanta.
Harvey mentioned the brand’s largest market to be China, and there it has not had to restructure retail operations.
In China alone, Cadillac’s sales were up 20% for the first nine months of the year to nearly 181,000 vehicles. While in the United States, the brand’s sales were up 11%, selling around 96,000 vehicles for the year through Sept. 30.
GM Motors rivals, electric vehicle leader Tesla Inc. does not have a franchised dealers and sells cars directly to customers. While other EV startups such as Lucid and Rivian sell their vehicles online.
Harvey mentioned that Cadillac has a virtual showroom called Cadillac Live, and inquiries through the online showroom are currently rising. However, Cadillac plans to continue to sell and service vehicles through dealers.
According to reports, Cadillac starting next summer plans to launch the first of a wave of electric vehicles, this would start with a compact utility vehicle called the Lyriq. The brand has so far received expressions of interest in the Lyriq from around 216,000 people.
Harvey lastly commented that the brand has so far exceeded its expectations.