The changes with respect to car dealerships in the US has been a big story in recent months. There are all kinds of opinions on this, no need for that debate to spill over here. But here are some reflections on this from Cadillac, including some facts that may be surprising:

• Cadillac consistently has benefitted from excellent customer service at our dealerships.  In the latest customer data from J.D. Power, Cadillac rated 4th in Sales Satisfaction, in which owners rate their new-car purchase and service experiences. Business Week’s Annual Customer Service Champs study (www.businessweek.com/go/customer/) rates brands for service across all industries. And for many years Cadillac has rated right up there with brands like Nordstrom, Ritz-Carlton, Lexus and other notable service-oriented brands. And Cadillac has long been known for its loyal owner base, the ultimate compliment on service. This is chiefly the result of a group of terrific dealers – historically and today.

• Keep that in mind when you consider the changes in the US dealership network. Cadillac will undergo a big change in this respect, yes. The number of dealerships in the US will go down significantly.  I’ve heard some folks worry that this could be a detriment to service.  That’s the opposite of what we expect. We believe service will increase in quality. A big part of the criteria for dealerships that remain with Cadillac is their performance on customer service.  The network going forward will largely be comprised of the best dealers, and as noted above, we already had a group of very good dealers by most any measure. Having a smaller network will enable those “best of the best” dealers to perform even better, with less variation across the spectrum.

• Cadillac will still have the largest dealership network in the luxury auto business, by a wide margin. Cadillac will have greatly more locations than Lexus, for instance. And Lexus is currently the biggest-selling luxury brand in the US.  So the geographic “coverage” of the Cadillac dealer network — even in rural areas — will be significantly better than any other luxury brand in the US. 

• Many of the reductions in the Cadillac network are not actually dealership closures – some are re-alignments and reductions of the brands offered at individual locations.  There have been many Cadillac dealerships co-located (or “dual-ed” in industry jargon) with Chevy, Buick, Pontiac, etc.  This will be greatly reduced going forward, and accounts for a big percentage of the changes in the US.  A great many of these GM dealers do a very good job. But the shopping and service requirements in luxury are different than those in the larger, mainstream market.  So Cadillac dealerships going forward are going to be much more concentrated on luxury consumers, and that’s something that should again be a benefit to service quality.