Cadillac Delays Controversial Dealer Incentive Program

Cadillac is delaying the rollout of its “Project Pinnacle” dealership incentive program for the second time. The program, which would convert smaller Cadillac dealerships into virtual showrooms, has been pushed back a few months, according to the automaker.

A spokesman for Cadillac confirmed that the delay was intended to “give dealers more time to understand the program and put themselves in position to earn payouts after it starts,” reports The Detroit News. The project was originally scheduled to start in October of this year, before it was pushed back to January and now April.

Project Pinnacle aims to organize dealerships into five tiers. Tier 1 stores, which typically sell many vehicles, receive high incentives if they provide extra features such as concierge sales and service pickups. The lowest-tier stores would no longer sell vehicles on-site, instead showcasing vehicles through virtual touch points. Some dealers think the program is unfair and even claim it’s an attempt for Cadillac to eliminate dealers. Cadillac said last year it has no such plan to cut the number of its stores, even though it has hundreds more dealerships than its rival luxury brands including Audi, BMW, Lexus, and Mercedes. Cadillac President Johan de Nysschen admitted to us last year that Cadillac is “overdealered,” but said the brand can use that to its advantage. “We have a density of market coverage ahead of customers and with better proximity,” he said. “And we can reach into smaller communities where our competitors can’t go.”

Not all Cadillac dealers were obligated to take part in Project Pinnacle. Earlier this year, Cadillac offered 400 of its 925 dealers buyouts of up to $180,000 if they wanted to walk away from their franchises. Dealers had until November 21 to take advantage of the offer, but apparently very few did. Fewer than 5 percent of eligible dealers opted for the buyout, Cadillac says.

Source: The Detroit News

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