Almost every one of Cadillac’s 925 dealerships in the U.S. signed up for their incentive program, Project Pinnacle. The program gives brand chief Johan de Nysschen authorization to revamp the retail network.
Cadillac’s vice president of sales operations Dan Creed, says dealers representing 98.7 percent of retail volume submit enrollment by the Sept. 30 deadline. The program changes the way dealers are paid for achieving sales goals and establishes performance levels. The requirements vary depending on the dealership’s size and begin Jan. 1.
Creed wouldn’t give an amount of how many dealerships didn’t enroll. However, he said they were small stores.
Cadillac had 106,180 units sold in the first nine months of 2016, so the holdouts account for 150 vehicles a month.
While the enrollment figure appears as a consensus about the program, it is unknown whether discontent will turn into public reaction if dealerships feel the effect. Trade associations in Ohio, Virginia, California, and other states publicly criticize the program recently.
President of the California New Car Dealers Association, Brian Maas, says dealers feel like they have to sign up to avoid putting their company at a major disadvantage.
Maas compares it to a Soviet election, saying we all have to come and vote but there’s only one candidate.
The program divides dealerships into four levels based on their sales volume. However, dealers can choose to move to a higher tier, with strict standards, to get larger payment incentives. Dealerships selling less than 100 vehicles a year can choose a fifth level with the lowest standards. However, it also stops them from stocking vehicles on site; instead, Tier 5 dealerships would use “virtual showroom” technology to place their orders.
Creed also says some dealerships chose Tier 5, which has an annual enrollment fee of $250. The cost for the other tiers range from around $7,500 to $35,000.
He said over half of those enrolled chose to move to a higher tier.