AmericaAbout 150 dealers, or about 17 percent of Cadillac’s 880 properties, don’t want to invest in upgrades to sell green cars.
The number of dealers above decided to break up with the domestic car brand, instead of spending expensive upgrades. Some close sources also said that some retailers are still skeptical about the switch to battery-powered cars, mainly about the profitability of the new product line.
Recently, parent company General Motors (GM) forced Cadillac dealers to choose: accept to be acquired, that is to withdraw from this brand, or spend about 200,000 USD to upgrade its business, including charging systems as well as repair equipment. All upgrades to support the luxury brand’s electric vehicle sales.
Proposal to buy back is amount of about 300,000 to over a million USD. And 17% of the 880 Cadillac dealers in the US agreed to accept the money.
Most retiring dealers own one or more of the GM brands, such as Chevrolet, Buick and GMC. These dealers can only sell a very small number of Cadillacs a month.
Tesla pioneered the sale of electric cars directly to customers without a franchise system – a model that many startups are pursuing. Traditional carmakers rely mainly on the current dealer system – where they sell internal combustion engines – to sell electric cars.
Dealers across the United States are counting expensive investments, such as electrical system upgrades, which, while uncertain about demand for battery-powered vehicles, now account for only about 2% of federal sales. Some retailers have said that they are trying to delay EV orders, because they are worried that these products will stay in dealers too long.
Another factor that puts pressure on the business is that electric cars have fewer components than those with internal combustion engines, and require less routine maintenance. This has a negative impact on the dealership’s service business and parts sales – an important source of profit.
Cadillac now plays a central role in promoting GM’s electric vehicle lineup. In November, the biggest car company in the United States said it would increase investment in green cars, as well as develop self-driving cars, about 33% more than the original plan, to 27 billion USD by mid-decade. This also accounts for the majority of GM’s spending plan, although electric vehicle sales are now extremely modest across the market.
Cadillac’s first electric vehicle – the Lyriq crossover – is scheduled for spring 2022. The price will be very competitive, even able to match the SUVs with internal combustion engines, a company representative for know.
America – England (according to the Fox Business)