Cadillac Hires BMW’s Creed for Sales Operations — NAIAS

Cadillac Hires BMW’s Creed for Sales Operations — NAIAS

January 10, 2016 — Cadillac announced late Friday that it has hired Dan Creed to replace Jim Bunnell as its vice president of sales operations in the U.S. Creed spent 12 years at BMW and most recently oversaw the German automaker’s 96 dealers in its Eastern Region. The move comes as the North American International Auto Show is set to begin Monday. He replaces Jim Bunnell who is moving into another executive role at General Motors.

It will be a quiet show for Cadillac with no announcements expected. In addition to its entire lineup on hand in Detroit for the auto show, the CT6 flagship sedan that goes on sale in March of this year, following a slight launch delay will also be on display. The automaker will also show the XT5, its cross utility vehicle that’s also slated for showrooms in the first half of 2016.

Cadillac is in the middle of a $3 billion transformation, which includes bringing to market several vehicles that will help it reduce its reliance on the Escalade. Also part of the brand’s makeover was last year’s move to New York along with its plan to become a separate financial division with GM.

Creed comes to Cadillac at a time when the brand is trying to find itself while developing a plan for its more than 900 dealers. U.S. sales in 2015 finished with 175,267, which puts the average monthly sales per dealership at an anemic 15.7 units. An analysis in late 2014 by The Banks Report, showed that approximately 40% of Cadillac’s sales are generated by its top 100 dealerships. That leaves more than 800 stores selling about 10 units a month.

Although sales in the U.S. were up only 3% in 2015, there are signs that elements of Cadillac head Johan de Nysschen’s to transform the brand is working. He told dealers when he joined Cadillac in 2014 that it would begin cutting inventories to several vehicles in an attempt to become profitable. As a result, average transaction prices for Cadillac are up a healthy $7,000. The challenge is that the brand is trying to wean itself off its best seller, the Escalade, primarily because it’s not the vehicle that it wants as its representative moving forward.

Part of Creed’s role will be to help sell a new retail incentive plan being developed for Cadillac dealers as the current Standards Standards for Excellence and Essential Brand Elements programs begin to phase out sometime this year. The new program likely will be less volume focused and more driven by customer experience. But many dealers are wary of any new programs because of de Nysschen’s history with Audi during which a new retail program that he designed “forced” a reduction in the number of Audi dealers in the market.

Last year, Cadillac floated the idea of having boutique dealerships in smaller markets to accommodate its dealers that are in smaller markets — many of which a dualed with other GM brands, a dynamic de Nysschen would like to change. But he will have to tread carefully as dealers will react strongly against any plan that’s perceived to reduce their numbers.

The brand has a long way to go before it hits the target of 300,000 U.S. sales by 2020. The problem is, Cadillac executives two years ago were saying the brand would hit 300,000 sales in 2015 — not even close.

Globally, GM has set a target of 500,000 Cadillac sales along with 10% market share by 2025. Currently, Cadillac holds about a 4% share globally. It finished 2015 with more than 277,000 sales, up 7.5% from 2014. It managed to grow 17% in China in 2015, in what was a difficult market the second half of the year. But it has to do more.

No doubt, doubling sales in four years is an ambitious plan for Cadillac — likely too ambitious.

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