Cadillac Mulls Tesla-style Virtual Dealerships

Aiming for elite luxury brand experience, but small dealers say they need cars to sell cars.

Cadillac Dealerships
Daniel Acker/Bloomberg via Getty Images

Cadillac President Johan de Nysschen recently spent time publicly gnawing on the quandary of the Escalade, now he’s ruminating on the status quo of the brand’s dealerships, especially the small ones. The bad news is that the Wreath and Crest has 925 showrooms, about thrice the number of BMW and Mercedes stores, selling half the amount of vehicles of those German marques. The good news is that a number of those storefronts are in hamlets where Mercedes and BMW don’t compete. De Nysschen wants those secondary outposts that move less than 50 Cadillacs per year – more than 400 of the 925 shops – to shift to virtual showrooms, adopting concierges and virtual reality while eschewing on-site inventory.

His approach would have salespeople make social calls to potential buyers and together they could explore the brand or a vehicle through touch-screen configurators or virtual reality units. When a customer decided to buy, the chosen vehicle would come from regional inventory.

The brand president worked out the plan with the dealer council; nevertheless, one complication is adopting the approach for the average American car buyer, who likes to see the exact object he’s about to blow tens of thousands of dollars on, and doesn’t want to wait for it. Another is that those small dealers don’t want to be viewed as mere service centers, working on more Cadillacs than they sell.

The idea itself isn’t outrageous, though. Tesla stores have a sample model on display, but ordering a Model S or Model X happens online, with the help of an associate. Audi, de Nysschen’s former employer, has been rolling out its Audi City virtual showrooms over the last four years, where car shoppers can interact with vehicles on wall-sized digital screens. BMW spent $15 million to build a Brand Store in Paris, Mercedes has a Visionary Store in Milan.

Going digital would inject Cadillac into that space, would emphatically distinguish the luxury division from the Chevy, Buick, and GMC sales operations in common showrooms, and in de Nysschen’s words, “do so in a way more aligned with what we think the Cadillac luxury brand experience should be.” But before customers can be sold on the experience, he’s got to sell his dealers on it.