Following the lead of Tesla, Cadillac Dealers in the United States are being asked to consider establishing ‘virtual’ showrooms.
With rapid improvements in virtual reality technology, prospective car buyers will be able to ‘test drive’ a vehicle by putting on a headset. The idea promises to slash overheads and the need for large showrooms filled with cars.
Cadillac president Johan de Nysschen is seeking Dealers willing to commit to the idea. Customers could test other products via the headsets and have their cars serviced, but would not be able to drive away in a new car because there will not be any onsite.
Cadillac is the luxury division of General Motors. It currently has about three times as many US stores as its German rivals or Lexus, yet sells only about half the cars.
Cadillac CEO Mary Barra hired Mr de Nysschen in 2014, with a brief to turn the battling company around. The virtual dealerships are part of his grand overhaul plan, titled ‘Project Pinnacle’.
Smaller Dealers are concerned the plan could force them out of business. Mr de Nysschen and Cadillac executives have been touring dealerships to assuage fears and assess into which of five tiers of dealers each store fits. Those in tier five, the lowest, have been surveyed about their willingness to convert to virtual showrooms.
Mr de Nysschen also wants to change Dealer compensation qualifications away from number of cars sold, encouraging the adoption of practices of leading luxury brands such as offering free roadside assistance and other benefits.
Cadillac is still researching technologies and developing the concept. It has its supporters, including Will Churchill, owner of Frank Kent Cadillac in Fort Worth, Texas, and head of Cadillac’s dealer council.
“They can still sell the same volume,” he said. “They don’t have to stock the 15 cars and hope they have the right one … the data shows they probably don’t.”