The Fate of Cadillac

GM has shed a bunch of Cadillac dealers. I believe the state of Iowa only has 2 or 3 left. John McEleney, NADA president lost 2 Cadillac stores. In the past Cadillac dealers stocked a representative sampling of new Caddys and focused on late model pre-owned. Off lease and daily rental Cads made for gross profits much higher than selling new ones.

I suspect that these terminated Cadillac dealers will still want to stock pre-owned Cads but won't be able to buy them at the closed sales. In addition, GM might try to back off their fleet sales to bolster their resale values, which is their stated goal. The big question: Will the executive compensation and bonuses drive restraint or push for volume and market share above all else? The latter is what got them in trouble in the first place. But the bottom line is I suspect we will see Caddy resale prices firm up remarkably, at least for a while.