LOS ANGELES – In October, Cadillac announced it was moving into the ultra-luxury segment with the launch of the Celestiq battery-electric vehicle. General Motors sees the Celestiq competing with brands such as Rolls-Royce.
In a press release, Rory Harvey, global vice president of the Cadillac brand, lauds the Celestiq’s technology as the “most advanced and innovative” that Cadillac has ever engineered.
Advanced technology is a given in a car that will set a buyer back more than $300,000. Celestiq’s success also will require both a big investment in customer experience by Cadillac dealers and an evolution of consumers’ view of the brand.
“For the car to be taken seriously, the customer experience has to be out of this world,” Ed Kim, president and chief analyst at consultancy AutoPacific, tells Wards. “They are going to need serious upgrades, both in facilities as well as in dealership staff.”
Cadillac also needs to upgrade its overall image, something it hopes the Celestiq will accomplish: The 5-door liftback will be hand-built starting in December 2023. Available by reservation only, GM opened its order bank in October.
There is a problem with perception,” Cherie Watters, executive director of automotive operations at Sunroad Enterprises, a San Diego-based group whose businesses include dealerships, tells Wards. “There is a difference between premium and luxury.”
Rolls-Royce has years and years of exceptional service and heritage, says Watters, who previously was chief operating officer of O’Gara Coach, a Los Angeles-based dealership group of ultra-luxury franchises including Rolls-Royce, Bugatti, Lamborghini, Bentley, McLaren and Rimac.
“There is no luxury without service,” says Watters. “Luxury is rare and hard to acquire.”
In its June 2022 report The Luxury Car Market: Five New Industry Trends, consultancy McKinsey notes: “Conditioned by their exposure to luxury-goods experiences in other retail environments, affluent consumers today seek continual engagement and personalized experiences when shopping for luxury cars.”
In the ultra-luxury segment, that can include having dinner with various clients up to five nights a week, Jennifer Stroup, brand manager at Rolls-Royce of Beverly Hills, an O’Gara Coach dealership and the largest Rolls dealership in the U.S., tells Wards. “I am more a friend of the family than a salesperson.”
She adds, “I don’t sell anything that anybody needs.”
Stroup will handle sales for the Rolls-Royce Spectre, the brand’s first fully electric model. The Spectre was introduced in mid-October, but special Rolls Royce customers, known as Luminary clients, got a sneak preview. In July, Stroup took a group of 11 such VIP clients – who have bought multiple Rolls-Royces – and their plus-ones to visit the factory in Goodwood, England. They viewed the Spectre and the new Phantom. (Luminary clients got a glimpse of the Spectre at a March dealers’ conference, as well.)
The clients paid for their flights; O’Gara paid for a hotel in London and dinner at Annabel’s, an exclusive dinner club. Rolls-Royce picked each couple up in London for a tour of the factory.
Back at the dealership in Beverly Hills, clients can relax in the commissioning suite and configure their new Rolls on a big-screen TV. For more bespoke personalization, O’Gara goes through a special Rolls-Royce department. Of course, not all clients want to spend their time in a commissioning suite. “We gauge the customer. Some people want to be there for five minutes,” says Stroup.
Cadillac says Celestiq clients will work with a Cadillac dealer in collaboration with a one-on-one concierge and will have access to a Cadillac designer and exclusive services. “Each client will experience a personalized journey to make their vehicle exactly the way they desire,” Harvey says in the press release.
GM won’t comment on how much its dealers will need to invest in creating that kind of “personalized journey,” saying details have not been finalized.
But an ultra-luxury experience doesn’t come cheaply, especially with electric vehicles, says Watters. Electrification is where many manufacturers are looking to “reset” the dealer experience, she says.
Cadillac already is using investment in electrification as a strategy to cull its dealership count. Starting in 2020, it offered buyouts to dealers who didn’t want to invest $200,000 or more for the chargers, tooling and training to sell EVs. Cadillac currently has 565 dealers in the U.S., down from 878 in 2020.
Now, many dealers will need to invest in more dealership upgrades, including design centers with a configurator room and a place for clients to “hang out,” says Watters.
Vehicle charging for ultra-luxury clients will need to be exclusive. Customer service will be key. For example, all the chargers must work all the time. And they will need to be fast chargers.
Cadillac should be benchmarking the retail and purchase experience of other ultra-luxury brands at every touchpoint, says AutoPacfic’s Kim.
“They need to exceed that because they are the challenger,” he says. “Cadillac stores might well be a Mitsubishi store relative to where these ultra-luxury stores are today.”