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Why Cadillac is willing to lose 43 percent of its dealers

Cadillac is offering about 400 dealers in the United States a lump sum of money to close down. That represents over 40 percent of Cadillac dealers in America. Offers start at $100,000 and top out at $180,000. The average offering is around $120,000. According to Automotive News, Cadillac chief Johan De Nysschen estimates it will cost the automaker around $50 million to close these dealers. Any dealer that chooses to remain open will have to submit to Cadillac's ambitious Project Pinnacle, which will divide dealers into incentive categories based on how many units they sell. "Every single Cadillac dealer will have the potential to earn significantly higher profits than they do today," says De Nysschen. Dealers have until November 21 to decide if they want to take the cash or submit to Project Pinnacle. A logical question: Why is Cadillac willing to spend $50 million to close down 43 percent of its dealers? First, GM's luxury brand has way more dealerships than it needs. Second, the 400 dealers with offers to shutter each sold 50 or fewer vehicles in 2015, representing just 9 percent of its sales volume in America. So, while closing these smaller dealerships may have a small initial impact on sales, it's not going to be a major hit to Cadillac. Related Video: News Source: Automotive News - sub. req.Image Credit: Gary Cameron / Reuters Cadillac Car Dealers Luxury Performance

Cadillac expects major growth in China

The US sales issues facing Cadillac are not being paralleled in the People's Republic of China, as a new report from Automotive News indicates the US luxury maker should see its sales increase by as much as 40 percent.
The report cites Cadillac's own forecasts, which put its 2014 sales in the PRC at 70,000 units after cresting 45,000 vehicles at the end of August. Provided the sales pace holds true through 2015, the brand would hit its new 100,000-unit sales goal, AN reports.
"We're very optimistic about the luxury market, we believe that the luxury market by 2016 here will become the largest luxury market in the world, surpassing even the size of luxury in Europe," GM China President Matthew Tsien told AN. "With [Cadillac president] Johan [de Nysschen], we have somebody that really is an executive that understands luxury, but he also is very, very keen on understanding what do we need here in China for Cadillac to be successful."

How Cadillac improved power output in 2016 ELR by 25 percent

Earlier this year, Cadillac announced that the 2016 ELR would come with a big price drop and a powertrain that packs 25 percent more power output. That's a lot more oomph, but it didn't sound like the Caddy engineers made any major changes to the engine or motors. So, what happened? Let's refresh our memories with the numeric details. The 2016 car is 1.5 seconds quicker to 60 miles per hour than the 2014 model (there was no 2015), down to 6.4 seconds. The 2014 put out 295 pound-feet of torque. For 2016, it will be 373 lb-ft. The specific breakdown of the various components in the powertrain has not been disclosed, but from what we can tell, the two electric motors and the 1.4-liter inline-four engine in the new ELR are not that much different than those in the old one. Sam Abuelsamid, senior research analyst at Navigant Research (and former writer here at Autoblog) said that any of the unspecified upgrades would be difficult to tell on a part-by-part basis, but the overall effect will be noticeable. "The changes to the ELR as I understand them are analogous to getting more performance out of a 1965 Mustang with the entry version of the 289 cubic-inch V8. You can replace the carburetor with a larger version that enables more air and fuel to flow into the engine, thus producing more power. The basic engine hasn't changed, but power capability is being unleashed by feeding it more." "Cadillac has changed components in the power electronics to enable more current flow into the motor and thus produce more torque. When you do this in the Mustang, you probably need to replace the rear axle gears and use a beefier clutch to transmit the power to the wheels. Similarly, the ELR probably has some upgraded clutches, bearings, and gears to withstand the increased total output." Cadillac spokesperson David Caldwell told AutoblogGreen in an email that the new ELR does indeed have more than just new lines of code. "One could not 'reflash' a previous ELR to get the performance of a 2016," Caldwell said. "If one only changed software you would not get the performance upgrade fully, as the 2016 creates higher current, more power. So these have been upgraded physically – hardware.