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Cadillac pushes fancier showrooms to revive its fading luxury image

Views from the LA Auto ShowViews from the LA Auto Show

In trying to revive its luxury image, Cadillac wants dealers to treat customers to luxury before they even get into the car.

The General Motors (GM) subsidiary unveiled plans Thursday to redesign some dealership into boutique-style stores, which could feature more highly trained Cadillac specialists and the types of perks luxury customers expect.

The improvements will be done at the 700 U.S. dealerships that sell Cadillacs in addition to other car brands. They are primarily in smaller cities or more rural markets. The plan does not apply to the 200 standalone U.S. dealerships that only sell Cadillacs.

Impacted dealerships, like nearly all auto dealerships, are independent businesses. Cadillac can’t actually tell them to do anything. The point of this announcement, spokesman David Caldwell said, is to provide a clearer blueprint for how the franchises can provide a top-grade experience for luxury car buyers.

For instance, Caldwell said, Cadillac is encouraging dealerships to build smaller showrooms — with three cars on display instead of 15, for example. The idea is to make showrooms less overwhelming and, as a byproduct, cheaper for dealers.

Smaller dealerships with small showrooms is increasingly popular, especially given the success luxury electric car maker Tesla (TSLA) has had with the model. Tesla showrooms look more like an electronics store than a car dealership, and emphasize customer service. Elon Musk’s company is able to do this partly because all of the dealerships are centrally owned, rather than franchised.

Caldwell said that it’s up to the Cadillac dealerships to decide what “amenities” they want to add. Examples include making sure customers bringing in a car for servicing get a Cadillac as their loaner car. Another idea is installing a plush customer lounge as a waiting area instead of the typical hard chairs and bad coffee.

All of this is part of Cadillac’s push to take back a slice of the luxury market — a high-margin part of the auto industry that has been dominated by the German automakers in recent years. The car maker’s luxury image has been tarnished by a long line of poorly received cars and changing customer tastes. Cadillac President Johan de Nysschen told Fortune last fall that the brand has to reestablish itself with customers, particularly younger car buyers, who don’t associate Cadillac with success and luxury.

“A strong, financially healthy dealer organization is an essential element of Cadillac’s expansion plans,” de Nysschen said in a statement. “The stronger our dealers are, the better our service quality will be. Cadillac is on a journey back to the pinnacle of premium brands, and dealers will contribute every step of the way.”