Staff Reporter

Stepping into Lou Ehlers Cadillac in L.A.'s Miracle Mile is like going back in time. Built in the mid-'60s, the showroom features chrome-framed posters, green vinyl chairs and the glassed-in cubicles common to old-fashioned American car dealing.

One day last week, about half a dozen people were seen checking out the gleaming showroom models. Not one of them appeared to be under the age of 50.

And that, for Cadillac, is a problem.

Ehlers is among the top 10 percent of Cadillac dealerships nationwide in sales, but it's faced with a generation gap. The Cadillac brand has failed to make much of a dent in the younger age bracket, and that's something General Motors Corp.'s Cadillac division wants desperately to change.

Cadillac's share of the U.S. luxury car market has been eroding over the past decade. From a market share of 20 percent in 1990, it dropped to 17 percent in 1996 and 1997.

"GM's Cadillac image just hasn't been that appealing to that key segment of the population," said Bob Schnorbus, director of auto analysis for J.D. Power & Associates. "They've struggled to change the image."

GM's response is a sweeping campaign to consolidate non-performing dealers into a small group of large superstores more in tune with the trend in modern car dealing. Cadillac also plans to debut a luxury sports-utility vehicle this fall, and is redoubling efforts to sell its latest sedan, Catera, to younger buyers launching an advertising campaign featuring the tagline, "The Caddy that Zigs."

So far, the latter strategy appears to be working. The Catera was the most successful launch of an entry-level luxury sedan ever, according to Cadillac officials. More than 25,000 Cateras were sold last year, boosting Cadillac's total sales in 1997 to 182,624 units a 7 percent increase over 1996.

But the process of consolidating 1,600 dealerships in the United States, including a few of the 15 in L.A. County, is likely to prove a challenge.

Earlier this month, Cadillac division head John Smith said the company wants to cut its U.S. dealerships by more than half, to about 700. That's because the top 300 dealerships account for about 80 percent of the brand's sales, with the other 1,300 standing largely empty and in need of renovation.

But GM only owns a handful of Cadillac dealers. The difficulty lies in convincing individual dealers either to agree to sell their stores to GM, or close them down and accept part ownership of a superstore that would be jointly owned by a group of dealers.


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