GM's Strategic Pivot, Cuts Buick Dealership Network into Half in Preparation for EV Revolution

Dec 21, 2023 02:32 AM EST

BUICK ANTIQUE CAR DETAIL TAILLIGHT — (Photo : PIXABAY/knollzw)

GM has boldly reshaped its US Buick dealership environment. Through a voluntary buyout program, GM has reduced its Buick dealership network by approximately half, aiming to optimize sales and profitability per location.

The Buyout

In preparation for the impending Electric Vehicle (EV) revolution, General Motors (GM) has strategically restructured its Buick dealership network in the United States. It started slashing it by nearly half through the implementation of a voluntary buyout scheme.

This remarkable move, reducing around 1,000 outlets within GM's Buick dealership network, has been carefully orchestrated to enhance sales and profitability per location, as elucidated in a CNBC report, citing a statement from Duncan Aldred, the global head of GM's Buick and GMC brands.

Duncan Aldred pointed out that despite often sharing showroom space, the sales performance of the remaining Buick dealerships consistently trails behind that of GM's GMC brand. It is noteworthy that the majority of dealerships participating in this buyout program were relatively smaller in scale, collectively accounting for approximately 20% of Buick's annual sales volume.

As shared on Benzinga, General Motors offered dealers pay to close during these buyouts, showing their commitment to this crucial shift to EVs. This voluntary buyout was initiated last year amongst Buick's extensive network of around 2,000 U.S. franchise dealers, perfectly aligning with the brand's ambitious goal of achieving a fully electric vehicle lineup by 2030.

This buyout method provides dealers who are hesitant to invest in electric vehicles an escape strategy, the report says. Duncan Aldred liked the findings since they enhance surviving dealers' throughput. Despite its billion-dollar cost to General Motors, Buick plans to extend its buyout program into the future year.

GM has boldly reshaped its US Buick dealership environment. Through a voluntary buyout program, GM has reduced its Buick dealership network by approximately half, aiming to optimize sales and profitability per location.

In the United States, Buick does not presently provide an electric vehicle (EV). Instead, the brand's product range comprises four gasoline-powered crossovers and SUVs, starting at approximately $22,400 and going up to $43,900.

While Buick offers hybrid vehicles in China, Aldred did not disclose whether the brand intends to introduce or import such vehicles to the domestic market.

About Buick

According to Consumer Reports, General Motors, a U.S. brand owns Buick along with Chevrolet, Cadillac, and GMC. Furthermore, GMC is a sub-brand of Hummer.

The origins of the Buick brand date back to 1899 when David Dunbar Buick, a modest innovator in the plumbing field, made the transition into the automotive realm. Buick's initial ventures in the automobile industry encountered significant challenges.

However, with crucial financial support from individuals such as William Durant, Buick eventually established itself in this new industry.

As shared on CNBC News, US Buick sales are recovering following the COVID-19 outbreak and supply chain issues. The brand's third-quarter sales rose 63% over the previous year's slow numbers. Buick sold less than 104,000 automobiles in 2022, down from 207,000 in 2018 and 2019.

Aldred, expects the Envista, a compact entry-level crossover, and fleet sales to boost Buick sales to pre-pandemic levels.