General Motors (GM) has significantly reduced its Buick dealership network in the U.S. by around half through a voluntary buyout program, according to Duncan Aldred, global head of GM’s Buick and GMC brands. The reduction of 1,000 stores aims to increase sales per location and profits at the remaining dealerships, allowing dealers who don’t want to invest in electric vehicles (EVs) to exit the business.
The buyouts, part of Buick’s transition to exclusively offering all-electric vehicles in the U.S. by 2030, have cost GM approximately $1 billion. The ongoing buyout program, initiated last year, will continue into next year, providing payments for dealers to cease operations. The average sales of remaining stores still lag behind those of GM’s GMC brand.
Most dealers who accepted buyouts were smaller stores, representing only about 20% of Buick’s annual sales. While Buick is working towards its 2030 goal, Aldred stated that the achievement depends on customer demand and acceptance of EVs. The brand currently does not offer EVs in the U.S., and Buick declined to disclose the required investment for the EV transition.
Buick’s U.S. sales have been recovering from the pandemic and supply chain issues, with sales through the third quarter rising by 63% compared to the previous year. The brand’s newest entry, the Envista small entry-level crossover, and a normalization of fleet sales are expected to contribute to boosting Buick’s sales back to pre-pandemic levels. Buick’s goal is to triple the throughput of remaining dealers, focusing on those willing to invest in EVs.
