General Motors in 2022 started offering buyouts to U.S. Buick dealerships unwilling to make hefty investments required for the sale and service of upcoming electric vehicles, and it turns out the offer was popular.
Buick chief Duncan Aldred told Automotive News (subscription required) in an interview published on Wednesday that roughly 1,000 Buick dealerships will remain in the U.S. after 2023, which according to Automotive News' data is approximately 47% less than at the start of the year.
Aldred said the dealerships that have left only represented about 20% of Buick's U.S. sales, and that approximately 89% of the nation's population are still within 25 miles of a Buick dealership.
Aldred didn't mention the size of the buyouts, but a similar plan for Cadillac's dealerships included offers starting from $200,000 and ranging into the seven figures, with the amount varying depending on the performance of the dealership. Roughly one-third of Cadillac's dealerships decided to bail on the brand's electric future.
2023 Buick Electra E5 (China spec)
Many Buick dealerships typically represent additional brands, and those that accepted the buyout may simply choose to focus on their other brands.
Furthermore, some dealerships, especially those in rural areas, likely judged that their future EV sales will be low and therefore wouldn't warrant investing in training, tools, and equipment to support electric vehicles. The investments have averaged between $300,000 and $400,000 for those dealerships opting to stay.
The recent interest rate spike has made sales tougher, and that may have been another reason to bail.
Buick offers some electric vehicles in China, including the Electra E5 shown above, though it doesn't have any available in the U.S. just yet. That will change soon as Buick has confirmed it will have two Ultium-based EVs on sale in the U.S. by the end of 2024, both of them SUVs. Buick's full lineup is expected to consist of EVs as soon as 2030.