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GM proposes to buy Buick dealership franchise

General Motors will offer buyouts to U.S. Buick dealers on behalf of franchise owners who are unwilling to make the investment required when the brand goes all-electric, executives said.

Global Buick chief Duncan Aldred confirmed in an interview that all of Buick’s approximately 2,000 U.S. franchise dealers will be given the buyout opportunity. A dealer doing a buyout will abandon the Buick franchise and no longer sell the brand, but almost every Buick dealer sells other his GM models as well. Aldred is expected to outline the plan at a virtual dealer meeting on Friday.

GM announced in June that Buick will transition to selling only electric vehicles by 2030. Aldred said that would require significant investment in charging stations and store upgrades, as well as changes in how dealers do business.

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“Depending on where they are or the level of spending required to make the transition, not everyone will necessarily want to make that journey,” he said. If you want to withdraw, we will provide financial support for that.”

Aldred declined to say how many dealers he expects to accept buyout offers. GM’s Cadillac A similar program completed last year at his brand phased out hundreds of Cadillac’s U.S. franchise his dealers.

Nearly all Buick dealers own at least one of GM’s other three brands, most notably GMC. Aldred said most dealers that do buyouts will likely not stock Buicks and will continue to operate stores while selling one or more of the other three GM brands.

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The move signals a changing landscape for auto dealers as automakers race to place plug-in cars in their showrooms.

Many automakers are asking dealers to retrofit expensive stores to accommodate the charging stations and special equipment needed to service their EVs. According to dealers, facility improvements that require more power to the building could cost an investment of $300,000 or more.

Traditional automakers are also using the early-stage EV transition to change long-standing operating standards in U.S. dealerships. These changes are aimed at providing a retail experience similar to Tesla and other emerging EV makers, which often do not use franchised dealers to manage pricing and customer interactions.

GM’s acquisition of Cadillac, which began in 2020 and completed last year, has cut the luxury brand’s U.S. dealer network by about a third to about 575 franchises, the company said. GM says it has spent about $275 million on activities related to that program.

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Ford and GM recently unveiled their first electric pickup trucks.

Buick and Cadillac both plan to sell electric vehicles only by 2030, GM said. Buick doesn’t currently sell his EVs in the US, but plans for a new battery-powered SUV for him in 2024, marking the beginning of a full switch to electric models. The company said other changes, such as a new logo and marketing campaigns, will also coincide with the transition.

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Buick’s US market share has been stable in recent years, around 1.2%, but has almost halved since 2000, according to data from research firm Motor Intelligence. The brand has long ranked lowest in sales per store across the industry, and over the years some dealers have complained that there are too many Buick stores.

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Buick is the strongest in China, selling more than four times as many vehicles as in the United States.

Buick’s electrification push is part of GM’s commitment to electrify nearly all of its global vehicle lineup by 2035. GM, like many automakers, is spending tens of billions of dollars on this switch. It opened in Ohio this week. Additionally, he has three US cell factories under construction or in the planning stages.

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