Nearly half of Buick dealers take buyout rather than sell EVs

Nearly half of Buick's U.S. dealerships left the brand this year after it offered buyouts for those who didn't want to invest in selling electric vehicles.

The General Motors brand on Tuesday said it will end the year with about 1,000 dealerships nationwide, 47 percent fewer than at the start of 2023. Buick offered to buy out retailers who did not want to invest hundreds of thousands of dollars on tooling, equipment and training to prepare to sell and service EVs as the brand goes all-electric by the end of the decade.

Buick had 1,958 U.S. franchises at the start of this year, according to Automotive News' annual dealer census.

The buyouts were offered on a voluntary basis and in consultation with dealers, said Duncan Aldred, vice president of global Buick-GMC. The program remains open and will "continue to be done in a voluntary and consultive way" should additional dealers choose to give up their franchise.

"I'm really pleased with where we are," Aldred told Automotive News. "The network, where we are now, is a good size. It's with dealers who are focused on the business, who've shown that they can recover the volume that the dealers who transitioned away were doing."

The roughly 1,000 dealerships that left the brand this year previously represented about 20 percent of Buick's U.S. sales, Aldred said. Dealer throughput has increased by an average of 300 percent this year, he said, adding that that shows the brand has been able to retain customers. About 89 percent of the nation's population is still within 25 miles of a Buick dealership, according to the brand.

Despite having fewer dealers, Buick said its U.S. sales rose 58 percent year over year through November, with the Encore GX subcompact crossover nearly doubling and the Envision compact crossover up 56 percent. Buick has sold more than 10,500 of its new Envista since it reached dealerships in August.

The Envista, a subcompact crossover, is Buick's last new internal combustion vehicle. The brand plans to show its first EV in 2024. All future new nameplates will be electric, using the Electra naming convention and an alphanumeric.

EV investments for dealers who stayed with the brand will average $300,000 to $400,000, though the amount can vary based on individual dealership needs, Buick has said.

Cadillac, which also plans to be all-electric by 2030, offered similar buyouts to its dealerships. Roughly a third of Cadillac's nearly 900 U.S. dealerships accepted offers that generally ranged from $300,000 to $500,000. Cadillac dealerships will be required to invest an average of $200,000 to prepare to sell and service EVs.

Bo Mandal, chairman of the Buick-GMC National Dealer Council, said some dealers who chose to give up their Buick franchise wanted to focus on other parts of their business, including other GM brands. Some, for instance, may have been in stronger truck markets and opted to concentrate on GMC.

Mandal, CEO of Mandal Automotive Group in Biloxi, Miss., said Buick's dealer council made clear it would support the initiative only if dealers were able to make that choice about their own businesses, and that Buick leaders have been transparent about the process.

"I've had zero negative feedback, if that tells you anything," he said.

"What I love about this whole scenario is it's true entrepreneurship," Mandal added. "You can make and decide your own fate and what you want to do with your own business."