Buick to offer buyouts to all U.S. dealers

DETROIT — Buick will offer to buy out any of its U.S. dealers who do not want to make the investments necessary as the brand transitions to an all-electric lineup by the end of this decade.

A spokeswoman for the brand confirmed the plan to offer buyouts, which Duncan Aldred, vice president of global Buick and GMC, is outlining to dealers during a virtual meeting Friday. The Wall Street Journal first reported the buyout plan Friday, citing an interview with Aldred.

Buick had 1,963 U.S. dealerships at the start of 2022, according to Automotive News' Dealer Census. Only 13 of those were standalone stores — the majority have dual showrooms with GMC — so virtually all dealers who take a buyout likely would continue with other General Motors brands.

"Not everyone necessarily wants to make that journey, depending on where they're located or the level of expenditure that the transition will demand," Aldred told the Journal. "So if they want to exit the Buick franchise, then we will give them monetary assistance to do so."

Buick does not plan to introduce any new internal combustion vehicles after 2024, when its first full-electric vehicle is scheduled to arrive. The brand is reviving the Electra name for the planned EV lineup in combination with an alphanumeric code to distinguish the various models.

Bo Mandal, chairman of the Buick-GMC National Dealer Council, said Buick leaders presented the program to dealer council members a couple of weeks ago in a meeting. Support among the dealer council was “unanimous,” he said, after members vetted the buyout initiative with brand executives.
 
“When they talked about the Buick initiative, we were clear on one thing: No. 1, it’s absolutely, 100 percent, dealer choice and it’s voluntary,” said Mandal, who as CEO of Mandal Automotive Group in Biloxi, Miss., has one Buick-GMC dealership in his portfolio. “We would not have ever supported an agenda on this Buick initiative any other way. And to be completely transparent, they didn’t present it in any other way, so we were very thankful for that.”
 
Mandal said Friday’s meeting was the first time the entire Buick dealer network learned of the plans. Buick leaders have not yet shared details about the amount of investment that will be required of dealers who choose to transition to an all-EV lineup, he said, nor of the amount of the buyout that will be offered to dealers who choose to exit the Buick franchise.
 
He said Buick has not shared any specific targets for the number of franchised dealerships it aims to have in the future, adding: “I don’t really think they have one in mind.”
 
“If you want to be a dealer for the next 100 years, then you can be a dealer for the next 100 years,” Mandal said. “If you don’t think you want to be a dealer in Buick’s future, then you don’t have to.”
 

The Buick buyouts come after GM used a similar approach to eliminate about one-third of its nearly 900 U.S. Cadillac dealerships since 2020. The Cadillac offers generally were in the range of $300,000 to $500,000.

Cadillac, like Buick, plans to stop selling gasoline-powered vehicles by 2030. GM is requiring Cadillac dealerships that stayed with the brand to invest an average of $200,000 on chargers, tooling and training for EVs.

Aldred said in December 2020 that GM would not offer to buy out GMC dealers who weren't interested in selling EVs. GMC started selling its first EV, the Hummer pickup, in December 2021.

Buick was the only one of GM's four U.S. brands to achieve a sales increase in the automaker's home country last year. It sold 179,799 vehicles, a 10 percent increase from 2020. But the brand's U.S. sales plunged 57 percent to 48,075 in the first half of 2022.