General Motors Buick's Big Shake-Up! 1,000 Dealerships Reportedly Reduced As EV Era Approaches

General Motors Company GM has reportedly reduced its Buick dealership network in the U.S. by about half, utilizing a voluntary buyout program.

The reduction of approximately 1,000 stores in General Motors' Buick dealership network is designed to boost sales and profits per location, according to a news report by CNBC, citing a statement from Duncan Aldred, the global head of GM's Buick and GMC brands. 

This initiative also provides an exit opportunity for dealers hesitant to invest in electric vehicles, the report read.

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"What this is enabling us to do that is triple the throughput of the remaining dealers," Aldred told CNBC during an online interview. "I think it's fair to say that I'm really pleased that we achieved it."

Buick intends to extend its buyout program, which has already cost General Motors approximately $1 billion, into the following year, the report read. 

According to Duncan Aldred, sales at the remaining Buick dealerships continue to lag behind those of GM's GMC brand despite often sharing showroom space.

The majority of dealerships participating in the buyout program were smaller-scale operations, accounting for only around 20% of Buick's annual sales. 

In these buyouts, General Motors provided compensation to dealers for discontinuing their operations.

This voluntary program commenced last year among Buick's approximately 2,000 U.S. franchise dealers, coinciding with the brand's commitment to a fully electric vehicle (EV) lineup by 2030.

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For the transition to EVs, dealers are required to invest in specialized training, tools, and equipment. 

Buick has not specified the exact investment amount needed, noting that the costs can vary based on each dealership's size and capabilities.

Currently, Buick has no electric vehicles available in the U.S. market. Its product range includes four gas-powered crossovers and SUVs, with prices starting from approximately $22,400 to $43,900.

Aldred noted that Buick's latest addition, an entry-level small crossover named the Envista, along with stabilized fleet sales, is anticipated to elevate Buick's sales to their pre-pandemic figures, the CNBC report added.

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Price Action: GM shares are trading higher by 0.21% to $35.94 on the last check Wednesday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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