GM offers franchise purchases to Buick dealers in the US

An executive said General Motors will offer purchases to US Buick dealerships as an alternative to franchisees who don’t want to make the investments that will be required because the brand has become all-electric.

Duncan Aldred, president of Global Buick, confirmed in an interview that nearly all of the 2,000 US Buick dealers will have a takeover opportunity. A dealer who takes a deal will give up the Buick franchise and no longer sell the brand, although nearly all Buick dealers also sell other GM models. Mr Aldred is due to outline the plan during a virtual dealership meeting on Friday.

General Motors said in June that Buick would move to selling electric cars exclusively by 2030. This will require significant investments in charging stations and store upgrades, along with other changes to the way dealers do business, Mr. Aldred said.

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“Not everyone necessarily wants to take that trip, depending on where they are located or the level of spending that the relocation requires,” he said. “So if they want to get out of the Buick franchise, we’ll give them financial assistance to do so.”

Mr. Aldred declined to say how many dealers he expected to accept the offer to buy. Completing a similar program for GM’s Cadillac brand last year has phased out several hundred Cadillac dealerships in the United States.

Nearly all Buick dealers also own at least one of GM’s three other brands, most notably GMC. Mr. Aldred said most dealers who take a buyout will likely continue to operate their stores while selling one or more of GM’s three other brands, without stocking Buicks.

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GM General Motors Corporation 38.47 -0.09 -0.23%

The move signals the changing landscape for car dealers as automakers race to fill their showrooms with electric vehicles.

Many automakers require dealers to make expensive in-store renovations to accommodate charging stations and special equipment needed to service electric vehicles. Traders said that facility improvements, which sometimes require piping more electricity into the building, can add up to more than $300,000 in investment costs.

Traditional automakers are also using the transition to EV to change some of the long-running operating standards at US dealerships. These changes are often intended to offer a retail experience similar to that of Tesla Inc. and other startup EV makers, who don’t use franchise dealers and control pricing and customer interactions.

The company said the Cadillac purchase from General Motors, which began in 2020 and ended last year, has reduced the luxury brand’s US dealer network by about a third, to about 575 franchises. GM said it has spent about $275 million on activities related to this program.

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F Ford Motor Company 15.16 -0.03 -0.20%
TSLA Tesla Corporation 270.21 -6.95 -2.51%

Ford and General Motors recently introduced their first electric pickup trucks.

General Motors said Buick and Cadillac plan to sell electric cars only by 2030. Buick doesn’t sell any electric cars today in the US but is planning a new battery-powered SUV sometime in 2024, which would mark the beginning of the full shift to electric models. The company said other changes will coincide with the move, including a new logo and marketing campaign.

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Buick’s US market share has held steady in recent years, around 1.2%, but has shrunk by about half since 2000, according to data from research firm Motor Intelligence. The brand has always ranked near the bottom of every store sales benchmarks in the industry, and some merchants have complained over the years that there are too many Buick stores.

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Buick’s electric propulsion is part of GM’s efforts to convert nearly all of its global vehicle lineup to electric vehicles by 2035. Like many automakers, GM is spending tens of billions of dollars on the converter, including a new battery cell plant that opened this week in New York. Ohio. Three more US cell plants are being built or in the planning stage.

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