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General Motors has bought up about half of Buick dealers in the U.S. because of their reluctance to sell electric vehicles as the automaker looks to transition to electric vehicles.
About half of GM's 2,000 Buick dealers accepted the voluntary buyout. The program remains open, so more dealers could choose to adopt it rather than make the EV-related investments GM needed to continue selling Buicks, as GM plans for the brand's vehicles to be 100% electric by 2030 will be.
A spokesperson for the company told FOX Business in a statement: “Buick is transforming, launching the best vehicles the brand has ever had and will be the fastest-growing mainstream brand in 2023. This all needs to be supported by the best customer experience in the transition to electric vehicles.”
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GM bought about half of its 2,000 Buick dealers last year under the voluntary buyout program. ((Photo by John Nacion/SOPA Images/LightRocket via Getty Images) / Getty Images)
“As previously mentioned, this year we gave dealers who disagree with Buick’s future the opportunity to voluntarily exit in a respectful and structured manner; with the full support of our National Dealer Council,” the statement continued.
Last year, GM began planning takeover bids for its Buick dealer network after telling dealers to invest at least $300,000 to help sell and service electric vehicles – including initiatives such as installing chargers for electric vehicles and staff training – or, according to a report in the Wall Street Journal, expand the Buick franchise.
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 35.47 | -0.40 | -1.12% |
The company noted in its statement that Buick sales were up nearly 60% this year even as dealer points fell 47%. It added that nearly 90% of the U.S. population lives within about 25 miles of a Buick dealer, so they still have access to parts and service.
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General Motors has stated that its goal for Buick is to produce 100% electric vehicles by 2030. (Bill Pugliano/Getty Images / Getty Images)
Dealers who agreed to the acquisition will no longer sell Buick vehicles, although they can continue to sell vehicles from other brands such as Chevrolet or GMC under the GM umbrella.
GM, which is also Cadillac's parent company, implemented a buyout program for Cadillac dealers in 2020 that reduced the number of dealers in the brand's network by about a third.
Some car dealers have been hesitant to embrace the push toward electric vehicles. A group of over 3,000 dealers sent an open letter to President Joe Biden last month, urging him to “pump the brakes” on electric vehicle regulations given the current relatively weak demand for electric vehicles.
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“These vehicles are ideal for many people and we believe their appeal will increase over time,” the dealers wrote. “However, the reality is that demand for electric vehicles today cannot keep up with the large influx of BEVs.” [battery electric vehicles] Arriving at our dealers due to current regulations. BEVs are piling up on our properties.”
Thomas Catenacci of FOX Business contributed to this report.