In recent months, Buick has said it plans to have a fully electric lineup by 2030, but not everyone selling its brand on board with the transition, especially dealers. Now, according to The Wall Street Journal, GM is giving dealers a way out — offering buyouts to dealers who aren’t feeling the upcoming EV transition.
First a little clarification: This buyout offer was announced over the long Labor Day weekend, and many people misunderstood what GM was offering. Some read into the buyout as a way for Buick and General Motors to bring vehicles “DTC” or direct to consumer, which has similar tones to when Ford mentioned something similar in the form of “abolishing the dealer experience.”
But again, to be clear, DTC is not what’s happening here. I’m not even sure where you thread the connection from EVs and dealer buyouts to direct sales.
Anyways, we’ve seen GM offer similar options to dealers before. In late 2020, it was reported that Cadillac had offered 150 dealers buyout packages ranging from $300,000 – $500,000 to get out of their franchise contracts. The problem? These dealers didn’t want to invest the millions of dollars needed for the brand’s electrification plans. The same thing is happening now with Buick dealers
While Buick and GM officials won’t say how many dealers are taking the buyout packages, Buick brand CEO Duncan Aldred confirmed to the Wall Street Journal that all 2,000 of its dealers here in the U.S. would be given the option if they want it. “Not everyone necessarily wants to make that journey, depending on where they’re located or the level of expenditure that the transition will demand. So if they want to exit the Buick franchise, then we will give them monetary assistance to do so” he told WSJ. It wouldn’t be that much of a loss for the dealers anyway. Nearly every Buick dealer is grouped with other GM divisions.
Looking at this from the dealer perspective, it’s easy to see why some dealers would be reluctant to move forward with the brand’s EV plans, because those plans aren’t exactly clear. Millions of dollars will need to be invested in dealers for electrification: From installing and powering chargers to hiring and training sales and service staff. It’s all a hard ask when the brands plans aren’t clear and are still a few years away. All we’ve gotten from Buick regarding EVs is the Wildcat concept shown this summer and the announcement that the Electra name was coming back for its EVs starting in 2024. Otherwise, it’s been pretty quiet.
What’s an even tougher sale is for dealers to invest for an EV future when GM has shown that the brand’s priority is China, where Buick sells like crazy. Add that the brand has more EVs in the pipeline for China, with Buick planning 12 new models for China by 2025, five of which will be EVs. But in the U.S., there is one lonely EV crossover planned for 2024.
If GM wants more Buick dealers to stay with the brand for its EV plans, they’re going to have to show dealers all of the cards, and prove that the U.S. market is just as important as the China’s.
I reached out to Buick for a little more information regarding what’s needed for dealers to move forward with their EV plans and they had this to say:
The shift toward electrification is accelerating here in the U.S. and in markets around the globe. Buick is transforming to be an all-EV brand by 2030. This forward product offering needs to be combined with an exceptional customer experience. The future dealer requirements are a logical and necessary next step on our path towards electrification to ensure our dealers are prepared to properly sell and service these unique vehicles in order to provide customers an exceptional experience. We see Buick’s dealer network as a business advantage, and they will remain a critical part of the retail and relationship chain with customers.