Detroit – General Motors The company has cut the size of its Buick dealership network in the U.S. by about half through an ongoing voluntary acquisition program, a senior executive told CNBC.
Duncan Aldred, global head of GM’s Buick and GMC brands, said the goal of reducing the 1,000 stores is to increase sales at each location, throughput and profits for remaining dealers. The acquisition also allows dealers who don’t want to invest in electric vehicles to exit the business.
“This has allowed us to triple the throughput of our remaining dealers,” Aldred said in an online interview. “I think it’s fair to say that I’m really happy that we achieved that. “
Buick plans to continue making acquisitions next year, on which GM has spent about $1 billion so far. Aldred said average sales at remaining stores still lag behind General Motors Co.’s GMC brand, which mostly shares showrooms with Buick.
Most dealers accepting acquisitions These stores are smaller, accounting for only about 20% of Buick’s annual sales. As part of the acquisition, the company paid dealers to cease operations.
A voluntary takeover program for Buick’s approximately 2,000 U.S. franchised dealers was launched last year as the brand begins investing to transition to offering all-electric vehicles exclusively domestically by 2030.
Dealers need to invest in training, tools and special equipment for the EV transition. Buick declined to say how much investment it would require, saying the exact cost could vary based on the size and scope of the dealership.
Duncan Aldred, vice president of sales for General Motors Company Buick-GMC, speaks next to a GMC Sierra Denali HD truck on display during an event in Chula Vista, California, U.S., Tuesday, January 22, 2019.
Sandy Huffaker | Bloomberg via Getty Images
Aldred said the company would need to reduce the size of its dealer network regardless of its all-electric vehicle plans, which he confirmed was still targeting 2030. However, achieving this goal will largely depend on customer demand and acceptance of electric vehicles, he said. In the next few years, “we will pay great attention to market demand.”
Buick does not currently offer electric vehicles in the United States. The brand’s lineup includes four gasoline-powered crossovers and SUVs, with prices starting at approximately $22,400 to $43,900.
The brand offers hybrids in China, but Aldred declined to say whether Buick would offer such models domestically or import them. Hybrids are increasingly seen as a potential way to help automakers meet tougher U.S. fuel economy standards amid slower-than-expected sales of electric vehicles.
Buick’s U.S. sales are recovering from the coronavirus pandemic and supply chain issues. The brand’s third-quarter sales rose 63% from the sluggish level in the same period last year. The brand’s sales in 2022 will be less than 104,000 vehicles. That compares with about 207,000 sales in 2018 and 2019 before the coronavirus pandemic.
Aldred said the brand’s latest offering – a small entry-level crossover called the Envista – and normalization of fleet sales are expected to help push Buick’s sales back to pre-pandemic levels level.
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