GM has reduced its Buick dealership network by half through buyouts.

• The number of Buick dealerships in the U.S. has been reduced by half through a voluntary buyout program initiated by General Motors.
• According to Duncan Aldred, global head of GM's Buick and GMC brands, the 1,000-store reduction aims to boost throughput and profits at the remaining stores.
• GM will continue to offer buyouts, which have cost the company about $1 billion so far, into next year.

Through a voluntary buyout program, Buick dealerships in the U.S. have been reduced by half, according to an executive who spoke to CNBC.

Duncan Aldred, global head of GM's Buick and GMC brands, stated that the 1,000-store reduction aims to increase sales per location, profits, and throughput at the remaining dealers. Additionally, the buyouts provide an opportunity for dealers who do not wish to invest in electric vehicles to exit the business.

"We have tripled the throughput of the remaining dealers thanks to this, and I am thrilled with the accomplishment," Aldred stated during an online interview.

Buick will continue to offer buyouts, which have cost GM $1 billion so far, into next year. Despite this, the average sales of the remaining Buick stores still lag behind those of GM's GMC brand, which shares showrooms with Buick, according to Aldred.

The buyouts of dealers who took payments from Buick were mostly small stores, accounting for only 20% of the company's annual sales.

Buick's all-electric vehicle transition in the US began last year with the launch of a voluntary buyout program for its roughly 2,000 franchise dealers.

The EV transition requires dealers to invest in training, tools, and specialized equipment. Buick did not reveal the exact amount of investment needed, stating that specific costs may vary based on the size and scope of the dealership.

Aldred stated that the company must decrease the size of its dealer network, regardless of its all-EV plan, which it still aims to achieve by 2030. However, he emphasized that achieving this goal will largely depend on customer demand and acceptance of EVs in the future, stating, "We will very much play to the market demand."

In the U.S., Buick does not currently provide an electric vehicle (EV) option. Its lineup comprises four gas-powered crossovers and SUVs, with starting prices ranging from approximately $22,400 to $43,900.

In China, the brand provides hybrid vehicles, but Aldred did not disclose whether Buick would offer or import them domestically. Hybrids are gaining popularity as a possible solution for automakers to meet stricter U.S. fuel economy standards, given the slower-than-expected sales of EVs.

Despite the challenges posed by the coronavirus pandemic and supply chain issues, Buick's U.S. sales are recovering. In the third quarter, the brand's sales had increased by 63% compared to the previous year. Although Buick sold fewer than 104,000 vehicles in 2022, this was still an improvement from the pre-coronavirus pandemic levels of around 207,000 vehicles sold in both 2018 and 2019.

Buick's sales are predicted to return to pre-pandemic levels with the release of its new entry-level crossover, the Envista, and an increase in normalizing fleet sales, according to Aldred.