If you own a new car dealership, preparing to sell electric cars can be an expensive proposition. Service people need to be retrained, new tools and diagnostic equipment need to be purchased, and charging equipment needs to be installed. The cost of all that can range from $200,000 to $500,000 per dealership and not everyone is thrilled about that.
The Buick division of General Motors intends to only manufacture electric cars for its customers beginning in 2030. That’s five years sooner than California’s newly announced prohibition on the sale of cars and light duty trucks with gasoline or diesel engines. Following a policy that began with Cadillac dealers, Buick will offer all of its 2000 dealers in the US the opportunity to opt out of the electric car future. If they choose to accept the offer, they will receive a cash buyout in exchange for giving up their right to sell Buick automobiles, according to the Wall Street Journal.
Global Buick chief Duncan Aldred confirmed in an interview last week that a dealer who takes a buyout would give up the Buick franchise and no longer sell the brand, although nearly all Buick dealers also sell other GM models. “Not everyone necessarily wants to make that journey, depending on where they’re located or the level of expenditure that the transition will demand,” Aldred said. “So if they want to exit the Buick franchise, then we will give them monetary assistance to do so.” He declined to say how many dealers he expects to accept the buyout offer.
GM offered a similar buyout opportunity to its Cadillac dealers last year. Several hundred of them accepted the offer, and today, Cadillac has about 40% fewer dealers than it did in 2018. According to Reuters, GM spent $274 million on the Cadillac dealer buyout program. “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,” a GM spokeswoman told Reuters on September 2.
Buick Seeks An Exceptional Customer Experience
Michelle Malcho, a GM spokesperspon, told the Detroit News, “The shift toward electrification is accelerating here in the U.S. and in markets around the globe. 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 dealers network as a business advantage, and they will remain a critical part of the retail and relationship chain with customers.”
Buick does not offer any battery electric cars in the US but sells four times more cars in China than it does in America at the present time. It did reveal a svelte new Wildcat concept car earlier this year. Going forward, all electric cars from Buick will carry the Electra nameplate, resurrecting a sub-brand from Buick that began in 1959. The name was chosen not to honor the Greek goddess who was the daughter of Agamemnon but rather Texas socialite and sculptor Electra Waggoner Biggs, the sister-in-law of then GM president Harlow H. Curtice. She also gave her name to the Lockheed L-188 Electra airliner.
Buick dealers have complained long and loud that there are too many dealers competing for too few customers. Those who take the buyout offer will stash a pile of cash away, but those who stay the course may be the ultimate winners if the EV revolution is well and truly underway by 2030. Time will tell who has guessed right in the Buick dealer’s sweepstakes.
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