Losing its juice
Car dealers are fleeing the Buick brand amid low sales and an EV reboot
Even as General Motors prepares to roll out electric versions of its Buick vehicles, hundreds of Buick dealerships nationwide, including at least four in Massachusetts, are turning their backs on the storied brand. The move to electric Buicks is one reason so many dealers are giving up their Buick franchises, according to auto industry watchers. They say that smaller, lowvolume Buick dealers either can’t or won’t make the big investments needed to begin selling EVs, especially as sales growth in the sector has cooled and unsold electrics are piling up on dealer lots.
“I think there are dealers who are just not confident in the electric vehicle transition and they don’t want to have to commit to the investment,” said Karl Brauer, executive analyst at online car retailer iSeeCars.com.
Workers at Swanson GMC in Acton, Station GMC in Mansfield, Bill DeLuca Chevrolet-GMC in Haverhill, and Marty’s GMC in Kingston confirmed that their dealerships stopped selling new Buicks in recent months. None of these dealerships responded to requests for further information.
Buick has announced its intention to migrate to an all-electric line of cars by the end of the decade. The brand’s first EV is set to go on sale this year. But getting ready to sell EVs is a costly proposition. Dealers must purchase new equipment to service the cars and must pay for worker retraining. GM estimates that the upfront cost to dealers will range between $200,000 and $400,000.
“If you’re in a market where you’re not selling a lot of Buicks, investing a lot to sell electric Buicks may not make a good business case,” said Mark Schirmer, spokesperson for Cox Automotive, an Atlanta-based automotive marketing company.
But apart from the EV transition, GM needed to shrink its oversized network of Buick dealers. As Brauer pointed out, only 244 US dealers sell Toyota’s luxury Lexus brand, compared to nearly 2,000 Buick dealers before the buyouts. But Lexus sold some 224,000 cars in the first nine months of 2023, compared to Buick’s selling about 124,000 in the same time
frame.
In 2022, GM offered to buy out the franchises of any Buick dealers looking to move on. The company announced last month that 47 percent of dealerships accepted the buyouts. According to a GM spokesperson, the defunct dealerships accounted for just 20 percent of all US Buick sales. The majority of these dealers remain in business, selling other GM brands such as Chevrolet and GMC.
A statement issued by GM said the buyouts will help ensure good service for traditional Buick customers, while dealers prepare for Buick’s transition to an all-electric lineup by 2030. “We need the right partners to drive the brand forward, and this year we’ve given dealers the opportunity to exit voluntarily in a respectful and structured way,” the company said.
Robert O’Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association, said dealers told him that they had promised GM not to discuss details of the buyout. But O’Koniewski said the dealers were satisfied with the settlements.
“The dealers I talked to are very happy,” said O’Koniewski. “They were very fair about it.”
Auto industry watchers say Buick’s retreat is largely driven by the brand’s declining fortunes. The oldest of GM’s brands, Buick was once among the nation’s best-selling vehicles, with over 854,000 sold in 1980. That’s a far cry from the 103,000 Buicks sold in the US in 2022. The company did enjoy a sales surge in 2023, and GM predicts full-year US sales rose 60 percent, the fastest growth of any brand in the US market. But that still won’t match the 207,000 sold in 2019, or the 229,000 sold in 2014.
“It’s not a popular vehicle out here,” said O’Koniewski. “I can go a week without seeing a Buick on the road.”
In fact, O’Koniewski said, “the only reason GM has kept the Buick alive is that it’s popular in China.” That’s Buick’s biggest market by far, thanks to a 50-50 joint venture it launched in 1997 with government-owned SAIC Motor, China’s biggest carmaker. The partnership sold 653,000 Chinese Buicks in 2022. But that’s a big decline from the 926,000 sold in 2020.
Brauer said that Chinese consumers are pulling away from the US brand in favor of Chinese companies like BYD, which passed Tesla in the fourth quarter of 2023 to become the world’s largest maker of electric vehicles.
“It’s getting increasingly hard to sell cars in China if you’re not a Chinese automaker,” said Brauer.
As for Buick’s upcoming EV line, Brauer said the market is already glutted with more electric cars than consumers are willing to buy.
“Each EV brand from Tesla on down is struggling,” said Brauer, who thinks affluent early adopters are already tapped out and mainstream car buyers aren’t interested, at least not yet. “It could be a bump in the road,” he said. “I don’t think it is.”
But marketing rep Schirmer disagreed, saying that demand for electric vehicles remains high.
“We’re expecting the year ahead to be good for EVs with continued strong EV sales growth,” he said. “The growth has slowed some, but it’s still robust.”