Buick Says Fewer Dealers Are Needed to Sell EVs

Image: Buick

Like the much of rest of the auto industry, Buick says the brand will have a full EV lineup by 2030. The models the brand sells won’t be the only thing changing either, as Detroit Free Press reports Buick wants to change the customer experience at the dealer level. And that’s going to involve getting rid of some dealers.

Buick is offering dealers that aren’t on board with the brand’s EV plans a way out in the form of buyouts. Those that stick around and see the plan through, though, will have to make some changes. We’re talking hundreds of thousands — if not millions — of dollars worth of dealer investments in everything from chargers to sales and service training. And there are over 2,000 Buick dealers across the U.S. That’s a lot of dealers that need to change. Unfortunately, many of them might not be needed in the transition.

Speaking with Freep at the Detroit Auto Show, Buick Global VP Duncan Aldred noted that for Buick to take its customer experience to the next level for EVs, there are going to need fewer dealers. He noted other luxury brands with smaller dealer networks that are still selling hundreds of thousands of vehicles a year.

“It’s not a case where ‘Oh we have a master plan and this is what we want.’ We’ll manage what we get. But the reality is — Buick has 2,000 dealers. We do typically 200,000 sales a year. BMW has about 300,000 sales a year and they have about 200 to 300 dealers. Lexus, the same and Mercedes-Benz is the same. Buick has the lowest throughput in the industry,” he said.

If you’re unfamiliar with the term throughput, it’s the number of sales divided by the number of dealerships a brand has. And as Freep pointed out, this is important to automakers and can be important to dealers as well. A smaller dealer footprint means more profit per dealer because each dealer is doing more sales. Divining up sales between thousands of dealers means a smaller sales count and less profit per dealer. This is probably one of the reasons why you’ve never seen a stand-alone Buick dealer.

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Aldred has lofty goals for this dealer plan, surprisingly benchmarking BMW and its dealer network for where he wants Buick to be.

“What I see as an advantage is a dealer network that is within a convenience point for customers in the majority of areas in America and can deliver a consistent and excellent customer experience. That’s what’s an advantage. You benchmark the industry and I think you can draw your own conclusions for that as to how many points you need for how many customers you sell to.”

While not everyone may agree with the EV transition many brands are heading towards, one of the good things about all this is that EVs and Tesla direct sales have made brand executives take a long hard look at how they want to sell vehicles and how they can improve. But can Buick trim over 2,000 dealers down to a few hundred? Aldred admits it won’t be easy, especially for dealers that need to make this decision.

“For a lot of dealers, it’s been a family business through generations. We’re very respectful and conscious of that. Every interaction on this is confidential, so there is confidentiality to be signed by the businesses and then there’s a personal discussion made. It is a timely process to get through 2,000 people.”