General Motors finds itself at a crossroads. The company is transitioning to electric vehicles, cutting models, and introducing new ones. Soon, the Chevrolet brand will be without the Malibu and Camaro, car models that will join the Sonic, Cruze, and Impala as they drive into oblivion.
Chevrolet will survive the transition as will GMC and Cadillac. The automaker has too much invested in these three brands to let them languish. Yet, for a fourth brand, Buick, the future is not assured.
Thinning the Buick Dealer Herd
Indeed, GM is currently allowing U.S. Buick dealers to opt out of required investments to pivot to full electrification. These include funds for repair equipment, charging stations, and supporting technology to handle EVs. With approximately 2,000 Buick dealers in the U.S., it is expected that hundreds will accept GM’s offer instead of making the switch. Like Cadillac, Buick goes full electric by 2030, with the remaining brands following at least five years later.
Buick no longer sells cars, at least not in the United States. In China, where the brand is much more popular – with four times the sales – the product line is broader. Stateside, Buick sells crossover utility vehicles solely. The brand is almost exclusively tied to GMC, therefore there is some overlap in models. If a U.S. Buick dealership takes GM’s cash, they can still sell the other brands.
Pivoting to EVs
Will Buick survive the pivot to EVs? Certainly, we believe so. At least the brand will thrive in China, while the U.S. market remains questionable. Still, as the first Buick EV arrives in 2024, we’ll get a solid idea of where customer interest lies. Importantly, GM will need to differentiate Buick from Chevrolet and Cadillac (as well as GMC) to stoke interest. While sales have held steady these past few years, they’re about half the number the brand enjoyed in 2000.
It is doubtful that every Buick dealer will exit. First, there is enough interest in the brand to keep customers returning. Second, when GM offered Cadillac dealers a similar deal, the company thinned that brand’s dealer ranks by one-third. GM may limit the offer to the first X number of dealers before pulling the offer. We believe, though, that there could be a significant number of dealers expressing interest as the cost to make the shift would mean at least several hundred dollars in investment.
GM is pushing hard toward full electrification and doesn’t appear to be interested in releasing new hybrid models along the way. This exposes the company to a big risk, in particular customers who aren’t ready or are not interested in electric vehicles.
Even Ford is hedging its bets, rolling out the seventh-generation Mustang coupe in 2024, one year after Stellantis abandons the Dodge Challenger and as Chevrolet begins to unwind the Camaro. The upcoming Mustang will be only powered by gasoline engines. At the same time, the Mustang is Ford’s last car model. Everything else this manufacturer sells is either a utility vehicle or a pickup truck.
Toyota seems to have the most practical arrangement in place. The company has built tens of millions of hybrid electric vehicles for at least a quarter of a century. Recently, it introduced its first full-electric model that isn’t fuel-cell derived. Known as the Toyota bz4X, it is the first of several full-electric Toyota models arriving. Even so, Toyota will continue with gas models, conventional hybrids, and plug-in hybrids for the near term. It’s a plan that seems logical for this automaker in a market where EV shifting is widespread.
Business, F. (2022, September 2). GM to offer franchise buyouts to U.S. Buick dealers. Fox Business.
White, J. (2021, November 8). Cadillac thins out U.S. dealers to get fit for the Tesla challenge. Reuters.
Stoklosa, A. (2021, July 28). The Chevrolet Camaro Is Being Replaced By an Electric Sedan After 2024. Motor Trend.
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