General Motors (NYSE:GM) has cut the size of its Buick dealership network roughly in half in the U.S. through an ongoing voluntary buyout program.
The 1,000-store reduction aims to increase the number of sales per location, or throughput, and profits at the remaining dealers, according to Duncan Aldred, global head of GM’s Buick and GMC brands. The buyouts also allow dealers who don’t want to invest in electric vehicles to get out of the business.
“What this is enabling us to do that is triple the throughput of the remaining dealers,” Aldred told the media. “I think it’s fair to say that I’m really pleased that we achieved it.”
Buick plans to continue to offer buyouts, which have cost GM about $1 billion thus far, into next year. The average sales of the remaining stores still trail those of GM’s GMC brand, which largely shares showrooms with Buick, according to Aldred.
A majority of the dealers who took buyouts were smaller stores, which represented only about 20% of Buick’s annual sales. As part of the buyouts, the company offers payments for the dealers to cease operating their businesses.
The voluntary buyout program with Buick’s roughly 2,000 U.S. franchise dealers started last year, as the brand began investments in its transition to exclusively offering all-electric vehicles domestically by 2030.
Shares in the car behemoth were flat early Wednesday to $35.88.
