'GM Has Cut Its Buick Dealership Network In Half Through Buyouts' - CNBC
Portfolio Pulse from Benzinga Newsdesk
General Motors (GM) has reduced its Buick dealership network in the U.S. by about half through a voluntary buyout program, aiming to increase sales per location and profits. The program has cost GM approximately $1 billion and will continue into the next year. The reduction is also part of Buick's transition to exclusively offering electric vehicles (EVs) by 2030. Buick's U.S. sales have increased by 63% through the third quarter compared to the previous year, and the introduction of the new Envista crossover is expected to further boost sales.
December 19, 2023 | 9:44 pm
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POSITIVE IMPACT
GM's strategic reduction of its Buick dealership network and continued investment in buyouts indicate a focus on profitability and a transition to EVs. The company's sales recovery and the launch of the Envista crossover may positively influence investor sentiment.
GM's decision to reduce the Buick dealership network is a significant strategic move that aims to improve profitability per dealer and align with the company's EV goals. The cost of the buyouts is substantial, but the potential for increased sales and profits at remaining dealerships, along with the positive sales trajectory and the introduction of new models like the Envista, could lead to a favorable short-term impact on GM's stock price. The focus on EVs also aligns with industry trends and regulatory pressures, which may be viewed positively by investors.
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