There are strong forecasts out today for electrification across the globe, with the largest percentage growth in market share expected to be in the United States. Don’t tell that to the approximately 47% of Buick dealers who decided they’d rather not sell Buicks if it means investing in electrification. In today’s The Morning Dump I’m gonna talk about why that’s logical, why it’s probably good for those dealerships, and why it’s likely good for Buick.
You know what wouldn’t be good for a bunch of automakers? The proposed 52-million car recall over airbags that safety regulators are saying is likely necessary and automakers are saying shouldn’t happen. Who will come out on top?
‘Tis the season for asking questions about the future, and our journalist pal Micki Maynard has a few of them regarding driving habits of the future and how they’ll impact the market.
EVs On Track To Increase Market Share By 66.4% In The US Next Year
Normally, in The Morning Dump, I like to make the headline match the first story so you, my dear readers, don’t have to scroll too far. Today, though, I think it’s important to establish the prospects for the electric vehicle market in America.
My conjecture all along has been less that people don’t want electric cars and more that automakers in the United States haven’t offered enough competitively priced vehicles with the right feature mix. This is why I think we’re likely to see a rise in hybrid sales next year.
Even with all of the headwinds for BEV sales (Battery Electric Vehicles, excluding hybrids) out there, the reality is that more people will switch to electric cars next year. And the year after that. And the year after that. It may be slower than some like, but it’s happening.
The folks at S&P Global Mobility, whom we quote often, are now out with ttheir EV forecast for 2024 and, overall, they see an increase in the share of electric cars growing their share by 39.5% to 16.2% of sales globally.
Why?
Despite slowing consumer demand for electric vehicles, reports of the demise of EVs have been greatly exaggerated. S&P Global Mobility’s 2024 global sales forecast projects battery electric passenger vehicles to be on track to post 13.3 million units worldwide for 2024 – accounting for an estimated 16.2% of global passenger vehicle sales. For reference, 2023 posted an estimated 9.6 million BEVs, for 12% market share.
This feels about right to me, and the growth in the United States of 66.4% (in spite of changing tax credits) in share is a reflection of both consumer demand and the fact that the U.S. lags behind places like China in EV adoption so there’s still a lot of low hanging fruit with buyers who have been on the fence.
Why Buick Dealers Are Bolting
Almost half of Buick’s U.S. dealers have elected to take a buyout from the automaker as opposed to making a large investment in selling EVs in preparation for when the Buick brand becomes EV-only, according to Automotive News. That’s a lot.
Specifically, Automotive News reports that Buick had 1,958 dealers in the United States when the year started and that it’ll end 2023 with approximately 1,000 of them.
Buick offered to buy out retailers who did not want to invest hundreds of thousands of dollars on tooling, equipment and training to prepare to sell and service EVs as the brand goes all-electric by the end of the decade.
But, you might wonder, didn’t the last story indicate that there will be more EV sales next year? Yes. Are Buick sales down? Nope. Buick is the fastest growing of GM brands this year, up 54% in Q3 of this year, despite losing dealers. What gives?
There are multiple factors at play, but let’s start with the most obvious: America probably didn’t need 2,000 Buick dealers. From the AN report:
The roughly 1,000 dealerships that left the brand this year previously represented about 20 percent of Buick’s U.S. sales, Aldred said. Dealer throughput has increased by an average of 300 percent this year, he said, adding that that shows the brand has been able to retain customers. About 89 percent of the nation’s population is still within 25 miles of a Buick dealership, according to the brand.
The math here is pretty simple. Approximately 1,000 dealers had to share just 20% of the company’s sales. Even with the brand improving and growing post-pandemic, it’s maybe even a relief for some of these dealers to take some cash and move on.
Geography also plays a factor here. While EV sales are up, the distribution is extremely varied across this large country of ours. In California, EVs have a market share of about 25% the year, compared to just 1.2% in North Dakota.
And it’s not like these dealers are necessarily leaving the GM fold as there are few standalone Buick dealers, as noted in the piece:
Bo Mandal, chairman of the Buick-GMC National Dealer Council, said some dealers who chose to give up their Buick franchise wanted to focus on other parts of their business, including other GM brands. Some, for instance, may have been in stronger truck markets and opted to concentrate on GMC.
This is a rare situation where most parties probably make out alright from this arrangement. Dealers who don’t see a future for EVs in their market can pocket a little cash, dealers who do now have less competition, and Buick can focus on supporting its most successful partners.
What Is The Future?
It’s a big question. There’s still so much uncertainty and we’re all grappling with it. Do you know who might have a good read on it? Our pal Micki Maynard. She’s one of the smartest and most experienced reporters in the car game and she posted something yesterday on her Substack that’s worth reading.
I shall excerpt from it, as is my wont:
There is an intellectual and an emotional disconnect in the way people are looking at automobiles as 2024 approaches. Intellectually, it seems clear to us all that change is coming – and indeed, must come about if we care at all about the planet and about each other’s safety.
Emotionally, however, automobiles are still prized possessions for many of us, if not necessities for their owners. The tens of millions of vehicles in use reflect the fact that in many places, there is simply no alternative to personal vehicle ownership.
I think all of us feel this quite strongly. Anyway, give it a read, it’s good.
The Looming Recall
I warned y’all back in October that the biggest disruption to the car market in the near future isn’t going to be electric cars, but rather this giant 52 million vehicle airbag recall that sounds very much like the Takata nightmare of earlier this century.
As a refresher, here’s the NHTSA description of what happened:
Based on its investigation, NHTSA believes that ruptures may result from the weld slag produced by the friction welding manufacturing process. Should weld slag of a sufficient size become dislodged, it can cause a blockage of the inflator exit orifice when the air bag deploys. A blockage of sufficient size will cause an over pressurization and rupture of the inflator, leading to the potential forced propulsion of shrapnel or metal fragments from the inflator into the passenger compartment. Additional inflator ruptures are expected to occur in the future, risking more serious injuries and deaths, if they are not recalled and replaced.
This impacts a bunch of automakers and a confounding number of cars. Will it actually happen? Automakers are arguing against a recall, saying the events are too rare to be worth the cost.
GM, which in May recalled 1 million ARC inflators after a rupture in March resulted in facial injuries to a driver, said NHTSA failed to demonstrate the need for “a massive and unprecedented expansion of the existing ARC inflator recalls.”
GM added the recall would affect “as much as 15% of the over 300 million registered motor vehicles in the United States.”
GM and Stellantis both called NHTSA’s decision “arbitrary, capricious, and contrary to law.”
GM is probably the worst off here, as they used maybe 20 million of these airbags in their vehicles. NTHSA should rule soon and then we’ll see what the automakers might do to stop it.
What I’m Listening To While Writing This
Do you like electronic music? Sometimes I like electronic music. Check out Yaeji’s “With A Hammer” if you do.
The Big Question
If you’re a Buick dealer in your home market, do you take the money or make the investment? Also, tell us where your market is.
Encores are a common sight for me in NC, including some that come from out of state plates (not rentals, very clearly consumer-owned vehicles and dating back to older Encores that are well past any rental duty). The newer GX not as much I think.
Enclaves have always been popular in the same way an MDX is – upscale but not too showy of a badge. An Enclave buyer might move to an Acadia now that the next gen is back to the same size.
Envisions are popping up more, but suspect that was helped more by the lower price -it’s one that hasn’t increased in price, actually roughly the same MSRP as 5 years ago, and less if you compare similar powertrains (all have a 2.0T now, although lower in output vs. the 2.0T prior). Seeing one is still like “oh yeah they do make that” for me.
If you’re a Buick dealer as part of a larger or recognized dealer, it may make sense to invest. But IIRC it wasn’t that long ago Buick dealers were upgrading their facilities, and that was more for aesthetics, not the tooling etc. we’re talking here. The Buick side of the lot isn’t big enough for a smaller dealer to probably justify another round of upgrades already that are more than skin deep.
Also – two things driving me crazy (pun) about drivers lately that I have needed to vent:
I have seen many more people making U-turns in the middle of a street, simple 2 lane streets, sometimes requiring a 3-point turn and thus holding up traffic. Pulling away from curbs, or to turn around and get a spot on the other side.
I also see so many more people driving with their high beams on. Sometimes I can’t tell if it’s just my eyes, but I know it‘s not just bright LEDs (although I do wonder if the latest gen Civics and Accords LED lights are aimed properly, they seem to be worse), but halogen lights. Sometimes on cars with one low beam is out, but not always, just everything on high.
Saw a Tesla today with a “Friends of Coal” specialty license plate. Not sure if he was trolling or if it was just an honest acknowledgement of where electricity comes from around here.
I also think that Tesla’s audience has changed rapidly the more people have learned about Elon. They used to be popular with limousine liberal types but now that he’s exposed himself as a right wing authoritarian loon there are probably people buying them to OWN THE LIBS…which is delectably ironic.
I can confirm anecdotally anyways. My Brother in law is one who wouldn’t be caught dead buying an electric just a few years ago. He just bought a Tesla this year to go along with his giant Silverado 2500.
Lol. No, very few people give a damn about Musk, and even fewer use him as some sort of guidestar for their car buying decisions. The limosuine liberals all still own Teslas unless they upgraded to a Porshe. Normal people are buying Teslas because they are one of the few remotely economical cars on the market and you can find charging for them better than anything else. The “OWN THE LIBS” crowd still buys giant pickups. It is in fact not normal to obsess about Musk.
Joe Manchin sighting? When I was in CA a few months ago, I saw one with a plate that read “PIVAAT”, naturally I assumed it was David Schwimmer.
Those are all over KY
Apparently they’ve leaked into Ohio now.
I’ve seen one here in western Kentucky, too. I hoped it was the owner acknowledging that our electricity comes from coal, but it might have just been him being funny. Either way, I’d do the same if I had an EV.
Ah, W. Virginia – https://transportation.wv.gov/DMV/Vehicle-Services/License-Plates/Special-Plates/Pages/Special-Plate.aspx?p=75 – true enough, they produce the majority of their electricity from coal. Still no tailpipe emissions, though. In CA, it’s mostly renewables, with the percentage of natural gas dropping every year.
If I were a low volume Buick dealer I would definitely take the money. I can’t help but think of the Harley-Davidson dealerships that opted to sell the Livewire. As I recall, they had to spend around $200,000 for training and infrastructure upgrades. Many of the dealers ended up selling maybe 5 bikes and are no longer selling Livewire motorcycles. I suspect Buick EVs will be far more successful than Livewire motorcycles, but it is still a risk if there is a lot of upfront investment required.
I wonder if part of the problem is excessive requirements by the manufacturer to sell EVs? For Livewire, a big part of the investment was building level 3 chargers at their dealerships (I believe this was required by H-D in order to sell those bikes). These chargers were almost never used and were expensive to install and maintain. Had level 3 chargers not been a condition of selling Livewires, far less investment would have been required. I’m not sure what Buick is requiring dealers to do to sell EVs, but I suspect a lot of the investment is not 100% necessary to sell and service EVs.
Banana fanna fo fandal…
There was a rumor a while back that Ian Callum was going to be wooed away from his own company to help Buick design more interesting vehicles. This was a pretty controversial idea and a lot of folks were not happy about it, but GM finally gave them an ultimatum: Mandal or Ian.
Locally there are a lot of Encores, Enclaves and a few Envisions driving around. Most driven by women in their 40’s or older by the hair styles. So heck yes I’d spend the dough on EV upgrades. Those customers will be back at the end of their leases and looking for something similarly easy to use. Upselling an EV as “no more gas stations, charge it at home” seems like a logical decision. Plus their (typically) husbands may get the okay to lease that new Sierra a bit later if I treat the first customers fairly.
I read this as “most driven by women, or their hair styles” and it still feels truthy
LOL!
Look, when Trump wins again next fall, he’s gonna roll back these rulings, mandate a cap on efficiency, re-implement high sulfur diesel and encourage coal based cars.
That’s after the rolling tribunals/vengeance tour scheduled through ’27. We have the Putin/Trump global tour penciled in for ’28.
These Buick dealers are just reading the room.
Paging Mr. Nader…
Buick dealerships know that the octogenarians who buy their vehicles don’t want EVs, so why bother changing when you have a loyal customer base who will keep buying your ICE vehicles for year to come?
subtle and clever.
Most octogenarians are done with “coming back to buy another car.” They’ve already bought their last.
If I’m a Buick dealer, I’m probably also selling other GM products at a much faster rate. Hell, I probably make a lot more money on used vehicles than Buick. I take the buyout, invest it in what I need for EVs for my other GM brands. When they realize they lost too many dealerships, I consider a deal to become a Buick dealer again. My investments for other GM EVs probably mean I’m ready for Buick EVs.
I definitely see why so many took the deal. Buick isn’t the brand that can push too hard.
Lexus and other premium brands do fine with fewer dealers. The sheer number of Buick dealers was a legacy from Detroit domination for so long. And if 50% of dealers are accounting for only 20% of sales then by all means cut them loose if they want. The remaining dealers can make up for that.
TIL that Buick dealers still exist in the USA.
I honestly thought they were only in China these days.
Question: what’s the EV pictured in the first story? It looks like it has “GNX” on the grille, but any search for “GNX EV” turns up this beauty: https://www.hotcars.com/its-an-electrifying-transformation-for-this-buick-gnx/
“making a large investment in selling EVs in preparation for when the Buick brand becomes EV-only”
EVs require way less maintenance How is a dealer supposed to survive when the bulk of its profit comes from service and not selling a low margin car.
Aren’t we always complaining about dealerships? Move to direct sales already.
Yeah, we may start seeing a major shift in how new car dealerships operate and how large they are. I suspect we’re going to see operations pared down and an emphasis on ordering what you want, rather than keeping so much stock on hand. Expect limited staff, limited test drive models, maybe even required appointments for test drives. And a lot less pressure to buy something that they have in stock.
But maybe I’m too optimistic.
As a Pennsylvania resident, I don’t see many Buicks around. Only the occasional early-aughts LeSabres and Centurys, and occasional CTS’s and Encores.
Buick Encores and Envisions are a common sight in Seattle commuter traffic.
Interestingly not so much in Everett commuter traffic. I’ll occasionally see an Encore, but have yet to see a single Envision.
I’m down on the south side, and I’ve seen way more of both than I would ever have expected. Not crazy common – but enough to make me think they are selling decently.
Read the sub stack.
The increase in driver aggression in the past 3.5 years is very noticeable, especially people blowing stop signs and red lights, and the sheer volume of people weaving in an out of traffic at 30-35 above the posted limit, in family haulers. I see people blare their horn at pedestrians who have walk signals at crosswalks, actually creep into them on purpose. etc. Not to the younger crowd, but to even little old ladies! It’s not one archetype either. Mostly 35-55, but all colors, ethnicities, types of vehicles. etc.
Boston is about to break its record for pedestrian deaths this year. 101 so far.
Heck, I’m on a busy road with a posted 25. I set up a Raspberry Pi with a camera to record bad behavior, and the staggering one was a Jeep Grand Cherokee doing an estimated 81mph in a suburb with a population density of 8000 per square mile. Heck, I think an area around Northeastern University in Boston is 40-50K in that square mile. People need to behave, but moreover there needs to be actual traffic enforcement so people are incentivized to.
As for BEVs, it’s again people trying to avoid the, “early HDTV” problem I always talk about. 1-1.5 model gens from now the uptake should be quite strong, but people don’t want to be stuck holding the bag on parts replacement dead ends, or deal with teething issues when something like a RAV4 or a Honda Pilot or Ford F-150 is a known quantity.
To many current gen EVs are like 3D TVs, just a fad that will pass eventually when something better comes out (4k in this example)
Yes, I tend not to be an early adopter of technology – and I am an engineer. Too often I see the next big thing rapidly supplanted for something cheaper and better. I recall people spending thousands to fully wire their homes for internet, only for wireless to make it obsolete in a decade. Which tape/cd/dvd format will prevail? Plasma or LCD then LED TV? I tend to wait for things to reach a certain acceptance and maturity before buying. I’m not paying to be a beta tester.
You forgot EDTV CRTs. They weren’t even 720p.
You forgot Digital Lens Projection (DLP), with $200-300 bulbs with a service life.
You forgot TVs that were normal fluorescent or were CCFL backlit.
You forgot non-dynamic, single zone, LED-backlit TVs
You forgot HDTVs with NO TUNER. Not even a 720p ones. You had to rent a tuner or cable box from your service provider no matter what. Or even worse, CableCard which was barely supported even when it was, “the new thing.”
You forgot 720p only HDTVs. 1080i only HDTVs. Then 720p/1080i only TVs.
You forgot TVs with only a single HDMI port.
—–
All that nonsense was from 1998 – 2008. Late 2007 was when the Samsung 81 Series hit, which was the template on which every TV afterwards was based. Yeah, there’s other stuff since, but the Samsung 81 Series checked all the boxes.
Remember the BetaMAx vs VHS fiasco as a small child. If I recall there was another format competing with DVD for market supremacy in the late ’90s. Your timeline checks out, think my first flat screen was a 40′ Sharp from around 2009 that is still in use. Multiple HDMI inputs and still has the old RCA jacks for input from VHS or audio out. I didn’t buy a modern smartphone until 2015 or so. My newest car is a 2014.
Hell, I still use a fantastic Panasonic Plasma… Plasma was the better TV but just couldn’t compete on price once LCDs were able to get turned out so cheaply. RIP
Price, weight and power consumption.
My 40” Samsung 81 Series pulls 130W. The same size Pioneer Kuro2 Elite plasma at the time (which was the benchmark for picture quality) pulls about four times as much from the wall, at 500ish W.
That’s not just the power for the TV, but that’ll heat up a room. So in summer, more A/C to offset the TV’s heat generation. That doesn’t sound like much if you have dirt cheap electric, but talk to anyone on the US coasts, or the EU and they’ll care about power consumption much more as they pay 2.5-5x as much
Weight was another one. Figure at least 50% heavier back then (up to nearly 2x) , which could complicate wall mounting. A lot of 50” Plasmas weighed as much as 27” CRTs (around 100lbs).
Me too.
I live in Los Angeles and I don’t know a single person who owns a Buick. My grandma had one but she stopped driving 20 years ago.
Hot shit, that’s a lot of cut lines on that Chinese Buick thing. Front bumper, fender, hood, a pillar, other part of fender, door, flare and charge port door all in like .. a foot or 2 of space. Jeebus.
Also, I live in a major SE city, and for some reason, there’s Buicks everywhere, so I’m sure they’ll all pay up and do the upgrades.
I would not sell Buicks.
Im not going to lie…I was confused by the headline because I already forgot that Buick was still a living brand.
“Welcome to Independence Pontiac Scion Oldsmobile Saab Mercury Holden Fisker DeLorean [Buick]!”
(Yes, I know I forgot your favorite defunct maker. You, the person reading this. Just to spite you. Yes.)
Give me Studebaker or give me death!
Lemme get, ummmmmm, a Saturn Ion.
“That’s so youuuu…”
And this is despite Buick’s near-constant vapid commercials
I live in a small-ish town in northwestern Kentucky. We just lost our Cadillac franchise because of the EV transition, so anyone with a Cadillac now has to drive an hour or so away for service. I’m wondering if we have now lost Buick as well.
Update: the Buick logo is gone from their website already, so I’m guessing they took the buyout on this like they did with Cadillac. So, they are now a Chevrolet-GMC dealer.
Good idea. Maybe I can get one of the remaining Buicks they have for $1?
An hour for the closest Caddy dealership or any GM?
Closest Caddy. We have a GM dealer here but they now only sell Chevrolet and GMC. They also told local media that they can no longer service Cadillacs. Which I assume means warranty work, because there’s no reason they couldn’t do oil changes or whatever.
Most Buick dealerships are also GMC Dealers, so how does that work out?
They just drop selling Buicks. They’ll sell GMCs and service both.
And inevitably make the same upgrades anyway when GMC becomes an EV-only brand in like 6 years
Or switch to Toyota and transition in a more rational timeline.
As if they don’t already own and operate Toyota dealerships too
I am still waiting for Toyota to “invite” me to the dealer to complete my airbag recall. (The first recall from years ago.)
The first one they did they totally fucked up my dash and in dash electronics. Still not sure how that was accomplished though.
But it is Alabama, so I was not the least bit surprised. I have seen Glaciers that move faster than Toyota does on this shit. Screw them.
Buick sells well here in the land of the gray haired fossils. They will stick around.
Toyota can’t replace your airbag if they can’t get one to install. The government has set priorities as to which vehicles, and which locations get them first. Apparently they (the government, not Toyota) don’t think you are at high risk.
“A total of 67 million airbags have been recalled, and at the end of 2022, 11 million were still yet to be replaced….For millions of vehicles in the recall but not under a stop-driving order, NHTSA has prioritized delivery of parts to models and areas with the highest concentration of Takata incidents, NHTSA told CR.
“It was not possible for all replacement parts to be available right away, and some vehicles were at much higher risk of a dangerous airbag explosion than others,” agency spokeswoman Karen Aldana said.
“https://www.consumerreports.org/cars/car-recalls-defects/takata-airbag-recall-everything-you-need-to-know-a1060713669/
And if another 52 million vehicles are recalled for airbags, things won’t get better any time soon.
That’s so you!
Worst. Ads. Ever.
So bad, that Buick’s ad agency had to remove the couple from the third scene due to excessive cringe.
Most big brand ads seem to be matching the level of cringe, but I most want them to drop the Matt and Kim song. It’s over 10 years old…it’s not only outlasted entire generations of multiple cars in that period, I think they’ve been using it for more time than the entire production run of the original Encore and even that was too long!
I’m located in an exurb of a major city, and I would reluctantly make the upgrade. Not necessarily because I value Buick as a brand, but because I:
A) Want to remain in GM’s good graces for additional allocations of the profitable GMC trucks I also sell (is there a single Buick dealer not attached to GMC anymore?)
B) Eventually will be asked to make these same upgrades for GMC as well, and that brand I cannot lose without going out of business entirely.
____________
Thoughtful Substack piece linked as well. I find myself agreeing with most of it.
Unless you change brands entirely, like some dealers I’ve noticed that used to sell GM brands and have moved on to something else.
I think those brands will someday now or in the future ask for the EV upgrades too.
Yes, but perhaps on a more reasonable timeline, like Toyota.
This seems logical.
Being a buick dealer? I’d sell out, and become a toyota dealer.
I mean, depends on the sales volume, product in the pipeline, and if I feel confident that the products won’t be riddled with teething problems in the first few years.
Around where I grew up? Take the money and run.
Around Boston where I am now? Math likely works to invest further.
Make the investment and hope the infrastructure catches up.