Times are changing in the auto industry, and some dealerships appear unwilling to evolve. Last week we learned that nearly 20 percent of Cadillac dealerships accepted buyouts to drop the brand instead of making required upgrades to sell electric vehicles. GMC also has EVs on the way, but GM’s truck/SUV brand apparently has no intention of offering the same buyout deal to its dealership network.
That’s the word according to Automotive News, which cites Buick-GMC Vice President of Sales Duncan Aldred on the decision. In short, he says GMC will not follow a strategy similar to Cadillac, but stops short of offering additional insight. As it stands right now, approximately half of GMC’s dealership network is poised to sell the six-figure pickup truck. With the Hummer expected to be a low-volume niche vehicle, the added expense of EV equipment and training could be tough for small dealerships to justify.
Of course, there is a massive elephant in this electric room when it comes to dealerships. Without internal combustion engines, EVs require considerably less regular maintenance and with fewer moving parts, there will likely be far fewer mechanical failures. The main source of dealership profits come not from new vehicle sales, but parts and service. The current dealership model in the US hasn’t really changed since cars were invented, and as such, there’s little incentive for dealerships to sell electric vehicles unless that model evolves.
With the Hummer being a very expensive low-volume vehicle, GMC dealers won’t miss much by not stocking it. The Cadillac Lyriq should be more mainstream, but it still wasn’t lucrative enough for upwards of 150 Caddy dealers to stick around. However, these are all short-term decisions being made by dealership owners. The paradigm shift from fossil fuels to electricity will likely also see a paradigm shift in the traditional dealership model. And if these initial steps from GM dealers are an indication of the future, expect far fewer showrooms available to check out new models.