As General Motors begins its “road show” to convince big institutional investors that the formerly bankrupt automaker, still the biggest in the U.S., is worth buying, not all the talk, surprisingly, will be about Chevrolet and Cadillac. GM executives will be talking up the current success and bright future of Buick, a brand that some of the same executives were advocating be killed last year along with Pontiac, Saturn and Hummer.
Ironically it was then-CEO Fritz Henderson, whom GM’s board fired last December, who convinced the board and the White House Auto Task Force that oversaw GM’s bankruptcy that Buick and GMC were important to save. Buick is critical to GM's business in China, Henderson argued, and GMC, despite offering little but Chevy product with extra chrome, was profitable. In the end, the numbers, not Henderson, convinced the honchos on the task force, and so Buick was spared the automotive guillotine.
Part of the “new GM”, the old Buick has to earn its way. The big question, though, is whether GM is poised to fix Buick, or repeat past mistakes. The outlook is good right now. Sales are up 55% off the terrible 2009 lows of the entire industry. GM chief marketing officer Joel Ewanick says the Buick buyer’s average age has dropped by ten years in just ten months.
The brand is the fastest growing among volume automakers this year, led by the Enclave SUV and LaCrosse sedan. The newest Buick, the 2011 Regal, is just getting started. And next year, the company plans to introduce the Verano, a car smaller than the Regal, based on the same engineering platform as the Chevy Cruze. The Verano will be a sedan, with a crossover based on the same small-car architecture to follow.
If GM could regularly sell 300,000 Buicks a year spread across four or five models (including the Lucerne sedan, whose future is uncertain) GM will be happy, even though that is a far cry from the one-million-plus Buicks sold in 1985, its high-water mark.
But let's not get ahead of ourselves. Buick still needs plenty of fixing.
The Less Than Regal Regal
Let's start with the new 2011 Regal. The current Regals are being imported from Germany, while GM readies its Oshawa, Canada plant to build Regals next year. The Regal is an Opel car GM sells in Europe that was supposed to be the new Saturn Aura. But when GM killed Saturn, Buick got the car.
Buick executives -- and there have been many in the last 20 years as GM seemed to swap out sales and marketing staff every 15 months or so -- perennially lament the average age buyers of Buick, which has long trended well above 60. Three years ago, it was a staggering 72. They are always out to attract a younger buyer; they'd seemingly pay a bounty for anyone who could deliver a buyer under the age of 45 and didn't work for GM.
It's hard to see how this car, wearing the Buick Regal badge is going to help GM get younger with Buick. For starters, anyone over 40 will associate the Regal name with the nondescript, velour-filled rental cars of the 90s. The low-point for the brand may have been the "Joseph Abboud" Buick Regal GS, which GM sold from 1998 to 2004. The two-tone seats were ok, but Joseph Abboud emblems? Please.
The LaCrosse is a different story, which begs the question why the Asian-designed and U.S. built sedan has such a better interior. Sales of the LaCrosse are up 158 percent year-to-date. The success is somewhat surprising because the $30,000-$40,000 sedan market has long been a kind of no man's land for non-luxury brands like the Nissan Maxima, the new Ford Taurus and Toyota Avalon.
Buick’s Long History
Buick has plenty of history in the U.S., as the oldest operating American brand of car, having started in 1899 as the Buick Auto-Vim and Power Company. It was incorporated in 1903 as the Buick Motor Co. by Scottish-born David Dunbar Buick. Buick's tri-shield logo is based on Dunbar's family coat of arms. Buick's best era was arguably 1936 to 1966 when it remained a leader in the kind of big, stylish sedans and wagons America loved through the Roosevelt and Eisenhower eras.
While history seems to be a plus for brands like Mercedes-Benz and BMW, it seems to cut mostly against a brand like Buick. The age of the brand, and the history of automotive dogs it has foisted upon the buying public (the 1990s era Century and Regal come to mind) make the brand feel more like grandpa's hat that stays on the shelf as a relic rather than on a young man's head.
In positioning Buick for the younger buyer and the future, some Buick watchers believe the brand would be more successful concentrating on meeting the needs of the still significantly large but aging baby boomers rather than chasing Gen X or Gen Y. Auto industry consultant James Dollinger, who was the top Buick sales generator in the 1990s for six years, says current designs are alienating Buick's bread-and butter buyers. "Buick has always been sort of the Lane Bryant of the auto industry," says Dollinger. Buick, at its best, says Dollinger, builds roomy, classically designed sedans, and now crossovers. "When the Lucerne sedan goes away, they won't have a six-passenger vehicle anymore, and I think that's a mistake."
Research Buick Vehicles
Is It A Luxury Brand?
So, what is Buick supposed to be going forward? "Approachable luxury," says advertising and sales promotion director Craig Bierley. "Lexus is the brand we are targeting."
More precisely, it is the ES and RX lines of Lexus that Buick is after. Buick's press releases unabashedly refer to the Enclave SUV as a "luxury crossover." CMO Ewanick takes it a step further when he says, “A true luxury brand with no compromise that will attract a completely different customer than Cadillac.”
It’s a tough case to make for such an established brand. "If they are patient, and really get the marketing right, and continue to turn out good product, they could pull it off," says New-York-based independent marketing consultant Dan Carson. "Buick could be part of the under-stated luxury trend some forecasters believe in... where we think a growing number of luxury buyers may not want the fat-wallet statement of Mercedes-Benz and BMW, and younger buyers won't want to spend big for high-priced luxury ... but this is a threading of the needle for a brand like Buick even if this trend does materialize for the long term."
Marketing has been a problem for Buick, and the brand is likely in for another change. In the last decade, the brand has had a revolving door of ad strategies: "The Spirit of American Style," “Dream Up," "Isn't It Time For a Real Car,” "Buick: It's All Good." The current positioning is "The New Class of World Class," which is just a bit over a year old. But that slogan and positioning seems to rub against Cadillac's "The New Standard of the World." And Ewanick says it will change yet again, soon.
Big In China
As GM tried to rebuild Buick in the U.S., the company is still making plenty of money on the brand. For all the problems Buick has had in America, it has had nothing but success in the fastest growing market for cars in the world, China. It would surprise most Americas who haven’t been to China that Buick in that country has 28 models off 7 different car lines, ranging from a $14,000, base Excelle that’s built in China, to $87,000 for a loaded Enclave crossover built in Michigan and shipped there.
Perhaps a bigger surprise is that a Chinese version of the defunct and much-derided Buick Terraza minivan is far and away the leader in what the Chinese call the “Business MPV” category. In China, it is called the GL8, and is used like a Lincoln Town car to ferry executives around.
Buick’s place in China’s automotive consciousness goes back to at least 1906 when records show even at that early date, rallies were taking place. In the 1930s, an ad in China stated that one in six cars sold were Buicks. When GM inked a joint venture deal in 1997 with Shanghai Automotive to build cars in China, GM wanted to build Chevrolets, but the government insisted they be Buicks.
GM chief of design Ed Welburn says the growth of Buick in China and the commitment made to the brand in North America is why young designers in their 20s have been eager to work on future Buick products. “With the excitement they have for updating the brand, I feel very confident we are going to win over a new generation in the U.S.,” says Welburn.
Had GM decided to kill off Buick in the U.S., it could have reverberated back to China and impacted the market there. In the city centers of Beijing and Shanghai, huge branded stores like Adidas, Nike, Burberry, and Gucci are packed with China’s rising middle class. They’d know a dead brand when they see one.Far from dead, or even ailing as they are in the U.S., Buick and Chevy are the hot brands in the world’s fastest growing consumer market. In a truly global market driven by the Internet, GM is hoping that the cool-factor of Buick in the Far East might even start to carry a little currency back to the U.S.