Buick, after years of struggle, shows signs of turnaround
08-16-10, 03:59 PM
#1
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Buick, after years of struggle, shows signs of turnaround
http://www.autonews.com/apps/pbcs.dl...100819896/1259
ENLARGE
The Regal is the newest addition to the Buick lineup. GM is on track to sell more than 148,000 Buicks in the United States this year, up from 102,306 last year and 137,197 in 2008.
Buick, after years of struggle, shows signs of turnaround
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NEW YORK -- While the focus at General Motors Co. in the past several months has been on the change to new marketing chief Joel Ewanick, on reshaping Chevrolet and Cadillac and on the automaker's impending initial public offering, very quietly the Buick brand has become a driving force for the company.
A new design and a marketing shift targeting a younger audience have helped U.S. sales of Buick's Enclave, Regal and LaCrosse skyrocket since last year -- and even more so in China, where it is the No. 1 brand.
To steal a line from the classic Oldsmobile campaign, this is not your (grand)father's car any more.
That campaign didn't increase sales of Oldsmobiles that much, and it remains to be seen whether the Buick surge can be sustained. But Ewanick is confident that the brand is back.
Sales surge
"Buick is just nothing but blue sky," he said. "It's the fastest-growing brand in America, and we're selling LaCrosse as fast as we can get them. It's a great success story."
After 25 years of falling sales, GM sold 137 percent more Buicks in July than it did in July 2009. Through the first seven months of this year, sales are up 60 percent over the same period last year. GM is on track to sell more than 148,000 Buicks in the United States this year, up from 102,306 last year and 137,197 in 2008.
How did Buick's sales rebound? And how has the brand stuck -- fairly or unfairly -- with the tag of being a "senior citizen's car" turned its fortunes around?
"It's a change in design that appeals to younger people," says Charles Krome, a writer and analyst for Autotropolis.com. "It's much more up to date and comparable to what's out there on the market. And GM is really making an effort to get past that whole 'grandfatherly' car thing with the marketing to younger customers."
Shift to new audience
Last year GM decided to end its relationship with golfer Tiger Woods (before his much-publicized personal problems) and to stop sponsoring the Buick Open. The flailing economy was blamed as well as GM's subsequent need for a $50 billion government bailout. But it was also a calculated move because the golf community tends to skew old.
GM is positioning Buick as a luxury brand -- often comparing it to Lexus and Acura -- and reaching out to younger buyers while maintaining an Average Joe pricing structure. The average age of a Buick buyer has dropped to 61 from 64 in the past 18 months, according to autoguide.com. That's still high compared with the average mid-50s buyer for Lexus and Acura, but it shows Buick's commitment to marketing to a younger audience.
Expanding the lineup
Buick also has embraced social media. In June, GM launched a Web site, momentoftruth.com, in which it invites comments about the 2011 Buick Regal -- good, bad or indifferent.
One woman wrote, "Isn't Buick Regal just a car for Jersey-ites in their 80s?" while another wrote on Buick's Facebook page, "A definate [sic] American eyebrow raiser that says HMMMMM!!! I Love It!!"
The company also has hosted get-together parties in several cities and handed out Flip video cameras for attendees to record their thoughts on the car. The videos are then posted to the site.
"Straightforward advertising is what they had been doing, letting the car be the hero, talking about the features, letting people see the styling," Ewanick said. "What we need to do in quick order is to start to frame and define what that brand is going to stand for. We're working on that right now."
GM is exploring whether to expand the Buick lineup to six or seven models -- including a hybrid version of the LaCrosse sedan, a baby crossover and a compact sedan. The Lucerne sedan will be dropped after the 2011 model year.
Dealers are underestimated
According to Cars.com, the redesigned, rebadged Enclave crossover began Buick's resurgence in 2008. Noting that the automotive press and car enthusiasts are less than enthusiastic about the rebadging process -- which is basically taking one brand's grille and putting it on another model and renaming the vehicle -- Cars.com said Buick went to great lengths to differentiate the Enclave from the GMC Acadia and Chevrolet Traverse, saying "that formula was, and remains, a sales success."
In a comparison between the 2010 Enclave, the 2010 Acura MDX 3.7-liter and the 2010 Lincoln MKT, Cars.com wrote: "The Enclave beats its competitors in many categories -- including some of the most important. It's not the quickest or most nimble, but it's more than competent. The most important features to the crossover buyer are roominess, comfort, efficiency and quality. The Enclave is one of the best models GM makes, and, in this comparison, the editors' choice."
Ewanick also credits Buick's dealer network for the sales increase.
"That dealer network is underestimated; it's one of the best there is,” he said. “You give them good product, they can sell it. That's what they've been asking for, for years. We are going to see design and marketing work together. I don't know why it's never been done like that before."
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz0woR3LLpY
ENLARGE
The Regal is the newest addition to the Buick lineup. GM is on track to sell more than 148,000 Buicks in the United States this year, up from 102,306 last year and 137,197 in 2008.
Buick, after years of struggle, shows signs of turnaround
Follow Automotive News
RSS Feed
NEW YORK -- While the focus at General Motors Co. in the past several months has been on the change to new marketing chief Joel Ewanick, on reshaping Chevrolet and Cadillac and on the automaker's impending initial public offering, very quietly the Buick brand has become a driving force for the company.
A new design and a marketing shift targeting a younger audience have helped U.S. sales of Buick's Enclave, Regal and LaCrosse skyrocket since last year -- and even more so in China, where it is the No. 1 brand.
To steal a line from the classic Oldsmobile campaign, this is not your (grand)father's car any more.
That campaign didn't increase sales of Oldsmobiles that much, and it remains to be seen whether the Buick surge can be sustained. But Ewanick is confident that the brand is back.
Sales surge
"Buick is just nothing but blue sky," he said. "It's the fastest-growing brand in America, and we're selling LaCrosse as fast as we can get them. It's a great success story."
After 25 years of falling sales, GM sold 137 percent more Buicks in July than it did in July 2009. Through the first seven months of this year, sales are up 60 percent over the same period last year. GM is on track to sell more than 148,000 Buicks in the United States this year, up from 102,306 last year and 137,197 in 2008.
How did Buick's sales rebound? And how has the brand stuck -- fairly or unfairly -- with the tag of being a "senior citizen's car" turned its fortunes around?
"It's a change in design that appeals to younger people," says Charles Krome, a writer and analyst for Autotropolis.com. "It's much more up to date and comparable to what's out there on the market. And GM is really making an effort to get past that whole 'grandfatherly' car thing with the marketing to younger customers."
Shift to new audience
Last year GM decided to end its relationship with golfer Tiger Woods (before his much-publicized personal problems) and to stop sponsoring the Buick Open. The flailing economy was blamed as well as GM's subsequent need for a $50 billion government bailout. But it was also a calculated move because the golf community tends to skew old.
GM is positioning Buick as a luxury brand -- often comparing it to Lexus and Acura -- and reaching out to younger buyers while maintaining an Average Joe pricing structure. The average age of a Buick buyer has dropped to 61 from 64 in the past 18 months, according to autoguide.com. That's still high compared with the average mid-50s buyer for Lexus and Acura, but it shows Buick's commitment to marketing to a younger audience.
Expanding the lineup
Buick also has embraced social media. In June, GM launched a Web site, momentoftruth.com, in which it invites comments about the 2011 Buick Regal -- good, bad or indifferent.
One woman wrote, "Isn't Buick Regal just a car for Jersey-ites in their 80s?" while another wrote on Buick's Facebook page, "A definate [sic] American eyebrow raiser that says HMMMMM!!! I Love It!!"
The company also has hosted get-together parties in several cities and handed out Flip video cameras for attendees to record their thoughts on the car. The videos are then posted to the site.
"Straightforward advertising is what they had been doing, letting the car be the hero, talking about the features, letting people see the styling," Ewanick said. "What we need to do in quick order is to start to frame and define what that brand is going to stand for. We're working on that right now."
GM is exploring whether to expand the Buick lineup to six or seven models -- including a hybrid version of the LaCrosse sedan, a baby crossover and a compact sedan. The Lucerne sedan will be dropped after the 2011 model year.
Dealers are underestimated
According to Cars.com, the redesigned, rebadged Enclave crossover began Buick's resurgence in 2008. Noting that the automotive press and car enthusiasts are less than enthusiastic about the rebadging process -- which is basically taking one brand's grille and putting it on another model and renaming the vehicle -- Cars.com said Buick went to great lengths to differentiate the Enclave from the GMC Acadia and Chevrolet Traverse, saying "that formula was, and remains, a sales success."
In a comparison between the 2010 Enclave, the 2010 Acura MDX 3.7-liter and the 2010 Lincoln MKT, Cars.com wrote: "The Enclave beats its competitors in many categories -- including some of the most important. It's not the quickest or most nimble, but it's more than competent. The most important features to the crossover buyer are roominess, comfort, efficiency and quality. The Enclave is one of the best models GM makes, and, in this comparison, the editors' choice."
Ewanick also credits Buick's dealer network for the sales increase.
"That dealer network is underestimated; it's one of the best there is,” he said. “You give them good product, they can sell it. That's what they've been asking for, for years. We are going to see design and marketing work together. I don't know why it's never been done like that before."
Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz0woR3LLpY
08-16-10, 08:38 PM
#4
Lexus Fanatic
The average age of a Buick buyer has dropped to 61 from 64 in the past 18 months, according to autoguide.com. That's still high compared with the average mid-50s buyer for Lexus and Acura, but it shows Buick's commitment to marketing to a younger audience.
That said, the new LaCrosse has generally done a great job of combining a traditional smooth, quiet Buick ride with much-improved steering/handling....its chassis, IMO, is nothing short of outstanding. It also has a much-needed AWD version. But the new interior, while more high-tech-looking and less-traditional Buick, has, IMO, lost too much of its plushness and rich wood-tone paneling.
08-16-10, 09:19 PM
#5
Buick IS showing signs that they WILL go down fighting, however I would not go so far as turn around YET. Yes the new Lacrosse may be doing well for them, and is not to bad looking a car, and the Enclave is also a pretty good seller for them; I wouldn't start popping champaigne bottles yet. I saw a truckload of New Regals on the highway coming from the plant, and I was disappointed to say the least. The New Regal, to me, SCREAMS cheap on soooooo many levels. At least, asthetically, it does anyway. It may be a good car, I dunno,,haven;t driven it, but it lost big time in the styling dept to me. I grew up in a period when Regal meant something of Majesty, beautiful to look at, Grand styling, etc. IMO,this new Regal def fails to live up to it's name. Reminds me of the Mercury Milan that was out a few years back.
Last edited by trukn1; 08-16-10 at 09:24 PM.
08-16-10, 09:34 PM
#6
Lexus Fanatic
Buick IS showing signs that they WILL go down fighting, however I would not go so far as turn around YET. Yes the new Lacrosse may be doing well for them, and is not to bad looking a car, and the Enclave is also a pretty good seller for them; I wouldn't start popping champaigne bottles yet. I saw a truckload of New Regals on the highway coming from the plant, and I was disappointed to say the least. The New Regal, to me, SCREAMS cheap on soooooo many levels. At least, asthetically, it does anyway. It may be a good car, I dunno,,haven;t driven it, but it lost big time in the styling dept to me. I grew up in a period when Regal meant something of Majesty, beautiful to look at, Grand styling, etc. IMO,this new Regal def fails to live up to it's name. Reminds me of the Mercury Milan that was out a few years back.
09-25-10, 02:34 PM
#7
Lexus Fanatic
I didn't actually take the time to test-drive one, though......I was tired, and had some other things to do (and I had no specific requests for a review). But I gave it a good static examination, inside and out, both in the showroom (where the temperature nice and cool) and on the ones parked outside in the 90-degree heat. For the most part, it looks like an offshoot of the Lacrosse...the two basic body and platforms look very familiar. It does not have a V6 option, though, and uses a turbo-4 instead for power. The interior was more or less similiar to the Lacrosse, except that it had a different, much darker wood-trim, not as much chrome-glitz on the dash....and no wood trim on the rear doors like in the Lacrosse. It also lacks the Buick-portholes on the hood that all the other Buicks have. I was surprised at the quality of the interior trim and hardware (GM has come a long way on that in the last few years) and the quality of the paint. But some of the interior buttons/switches still had the cheesy feel of past GM versions....and Honda/Acura still seems to do interior hardware better than any other mass-market auto producer. The only thing I actually disliked inside (besides some of those flimsy buttons) was the way that they did the speedo and tach in the identical size/markings/colors. The tach had the same 10, 20, 30, 40, etc... markings that the speedo had....and both were markedly different than the more chromy-glitz speedo/tach in the Lacrosse. In the Regal, the speedo and tach's markings (until you get used to them) could easily be confused at first glance. Also, the fuel and temp gauges seem a little small.
I didn't test-drive it, but the reviews I have read say that is somewhat more German-feel and sporting than older Buicks, with a good ride/handling compromise. That's also something that can be said of the new Lacrosse (though probably to a lesser extent), which I HAVE driven.
Last edited by mmarshall; 09-25-10 at 02:43 PM.
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05-29-12, 07:55 AM
#8
Update
Buick, the storied General Motors brand that had been staging a strong comeback since barely surviving GM's 2009 restructuring, has hit a pothole.
Buick sales have dropped for 7 straight months, tied with Cadillac for the longest losing streak among the 41 brands sold in the United States. But unlike Cadillac, which has 2 new nameplates coming this summer, Buick doesn't have new or redesigned vehicles riding to the rescue.
The question confronting Buick is whether the slump is a sign of deeper troubles or simply growing pains now that GM finally has gotten serious about positioning Buick to challenge entry-luxury brands such as Acura and Infiniti.
Much of Buick's lost sales momentum is self-inflicted, as GM takes steps to polish the brand's image and raise residual values. For example, GM has dialed back Buick sales to rental-car companies, a practice that for years has eroded the brand's value.
Buick sales to fleet customers -- the vast majority of which are rental-car companies -- were down by 2/3s in the 1st 4 months of 2012 from year-earlier levels.
The scale-back marks a major strategic shift for Buick, which historically has relied on rental-fleet sales to move the metal. In the pre-recession and pre-bankruptcy year of 2007, for example, fleet sales accounted for around 15% of Buick's sales. This year, through April, they were 7%, a GM spokesman says.
Buick also has scaled back on consumer incentives -- another step that erodes sales in the short term -- in the hope that it will pay dividends down the road in the form of a better image and higher prices. Through April, Buick's incentive spending fell to 10.1% of its average transaction price per vehicle, from 11.5% in the same period last year, TrueCar.com data show.
More leases seen as a must
At the same time, Buick is working to make its leases more competitive. Dealers say that's crucial if Buick wants to compete in the entry luxury space, where lease penetration tops 50% for some brands.
GM executives say getting Buick's long-term positioning right trumps any concerns over short-term sales numbers.
"We're taking a very disciplined approach to the Buick brand," says Brian Sweeney, vice president of sales and service for Buick-GMC. "We're building a good house, a good foundation."
While the percentage drop in fleet sales is deep into the double digits, retail sales haven't been great either. Retail sales are down 5% through April. Add in fleet sales, and Buick's total sales in the 1st 4 months came to 52,782, down 16%.
In contrast, GMC's sales rose 2% to 124,487. Most Buick dealers also sell the GMC truck brand.
As recently as last fall, brisk demand for Buick's Enclave large crossover and Regal sedan were helping the brand to 24 straight months of sales gains, one of the industry's longest runs. For all of 2011, Buick sales rose 14%, after soaring 52% in 2010.
But demand for the Regal and Enclave has sagged. The Enclave gets reskinned for the 2013 model year, while the Regal, which was launched in late 2009, likely won't get any significant enhancements for two years.
GM executives and many Buick dealers are confident that the recent decline is simply a lull. Both groups rave that the growing lineup of sedans and crossovers is vastly improved over just a few years ago -- a view supported by sharply higher residual values and solid product reviews.
Last year Buick vehicles on average were expected to retain 46 percent of their value after 36 months, up from 39% in 2008, according to data from ALG. The residual on the Buick Verano is 48%, equal to that of an Audi A3 and competitive with other cars in ALG's premium compact segment, including the Volvo C30 and Lexus CT 200h, each of which is projected to hold 49% of its value after 36 months.
GM also is pushing for better service from its leaner Buick-GMC dealer network, which has shrunk to 2,121 franchises last year, from 2,705 at the start of 2008.
Buick-GMC dealers are rolling out a courtesy loaner program for service customers. Buick dealers' customer satisfaction scores already are among the industry's highest, ranking No. 2 out of 21 mass-market brands in the 2012 J.D. Power and Associates Customer Service Index Study.
'Major success'
"The dealers who are engaged and buying into the direction of the brand are having major success," says Mike Bowsher, who owns 2 Buick-GMC stores in the Atlanta area and 1 in Orlando.
The 109-year-old Buick brand was saved from the chopping block during GM's restructuring because of its strong sales in China, the world's largest auto market. Selling virtually the same vehicles across continents drives down development costs. Last year Buick was the No. 5 brand in China, selling 645,829 units -- nearly 4 times as many as it sells in the United States.
While it's the smallest of GM's 4 brands in the United States, Buick helps GM attract new buyers: 41% of Buick buyers in 2011 came from non-GM brands, up from 29% in 2007, GM says.
Bowsher, co-chairman of the Buick-GMC National Dealer Council, is among many dealers surprised by Buick's lost momentum. He says his stores' Buick sales were up 46% for the year through April.
In addition to the drop in fleet sales, GM managers point to the recent phasing out of the aging Buick Lucerne. But those lost units largely have been offset by the new Buick Verano, the brand's 1st small car since the early 1990s, which was launched in December.
Swapping those cars should help Buick's nagging image as a retirees' brand. With its 4-speed transmission and cavernous trunk, the Lucerne was the final holdout of old-school Buick. The Verano, which is based on the Opel Astra, is aimed at younger buyers looking for their first taste of luxury.
Dealers cite 2 major drags on Buick sales:
1. Brand perception.
A stodgy image still clings to the brand even as Buick rolls out European-derived cars with sleek, taut designs such as the Regal, which is a cousin of the Opel Insignia. It is built in Osh-awa, Ontario.
In its April car-buying issue, Consumer Reports rated the Regal higher than the Volvo S60 and Audi A4 among compact sport sedans. The Enclave ranked sixth out of 22 luxury SUVs. Both got low marks for reliability, though, which is a nagging problem, according to the magazine.
"I fight the good fight every day about perception," says Steve Cappellino, a Buick-GMC dealer near Buffalo, N.Y. "I'll tell someone I'm a Buick dealer and they'll say, 'Oh, my dad owned 1,' or, 'My grandfather had 3.'"
Despite GM's efforts to position Buick against import luxury brands such as Acura and Infiniti, research shows that consumers lump Buick with brands such as Ford and Toyota. In April, those were the 2 most-shopped brands by consumers who also were considering a Buick, according to Edmunds.com.
2. Leasing strategy.
Cappellino echoes the sentiment of many Buick dealers: The trick is persuading would-be buyers to get behind the wheel to dispel the old-fogey image. They hope a new lease program will help.
In March, GM rolled out a 24-month lease deal, dubbed Experience Buick, that includes routine maintenance, satellite radio and OnStar.
Since then, Cappellino says showroom traffic has been the strongest of the year. But it hasn't yet reversed Buick's monthly sales declines.
Sweeney says the program has helped push Buick's nationwide lease penetration up to 30%. He expects it to climb even higher.
Until the new lease plan, Buick's lease penetration hovered around 15%. That's below the industry average of around 22% and far lower than the brands Buick is targeting, such as Acura, Lincoln and Infiniti, whose lease penetrations range from 35% to higher than half of sales.
Leasing virtually dried up for GM dealers during the 2008-09 financial crisis.
Buick-GMC dealers had been stuck trying to sell Buicks with monthly lease payments that were higher than rivals' in the entry-luxury category, where competitive lease payments are crucial for success. That was especially painful in lease-heavy markets such as the Northeast, where lease rates can exceed 40% for sedans.
Now Buick is advertising a 24-month lease on an Enclave for no money down and $433 per month, including the maintenance, satellite radio and OnStar. That's $20 cheaper than a 39-month lease with no freebies that Buick had offered before.
In contrast, buyers can get a 36-month lease on an Acura MDX SUV for $449 per month plus $2,999 down.
'Missing the boat'
"They were missing the boat, and they realized it," Cappellino says.
Greg Heath, a vice president at Mark Christopher Auto Center in Ontario, Calif., said better lease deals helped drive his Buick sales up to 15 units in April, from an average of 3 or 4 in previous months.
But Heath, whose store got the Buick franchise in 2009, says he needs 25 sales a month to get a decent return on investment.
"If the product were crappy, I'd say, 'This is going to be a long battle,'" Heath says. "But the product is good. And now these lease payments are phenomenal.
"If we don't see Buick sales go up with what we're throwing into the marketplace right now," he says, "then shame on us."
PHP Code:
Buick sales lose momentum
Buick sales
Units % change
2010 155,389 52%
2011 177,633 14%
2012, Jan.-April 52,782 –16%
You can reach Mike Colias at mcolias@crain.com.
05-29-12, 12:41 PM
#9
Lexus Champion
According to Cars.com, the redesigned, rebadged Enclave crossover began Buick's resurgence in 2008. Noting that the automotive press and car enthusiasts are less than enthusiastic about the rebadging process -- which is basically taking one brand's grille and putting it on another model and renaming the vehicle -- Cars.com said Buick went to great lengths to differentiate the Enclave from the GMC Acadia and Chevrolet Traverse, saying "that formula was, and remains, a sales success."
In a comparison between the 2010 Enclave, the 2010 Acura MDX 3.7-liter and the 2010 Lincoln MKT, Cars.com wrote: "The Enclave beats its competitors in many categories -- including some of the most important. It's not the quickest or most nimble, but it's more than competent. The most important features to the crossover buyer are roominess, comfort, efficiency and quality. The Enclave is one of the best models GM makes, and, in this comparison, the editors' choice."
Ewanick also credits Buick's dealer network for the sales increase.
In a comparison between the 2010 Enclave, the 2010 Acura MDX 3.7-liter and the 2010 Lincoln MKT, Cars.com wrote: "The Enclave beats its competitors in many categories -- including some of the most important. It's not the quickest or most nimble, but it's more than competent. The most important features to the crossover buyer are roominess, comfort, efficiency and quality. The Enclave is one of the best models GM makes, and, in this comparison, the editors' choice."
Ewanick also credits Buick's dealer network for the sales increase.
05-29-12, 12:56 PM
#10
Lexus Champion
A mentioned in the article, no Buick model is on Consumer Reports Recommended list due to low or declining reliability. The Verano is too new to qualify but Enclave, LaCrosse and Regal don't make the list.
05-29-12, 05:49 PM
#12
I don't know how they got the people buying Buicks like crazy over there, people talk about Buick just like Mercedes and BMWs over there. My uncle bought a Buick Regal a while ago ( looks different than the US model ), and I sat in it couple times, it's roomy but there is nothing else to say about it.
05-30-12, 01:50 AM
#13
I don't know how they got the people buying Buicks like crazy over there, people talk about Buick just like Mercedes and BMWs over there. My uncle bought a Buick Regal a while ago ( looks different than the US model ), and I sat in it couple times, it's roomy but there is nothing else to say about it.
... and their sales are down 16% in April and for year to date, so much on signs of turnaround that original article wrote about.
05-30-12, 02:57 AM
#14
Lexus Test Driver
The majority of Buicks I see here in L.A. are mostly rentals. Perhaps the heart of America falls more for Buick's recipe than out West.
Personally, I think they've improved, but all their interior designs are one generation behind. Also in my opinion, using Europe's model for our Regal is a sign the U.S. branch didn't have the know-how to do their own thing. That doesn't leave me with much confidence. Last time GM pulled a similar stunt, Saturn died.
Personally, I think they've improved, but all their interior designs are one generation behind. Also in my opinion, using Europe's model for our Regal is a sign the U.S. branch didn't have the know-how to do their own thing. That doesn't leave me with much confidence. Last time GM pulled a similar stunt, Saturn died.
05-30-12, 06:56 AM
#15
I think GM has done a respectable job of turning Buick around, and of course, there will be some hurdles along the way. Before the Enclave... their entire lineup was outdated garbage.Then along came the LaCrosse, Regal, and now Verano. It's going to take time for Buick to re-establish themselves and pull in new customers. One generation of new vehicles isn't enough to magically turn the tables.
I personally think that a CUV based on the Equinox and a large sedan that shares a platform with the XTS would have been money better spent than the new Verano and the hatchback thing (forget the name).
I personally think that a CUV based on the Equinox and a large sedan that shares a platform with the XTS would have been money better spent than the new Verano and the hatchback thing (forget the name).