Buick tweaks its image to appeal to more drivers

ByABC News
June 21, 2012, 7:43 PM

— -- What happened to Buick?

Last year, rising sales star in GM's U.S. stable. This year, anchor.

The answer is complex, involving changes in the lineup, an image overhaul, shifts in selling philosophy and a growing global focus on China, where more than three-quarters of Buicks are sold. But for whatever reasons, Buick's U.S. sales continue to lag behind the overall new-vehicle market.

That's making the brand a hard test of parent General Motors' resolve to keep its vows. To boost profitability, GM has promised that its individual brands will continue to reduce deeply discounted fleet sales, trim profit-killing incentives and attract more import-loving and younger buyers.

GM is trying, through what it hopes will be growing sales of better and better cars and trucks, to banish its image as a bloated, inefficient automaker still alive only because of billions of dollars in taxpayer welfare in its government-run 2009 bankruptcy reorganization. Now that GM's down to just four brands, each one needs to perform.

Chevrolet might be GM's signature mainstream and Cadillac its global prestige icon, but Buick — sitting between those bookends and lacking the image of either — could be the truest test of GM's will to survive and thrive.

Buick says the sales slump is temporary, a hiccup due to a product gap between the end of the road for the big Lucerne sedan last June and the arrival of the new, small Verano sedan in showrooms in December.

Also, sales fell as Buick, per GM's overall strategy, backed away from low-profit sales to rental fleets in favor of fewer but richer sales to individual buyers, the so-called retail sales that automakers often emphasize in their monthly reports. Buick says its fleet sales now are 11% of total, down from 19% a year ago.

Cutting back on fleet sales also makes a brand more appealing, economically and emotionally. Your resale value is boosted because the used-car market isn't periodically flooded when rental-car fleets turn over cars. And your well-traveled neighbors are less likely to be dismissive of your Buick if it's not the same car they rented at the airport in Dallas or Milwaukee.

January through May, Buick sales are down 9.4% in a market up 13.4%, tally master Autodata shows. Sales in May were up a strong 19.2% from a year earlier, though they still lagged behind the month's 25.7% rise in overall new-vehicle sales.

Looking ahead, "All the indicators are good," says Tony DiSalle, vice president in charge of marketing for Buick. "We're back to a four-vehicle portfolio: LaCrosse, Regal, Verano and the Enclave crossover."

Buick sales this year have jumped an average 46% at his Buick dealerships in Atlanta and Roswell, Ga., and Nashville, says Mike Bowsher, president of Carl Black automotive. "I think Buick is on the right track. We just need to keep pounding away, one customer at a time," Bowsher says.

Late this year, a very small Encore crossover SUV joins the line. DiSalle says shoppers should be wowed by the subcompact's unusual mix of utility, nimbleness, fuel economy and luxury.

Analysts have their own views of Buick's brand renovation and prospects. "Buick is a brand in major transition, and it isn't going to be immediate. It will take time," says Ed Kim, vice president of industry analysis at consultant AutoPacific.