Buick: “2007 Is Our Breakout Year”
March 20, 2007

Buick General Manager Steve Shannon claims, with six new models being introduced this year, “2007 is our breakout year.”

Speaking to the Automotive Press Association luncheon in Detroit on Tuesday, Shannon outlined some of Buick’s product plans for this year. Buick's headliner will be the Enclave crossover that goes into production next month and will be heavily promoted by golfing great Tiger Woods this summer.

In addition, the LaCrosse undergoes an upgrade for the 2008 model year that will be unveiled at the New York auto show in a couple weeks.

Shannon also confirmed Buick will bring back its “Super” designation, after a 50-year hiatus, on the LaCrosse and Lucerne.

But Buick, which sold more vehicles in China than it did in the U.S. last year, faces an uphill battle on its home turf. Its U.S. sales have tumbled 46 percent since 2002. And the slide continues so far this year.

“Granted, Buick has the Enclave coming to market,” says Alex Rosten, manager of pricing and market analysis for Edmunds.com’s AutoObserver. “But at the same time, Buick is dropping the Terraza and Rainier. And the LaCrosse (with high 125 days to turn -– nearly double the industry norm) and Lucerne haven’t lived up to expectations.”

Year	Make	Market_Share	Total_Volume	TCI	Days_To_Turn
2002	Buick	2.6%	432,017	$2,984	67
2003	Buick	2.1%	336,788	$3,885	87
2004	Buick	1.9%	309,016	$4,298	93
2005	Buick	1.7%	282,288	$4,102	84
2006	Buick	1.5%	240,659	$3,203	75
2006 YTD	Buick	1.6%	38,598	$2,999	56
2007 YTD	Buick	1.2%	27,121	$3,499	100
% Change		-27.3%	-29.7%	16.7%	78.6%

(TCI - True Cost of Incentives)

Spin Control

That’s not the spin General Motors gives the Buick story. Indeed, Shannon opened his remarks noting that Buick sold 567,000 vehicles in 2006, up 17,000 from 2005, and those vehicles had an average value of $25,000. Further, the 104-year-old brand ranks No. 2 in the world’s fastest growing market of China.

His take is the Lucerne is by no means a disappointment. Buick sold 96,000 Lucernes last year, with 80,000 being retail, not fleet sales. Less profitable fleet sales of the Lucerne are about a third of what they were for the LeSabre it replaced. And lower fleet sales have helped boost the Lucerne’s residual value, Shannon said.

Enclave: The Game Changer

While the LaCrosse, which was a renamed replacement for the Regal, will be upgraded more in keeping with the Lucerne, it will be the Enclave that prompts Buick’s breakout, says Shannon.

“The Enclave changes the rules,” he said. “It will be the vehicle that makes people forget their preconceived notions about Buick.”

Based on the already introduced Saturn Outlook and GMC Acadia, the Enclave, indeed, is an elegant-looking crossover, inside and out. Buick has focused particularly on the quietness, which it claims rivals that of the Lexus RX and Mercedes-Benz R-Class.

Shannon showed a video that hints at how Buick will introduce the Enclave. To emphasize the change at Buick, the background music is hip hop. Tiger Woods will be featured prominently in Enclave marketing and, Shannon said, will show a seldom seen side of the golfer -- his lighter side. Shannon noted it also was fortuitous that Woods’ wife is giving birth to their first child as Buick brings its family-hauling Enclave to market.

Super Models Return

Cadillac created the V-Series, Chevrolet has the SS, Pontiac has the GXP, even Saturn has the Red and Green Lines to connote special uplevel models within a line. Buick now gets the Super, a designation last used in 1958. Shannon said the Super revival will connote exclusive content, power and dynamic enhancements in the upcoming LaCrosse and Lucerne Super models.

Shannon said other Super models could be in the works, including one for the Enclave.

Breakout, but Flat Sales

Shannon expects roughly flat sales for Buick this year, because it is dropping two models and new ones will be gearing up.

Over the long term, Shannon said Buick will sell fewer models, but those it will sell will have more "Buickness."

He said there may be room to add a model slightly above the Lucerne, and a dream car for Buick would be a four-seater convertible, like the Velite concept shown a few years ago.

China: The Buick Success Story

What can’t be disputed is Buick’s success story in China. It is GM’s top-selling brand in that fast-growing market and the country’s second-largest volume brand. Buick sales in China climbed 25 percent in 2006 over 2005.

However, it should be noted that the Buick label is carried on vehicles that didn’t originate as Buicks. Instead, the Buick name has been applied to Daewoo vehicles, developed through GM’s venture in South Korea.

In the future, however, Shannon said Buick in North America and China will work more closely and in a more formal way. Up until now, the arrangement has been unofficial and informal.

While Shannon wasn’t specific, it is likely the Buicks sold in China will be the same or at least similar to those sold in North America. For instance, the current LaCrosse sold in China is a different car from the LaCrosse sold in the U.S. However, the next-generation model is being codeveloped by Chinese and North American design studies and will essentially be the same car. (Fast Company, in its April issue, has a story on Buick designers in China.)

“Over the next year,” Shannon said, “the relationship of Buick in China to Buick in North America and vice versa will unfold.”

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