Buick Seeks to Extend Enclave’s Magic – But Will It Reach?
January 12, 2008

By Dale Buss

By attempting to spread the design and sales impact of the highly successful Enclave crossover throughout the rest of the Buick vehicle lineup, General Motors executives are trying to borrow a page from the old Walt Disney Co. playbook.

And the future of Buick likely depends on whether they succeed.

Disney executives used to talk about “pixie dust” – metaphorically collected from the colossal success of their theme parks – as the company’s particular brand of Midas touch that graced practically everything they did from the Eighties through the Nineties.

Buick hopes that “Enclave design and quality cues” provide comparable contagious magic for them.

On Thursday, Buick unveiled to North American media the Riviera concept car that the division plans to feature at the Detroit aut show, which holds its first press day Sunday and opens to the public in a week. It is the model’s first appearance anywhere since it was unveiled at the Shanghai show last fall.

GM design executives made a point of noting Riviera’s origins in the studios of a GM joint venture in China, not in the United States. GM now sells more Buicks in China than it does in the U.S.

And they again trotted out Velite, the four-seat-convertible concept car that arguably launched the Buick design revolution when it was introduced four years ago.

But while out of the spotlight, Enclave clearly was the star of the show. Riviera conveyed much of the same design DNA that Enclave already has used to great effect, including a “waterfall” grille, vestigial “portholes,” very elongated headlights and huge, sweeping curved lines along the sides of the vehicle. And while Velite’s design played a big role in spawning Enclave, it’s the SUV offspring that actually has proven itself in the marketplace, while the concept convertible remains just a show car.

In fact, Buick already has sold 30,000 Enclaves – mostly the highly optioned CXL version – in just six months on the market, and production isn’t likely to catch up with demand for another few months. The seven-passenger crossover has won rave reviews from automotive media for its styling, both inside and out, and for substantially standing up under Buick’s claim that Enclave is a worthy competitor to counterparts produced by true luxury brands including Lexus and Mercedes-Benz. It is a finalist for the North American Truck of the Year award, the winner of which will be announced at the Detroit auto show Sunday.

Enclave’s distinctive design also is key to the fact that, as Buick said late last year, GM will begin exporting Enclaves to China. Already, China is actually Buick’s largest market. And last year, GM overall sold more than one million vehicles in China for the first time as the company competes with Volkswagen for market leadership.

Enclave: Buick's Only Bright Spot

Enclave’s raging success stands out all the more by contrast with the abysmal sales performance of the other two, brand-new sedans that comprise the rest of Buick’s current lineup.

Sales of the full-size Lucerne, introduced in 2006 as a replacement for the LeSabre and Park Avenue, dropped off 16%, to 83,000 last year from 99,000 in 2005. Meanwhile, sales of the LaCrosse mid-size sedan, which debuted in retirement of the Century and Regal models in 2005, plunged even further last year – by nearly 33%, to 71,000 from 48,000 units in 2005. Sales also dropped precipitously last year for three other vehicles that Buick is phasing out: the Rainier and Rendezvous SUVs and Terraza minivan.

Overall, Buick’s sales were down 22.8% for 2007, compared with the previous year, according to analysis by Edmunds.com, and even fell 9.9% in December despite Enclave’s rising popularity and momentum.

BUICK'S SALES SLIDE
Vehicle	Make Market Share	2006	2007	Difference	2007 TCI
Century	0.0%	83	5	78
Enclave	24.5%	-	29,286	-	$1,479
LaCrosse	26.0%	71,102	47,747	23,355	$2,636
Lucerne	44.9%	98,828	83,044	15,784	$2,866
Park Avenue	0.1%	51	26	25	-
Rainier	3.9%	12,691	4,819	7,872	$5,348
Rendezvous	18.5%	45,954	15,295	30,659	$5,794
Terraza	4.2%	11,948	5,569	6,379	$1,323
	Total	240,657	185,791	54,866

Source: Edmunds.com

Enclave: The Success Story

GM’s limited initial output of Enclave helped create buzz-building – and profit-boosting – demand for the vehicle, once critical reception established it as a worthy competitor in the fast-developing luxury-crossover market. Buick finally produced about 5,000 Enclaves in December, the first month that it managed to reach designated production capacity for the vehicle at GM’s Lansing, Mich., assembly complex, Lloyd Biermann, Buick’s marketing manager, told AutoObserver.

“At the end of [2007], we only had 4,000 Enclaves in inventory, because every month retail sales have been outstripping the inventory we’ve been building,” Biermann said. “It’s an interesting problem to have. We still have 1,500 sold orders in the queue, and we can’t promise to deliver vehicles to those people for three months yet.”

Indeed, while the industry long has considered a 60-day supply of a given vehicle to be the ideal inventory level, only about a 30-day supply of Enclaves exist at this point. The vehicle’s turn rate of 14 days is the fastest of any crossover, according to Dave Smidebush, Buick’s product director.

Even more important than the benefits of relative scarcity to Enclave has been the fact that dealers and buyers have been treating it as a truly upscale vehicle, confirming GM’s positioning of Enclave’s style, pricing, features and quality against the likes of the Lexus RX and Acura MDX. Ninety percent of Enclave sales are of the leather-trimmed, high-content CXL model, Biermann said – much higher than the 70%-30% split that Buick had predicted for the CXL versus the basic CX model.

“Our previous vehicles generally ran a higher percent cloth [interior], so our projections for Enclave were more in line with history,” Biermann said. “But our whole marketing campaign – comparing Enclave with luxury vehicles – has taken hold.” Another factor: When demand for a new vehicle is strong, he added, “dealers will naturally order a richer mix.”

What’s more, the average transaction price in the sale of an Enclave is about $37,500, or about $2,000 more than GM had anticipated, Biermann said.

Such results leave GM executives eager to see how thoroughly they can leverage Enclave’s bang-up success to help the rest of Buick’s ailing lineup. So in its overall marketing, Buick will seek to borrow some Enclave magic. “For 2008, you’ll see more [advertising about] the family of Buicks, and we’ll use Enclave to provide a halo to the other two products,” Biermann said. Among other things, he said, all of Buick’s products will appear together in more brand advertising compared with just individual-product promotions.

And Buick is pressing ahead to apply Enclave’s styling lessons to every other vehicle. “Design is a longer-term thing,” Biermann said. “You can’t just wave a wand over everything with it.”

But already, for example, GM executives promise that the new Lucerne Super version, to be introduced this spring, will be a dramatic exemplar of the new design regimen, featuring a waterfall grill, portholes, a new hood and new front fascia as well as woven embossed leather and other design and comfort enhancements in the interior. And while there's already a Super version available of the current LaCrosse, GM Vice Chairman Robert Lutz has predicted that the completely new LaCrosse, coming out later this year, will be “a mind-boggler."

And indeed, Buick’s best hope to exit the ranks of the industry’s damaged brands is to distill and replicate what it has done with Enclave. That’s why the vehicle was the true star of Thursday’s press preview even though its name wasn’t on the marquee.

“Enclave is a great example” of what the company means by “true Buicks,” said Smidebush; as head of brand and product development for Saturn until recently, he helped turn around that brand’s lineup. “That means beautiful design, library-quiet interiors, smooth and controlled ride quality, and overall craftsmanship.”

Riveria: Return of a Classic

The Riviera concept is a gull-wing, front-wheel-drive coupe that was developed  with global design input by the Pan Asia Technical Automotive Center, a Shanghai-based design and engineering joint venture between GM and Shanghai Automotive Industry Corp. Engineered to accommodate a new hybrid system that will go into production this year at Shanghai GM, GM’s flagship joint venture with Shanghai Automotive, it features several technological and manufacturing advances.

But Riviera’s design was front and center on Thursday, as shown off by Ed Welburn, GM’s vice president of global design. Among other distinctives, vivid lines of blue light run down the middle of the hood, along the bottom of the side panels, and outlining the headlights. The headlight bezels stretch back to incorporate vestigial portholes. And while Riviera sports a Buick-characteristic waterfall grille, the corners of this grille are turned up into a sort of smile; blue backlighting highlights the circular Buick emblem in the middle of the grille.

Riviera also sports what Dave Lyon, GM’s executive director of exterior design, called “key signature lines” consisting of one long curve that begins at the front fender as well as a “short hop” over the rear wheels.

Lyon said that Buick wanted to incorporate “a Chinese influence” into the Riviera, “in addition to Buick classic cues. Not for a Chinese look, but to add character.” This influence, he noted, is evident in how pale-jade antiques – which are classic Chinese objets d’art – influenced the shapes of front and rear headlamps. Also, mindful of the poor lighting in Shanghai, the designers engineered Riviera’s lights to turn on automatically when the driver approaches a vehicle.

Inside, Riviera is supposed to be reminiscent of a “day spa,” Lyon said, sporting a mix of suede and brushed metals. “It’s beautiful, quiet and comfortable,” he said. “You’ll arrive refreshed and relaxed.”

The Riviera concept marks the return of a renowned Buick nameplate after an eight-year hiatus. Between 1963 and 1999, GM sold more than 1.1 million Rivieras in the United States. At this point, however, GM has no plans to put the Riviera concept into production.

Meantime, back out on the street, however, Buick remains a distressed brand despite Enclave’s huge popularity. GM pared back its product portfolio to make Buick’s lineup complimentary with those of Pontiac and GMC, as it has helped dealers consolidate around outlets selling all three makes. “Having only three products has allowed us to focus on true Buicks and on going upscale,” Biermann said.

So does that make Buick’s challenge akin to that of another damaged brand: Ford’s Lincoln marque? “A year ago, I would have said that Buick [prospects] were a notch below those of Lincoln,” Biermann allowed. “But today, from an image standpoint, I think we’re comparable to Lincoln – but with more upside potential.”

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