Sport-utility revolution elevates Buick and GMC
The sport-utility revolution has transformed the automotive landscape in the last eight years from cars to high-riding SUVs.
Two of the biggest winners in that revolution are Detroit brands: Buick and GMC.
Struggling in the U.S. market as a stodgy sedan-maker, Buick was saved from General Motors’ 2009 bankruptcy graveyard by its stature in the Chinese market. But in a prescient reading of the U.S. marketplace, Buick pioneered the subcompact SUV segment and remade itself as an SUV brand in its home market to post record sales.
On the other hand, GMC — a truckmaker for over a century — has seen the market come to it. Recognizing the opportunity, it is expanding its “Professional Grade” truck mantra to become a full-line SUV builder including the all-new, compact GMC Terrain introduced this summer.
“With the industry really moving to SUVs at a rapid pace, GMC finds itself in the perfect position,” said Duncan Aldred, vice president for global Buick and GMC, at the Terrain’s media introduction in Pittsburgh. “It’s something we’re known for and we excel at.”
SUV-rich mainstream brands such as Chevrolet and Toyota have quickly retooled to produce SUVs from subcompact to full-size, while sedan-dependent automakers such as Volkswagen have struggled. Luxury-makers have exploited SUV sales to translate their sports car DNA into hot-selling crossovers; Jaguar, for example, is the fastest-growing brand in America with a 116 percent increase in sales thanks to its first SUV, the F-Pace.
As SUVs and pickups have increased their market share from 47 percent to 63 percent of the market since 2009, Buick’s resurgence has been particularly remarkable.
Unlike sister GM brands Chevrolet and Cadillac, which have been making popular SUVs since the late 20th century, Buick's early SUV entrants struggled until 2008 with the midsize, three-row Enclave. While the Enclave proved a consistent 50,000-per-year seller, it was the groundbreaking subcompact Encore that really turned the tide for Buick.
The cute SUV pioneered the subcompact SUV segment in 2013 and was an instant hit, introducing first-time buyers to the brand with perky handling and decidedly non-traditional Buick looks. Despite being followed into the subcompact space by a flood of mainstream and luxury copycats, the Encore remains the third-bestseller despite a premium sticker price much higher than mainstream entries.
“We were the first to recognize the small SUV trend when we brought the Encore into the market,” Aldred said. “The beauty of that vehicle is that it conquests more than any vehicle in the GM stable. So it brings in more people to the brand than any other GM car. And it also has the highest buyer loyalty, the youngest age demographic and the highest percentage of female buyers in the company.”
Refreshed this year with a new face, the Encore is the unlikely halo vehicle for a full SUV lineup that now includes the compact Envision and mid-size Enclave, which will get its media introduction next week on an all-new platform for 2018.
“We have strong entries in the three core segments, and that’s been enough to transform Buick from a 30 to 35 percent SUV brand just four years ago to 70 to 75 percent SUV today,” Aldred said. “It’s really modernized the brand.”
Kelley Blue Book auto analyst Michelle Krebs said “the SUVs have brought new customers to the brand and brought its aging buyer demographic down.”
With 12.3 percent growth in 2016 — its fourth consecutive year of record sales — Buick outpaced the industry three times over. It is now the fourth-largest premium brand in the U.S., behind Mercedes-Benz, Lexus and BMW. GM’s internal brand-awareness tracking places Buick at a higher level than Acura, Infiniti and Lincoln.
Brand image hasn’t been an issue with GMC. It has ridden its high-gloss image and super-sized pickups and Yukon sport utilities to the highest, non-luxury-brand average transaction price — over $45,000. That makes the brand ripe for expansion into the red-hot smaller-SUV segments.
“GMC has done the right thing for a long time,” KBB’s Krebs said. “It’s allowed them to stay true and authentic to their customers. Now the SUV trend gives them a great opportunity to head-to-head against Jeep as the premiere utility brand.”
GMC sales have more than doubled since 2009 to 546,628 last year, and are up 3 percent this year as its all-new, midsize Acadia SUV has hit the market. It also exploited the reborn midsize-pickup market with the GMC Canyon. But the brand has particularly high hopes for the handsome, all-new-for-2018 Terrain which is redefining the brand’s image with a more sculpted, less-pickup-like design style that targets female buyers.
“The outgoing Terrain was wonderfully bold, but it was a little polarizing,” Aldred said. “With this car, it’s a stunning design that will have a broader appeal. It’s going into the compact SUV segment that is the biggest in the U.S. at over 3 million.”
Henry Payne is auto critic for The Detroit News. Find him at firstname.lastname@example.org or Twitter @HenryEPayne