Sales abroad buoys Buick as it tries to change identity

Nora Naughton
The Detroit News

Buick’s latest attempt to shed its old-fogey reputation includes a fresher lineup for 2018, but General Motors Co. isn’t too worried given the premium brand’s quiet success with help from abroad.

Tom English shows Jenna Smart an Encore on Monday at Sellers Buick GMC in Farmington. The brand is targeting a more youthful set of buyers.

With its spunky Encore compact crossover and the first-ever redesign of the 10-year-old Enclave crossover, Buick appears to have made smart product decisions in the U.S. market in recent years. Add a new trio of Regals that includes the all-wheel-drive TourX hatchback, the five-door Sportback and a sporty 310-horsepower V-6-powered GS, and Buick’s lineup is looking a lot less geriatric than it used to.

“The stigma of the ‘sofa on wheels’ is fading,” said Dave Sullivan, an automotive analyst for AutoPacific, an automotive marketing research and product consulting firm.

The premium brand has room to experiment and take risks that many of its competitors don’t, with a cross-continental footprint that makes Buick a crucial part of GM’s global business. Four of the six nameplates in Buick’s lineup come from plants — or engineering centers — outside the United States, effectively making the tri-shield the most global of GM’s brands in its home market.

And the brand’s popularity in China spared it from execution after GM’s federally induced bankruptcy. Buick sold some 1.18 million vehicles in the rapidly growing Asian market in 2017, relatively in line with its performance in 2016. Through February, Buick sold 179,514 vehicles in China, up 11.3 percent from the same period a year ago. The brand saw a down year for sales in the U.S., off the 2016 pace by 4.5 percent in 2017 due largely to a decline in fleet sales.

Still, Buick’s brass is happy with the brand’s volume. Buick sold some 219,000 vehicles in the United States last year and grew its retail sales slightly.

“We don’t want to be a very small, or a very niche brand,” said Phil Brook, vice president of Buick marketing. “We like the volume, and on a global basis we have the Chinese market, where we’re No. 4 as a brand. We’re big enough to have global resources thrown behind us, but small enough as a brand to be able to kind of pivot and more and react pretty quickly.”

The Envision, a compact SUV that commands a higher price than the popular Encore, is built at GM’s plant in Shanghai. The Regal used to be manufactured at GM’s Oshawa, Ontario plant, but with the introduction of the Sportback and TourX last year, production moved to a plant in Rüsselsheim, Germany. And the Cascada, Buick’s 200-horsepower convertible, was developed in Germany with Opel — GM’s former European division that it sold to France’s PSA Groupe last year.

The brand is touting 2018 as its first full year armed with a completely refreshed product lineup, something it hopes will chip away at its average buyer age. Sitting around 60 years old through September 2017, that’s two years older than the previous six-month period, but two years younger than five years ago. It still doesn’t include the new Enclave or Regals because Buick’s demographic reporting lags by about six months.

“We think our refreshed lineup will bring younger people in. There’s no doubt about that,” said Brook. “And we’re not just filling holes in the lineup. What we try to do is find things that other people aren’t doing and the market.”

The Encore release in 2013 was a turning point for the brand. It was the first small SUV of its kind in the U.S. market, something that initially “made people think we were crazy,” said Brook. “But it’s just been a runaway success, and now everyone — and I mean everyone — is scrambling to put a car in that segment.”

Buick sold 88,035 Encores in 2017, accounting for just over 40 percent of the brand’s total U.S. deliveries last year. The second-best seller was the Enclave with 48,564 deliveries.

“It’s kind of amazing that the Enclave kept selling more and more each year even though it got old,” said Sam Slaughter, who owns Sellers Buick GMC in Farmington Hills. “It fit a niche.”

Slaughter had the No. 1 Buick dealership in the country in 2010, just a year after losing the Pontiac franchise at the store, which accounted for some 65 percent of his business.

“We decided if we were going to survive, we had to be the best Buick dealer we could be,” Slaughter said. “If you had told me 15 years ago that Pontiac was going to go away and Buick was going to save my business, I would have laughed at you.”

Buick sold some 219,000 vehicles in the United States last year and grew its retail sales slightly.

Unlike many of its competitors, like Ford Motor Co.’s Lincoln, Buick has the advantage of being allowed to stay in its lane in the premium category while sister brand Cadillac reaches for a higher, more expensive luxury ranking.

Cadillac is on a journey of its own, which begins in earnest at next week’s New York International Auto Show with the reveal of the XT4, the luxury brand’s first compact crossover. Its launch begins a flurry of new Cadillacs, with a new product every six months through the end of 2020. Under the direction of Cadillac president Johan de Nysschen, a longtime auto executive with stints at Audi and Nissan’s Infiniti brand, Cadillac is aiming to change consumer attitudes in the same way Buick is — attempting to prove that it is not an old-man’s brand.

Buick calls its premium-not-quite-luxury approach “attainable luxury,” and it’s a space the brand is comfortable with owning while competitors at Acura, Infiniti and Lincoln reach into the luxury category. Buick outpaced all three of those brands in volume in 2017, but doesn’t command the same prices overall. The brand has an average transaction price of $36,309 through the first two months of 2018, according to Kelley Blue Book. That’s compared to Acura’s average transaction price of $40,326 and Lincoln’s $52,003 — lifted by the pricey Navigator.

The brand is seeing success in other key demographics, mainly among women. Models like the Encore and Envision are appealing to female buyers, with 50 percent of all Buick customers being women. The Encore is also gaining new buyers at steady rate, with 56 percent first-time Buick buyers.

For all of these advantages and achievements, Buick still has a Riviera-sized chip on its shoulder. The brand’s “That’s not a Buick” ad campaign — coupled with a full jettison of the Buick name from the exterior of its vehicles starting with the 2019 model year — show an insecurity in Buick’s reputation.

Losing the name badge is a move toward “global consistency,” the brand said, but it also distances the brand from the name and its negative connotations. It also leaves an opening for Avenir badging on Buick’s new high-end trim level, offering a different name entirely to its most expensive vehicles.

Buick is also moving away from its brand-wide advertising strategy to focus on specific vehicles during an ad-blitz planned for the March Madness NCAA basketball tournament. The defensive tone remains, with people in ads reacting with utter shock when they see a new Buick, as though such a brand could not possibly produce something they connect with.

The three new Regals — the sportback, TourX and GS — are highlighted in the March Madness spots with the “Which Regal Would You Choose” campaign. A potential Buick buyer experiences an internal struggle, talking to his many “selves” as he tries to decide which Regal is right for him. The ads come during the NCAA basketball tournament when young future Buick buyers are tuned in live, something that could be valuable, said Buick marketing director Sam Russell.

Buick’s current marketing strategy is starkly different than its competitors in its self-deprecation. And it has nothing to do with insecurity.

“Self-deprecation with integrity and honesty shows confidence,” he said. “‘That’s not a Buick’ was a brand moment, creating false familiarity with the Buick name. We decided to make fun of the situation while showing we’re not this same car company anymore. We’ve set ourself apart as a luxury brand that enjoys taking a more humorous approach.”