Buick's Big Turnaround is No Fluke
Buick's Big Turnaround is No Fluke
The 2009 forced-closure of Hummer, Pontiac, and Saturn was a tough pill to swallow for the General Motors faithful, and an especially baffling decision for some who questioned Buick's survival. But five years down the road, consumers are beginning to see just why GM spared Buick.
Over the course of 2013, Buick enjoyed a 13 percent leap in U.S. sales, which has lead to the company's fourth consecutive year of gains, and marks its best domestic sales year since 2006. The numbers look good for 2014 as well; with Buick recording a 19 percent and 11 percent year-over-year sales increase for February and March, respectively.
Encore's a Hit
Buick's biggest and latest boom can be linked closely to the Encore subcompact SUV, which has seen success on multiple fronts. In only its first year on sale, Buick blitzed sales expectations by delivering 31,046 Encore crossovers in the U.S. and a total of 97,311 units globally. The company credits this success to a changing demographic in what middle-class car buyers value in a new car.
Buick listened carefully to consumers, and effectively created this new segment. The Encore offers options for car buyers who are looking to downsize, but not give up on features. While a small luxury crossover hasn't historically been a bestseller, the Encore's success has given Buick a near monopoly in this segment, though new cars like the Jeep Renegade, Mini Countryman and Fiat 500L could be factors.
"Research that we had going into the launch of the Encore indicated that there was a market for a vehicle this size with this kind of content," commented Nick Richards, Group Manager of Buick Communications. "The combination of drivability, amenities, and fuel economy has made this car the perfect mix for what consumers are looking for on the market right now."
A Shift in Focus
The success of the Encore is big news, and not only marks a significant sales victory, but shifts the focus of the brand. Buick has repositioned itself by offering the refinement of Cadillac with the accessibility and pricing of an up-market Chevrolet. It's a delicate balance to keep from overlapping its sister divisions, but right now Buick is on-point.
The Verano and the newly redesigned Enclave boasted their best sales to date in 2013 after delivering 42,012 and 54,330 vehicles, with sales of the Regal rebounding over the past five months following the introduction of the 2014 model. However, it's on a worldwide scale where Buick's sales impact becomes even more impressive. The company recorded over one million vehicles sold globally in 2013 - making it the largest sales year in the company's history. China accounted for the bulk of those numbers with 809,918 vehicles delivered in 2013 (over 78 percent of total Buick sales), making it the most popular luxury brand in the country.
Modest U.S. Gains
While these numbers paint an optimistic picture for the global growth of the brand, Buick's success in the US is much more measured. The division has focused less on appealing to specific up-market demographics, and more on extending the brand to the widest swath of customers. Buick did this by tailoring its products to what consumers are willing to pay, rather than what engineers are willing to include. Apparently it's working too - 42 percent of Buick buyers in the US last year were new to the brand.
"We look at the consumer mentality - it's the customer who's looking for luxury, but may not take themselves too seriously," said Richards. "They're not worried about necessarily just a badge, they're able to look at content versus the badge."
The company's big turnaround is almost entirely related to the all-new hardware and as a result thecurrent advertising campaign, in which people can't pick out a Buick, is a reflection of how much the product has changed.
"There's always a smile at the end of the commercial, and that's kind of the way we look at the brand," remarked Richards. "Regardless of age or other demographics, it's about introducing the brand to new people."
The past five years have revolutionized the brand for the U.S. Buick doesn't have to be the volume division for GM's domestic sales - it has Chevrolet to do that. It doesn't have to be GM's high-priced luxury marque either - again, it has Cadillac. But also, its success globally, especially in China, is the key to its ongoing viability. The result is that Buick free to focus on making premium cars for the middle market, and in the process, preserve a brand that has proven to be worth saving.
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