Bloomberg News

GM’s New Crossover SUV Shows ‘Big as a Buick’ No Longer Applies

December 16, 2011

Dec. 14 (Bloomberg) -- General Motors Co. plans to unveil the new Buick Encore sport-utility vehicle at the Detroit auto show next month, making a statement with the small SUV that Buick’s decades-old image for selling big sedans is a thing of the past.

Buick announced the name of the SUV at a press event in Warren, Michigan, today. The Encore is smaller than the Chevrolet Equinox and GMC Terrain SUVs and is built using a different platform that those two vehicles. Buick this year stopped building the Lucerne large sedan.

The addition of Encore and the Verano compact is a play by GM to make Buick a more relevant luxury brand. The Detroit-based automaker is selling smaller vehicles and packing them with technologies like fuel-saving electric motors to attract younger Americans and Chinese businessmen.

“They need to sell a small crossover and the Verano to bring in younger buyers,” said Jim Hall, principal of 2953 Analytics Inc., a consulting firm in Birmingham, Michigan. “Buick needs to aggressively pull in millennials.”

Buick sales are up 18 percent in the U.S. this year through November. The brand’s sales fell 7.2 percent last month as dealers cleared out inventory of the discontinued Lucerne. Verano production just started and GM sold only four last month.

GM has decided to position Buick as a luxury brand with quiet, comfortable cars to take on brands like Toyota Motor Corp.’s Lexus and Honda Motor Co.’s Acura. GM’s Cadillac sells sportier luxury cars and takes aim at Bayerische Motoren Werke AG’s BMW, Volkswagen AG’s Audi and Daimler AG’s Mercedes-Benz.

Younger Buyers

The large Enclave SUV and LaCrosse sedan have brought in younger buyers. The average age of a Buick customer dropped to 59 years old this year from 64 in 2006, Nick Richards, a Buick spokesman, said in an e-mail. Not counting the Lucerne, Buick’s average buyer is 57.

GM is poised to retake leadership as the No. 1 automaker by sales. The company sold 6.79 million vehicles this year through September, leading Toyota by 1 million vehicles. Volkswagen has jumped to second with 6.17 million vehicles sold.

The automaker is the top seller in China, with Buick as one of its main brands in that market.

--Editor: Bill Koenig, Jamie Butters

To contact the reporter on this story: David Welch in Southfield, Michigan at dwelch12@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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