In 280 BC, King Pyrrhus took on the might of the Roman Army– and won. In one of history’s most insightful strategic assessments, the King surveyed the corpse-littered battlefield and concluded, “one more such victory shall undo us.” Since then, the term “Pyrrhic victory” describes a conflict in which a force expends so much energy winning a battle that it loses the war. It’s a lesson General Motors seems determined not to learn. The latest chapter in this continuing saga of self-delusion: the Buick Enclave. The Enclave is a false promise that illuminates GM’s strategic poverty, and its resulting weakness.
By now, Buick should be dead, its resources folded into the remaining GM brands for the greater good. The fading tri-shield is an icon for retirement home parking lots. The average buyer’s age is 65. U.S. sales have tumbled to just under 186k vehicles in 2007, falling by more than 50 percent in five years. In fact, Americans purchased fewer Buicks in 2007 than in 1937, during the Great Depression. Even Oldsmobile was moving more metal when it was axed in 2000.
But a funny thing happened on the way to the graveyard: last year’s launch of the Buick Enclave. The crossover garnered the sort of positive buzz that was once unthinkable for a Buick. The Lambda-platform CUV has earned accolades usually reserved for luxury imports, with waiting lists and inventory shortages to match. It’s not just the fanboys– even the Wall Street Journal, Automotive News and the Guardian has trumpeted its success.
Some of the resulting optimism for the Buick brand is understandable. Enclave buyers belong to a highly coveted pool, sporting an average age of 53 and median annual household incomes of $130k. By appealing to high earners, the Enclave generates substantially higher revenues than its fellow Lambda triplets. J.D. Power reports recent average transaction prices of $38,479, $3500 greater than the mid-tier GMC Acadia and more than $5600 above the Saturn Outlook. Thanks to Enclave’s sales performance, Buick’s overall transaction prices increased 16.1 percent over the year, substantially outperforming the industry average of 0.6 percent.
The actual sales figures, however, are less inspiring. At its current sales pace of about 45 – 50k units per year, Enclave deliveries lag behind such rivals as Lexus RX and Ford Edge, as well as its badge-engineered brother, the GMC Acadia. Those hoping for a Lambda-based home run will need to find another ballpark.
A closer look at the much-ballyhooed inventory shortages reveals that the General botched the Enclave’s launch. The CUV’s initial scarcity was not caused by staggering demand, as GM had boasted. Rather, a parts shortage was the culprit, suggesting a mismanaged supply chain. Moreover, Buick’s previous CUV experience could be a bad omen for the new kid in town. The Rendezvous also initially outperformed expectations before it fell off the charts, fell into a rat hole and died.
Buick’s ongoing plunge is dramatic enough to make the Titanic look seaworthy. Buick’s sedan lineup is speeding toward irrelevance. Sales in 2007 tumbled 23 percent, as the Lacrosse and Lucerne both posted double-digit declines. 2008 promises to be a repeat; year-to-date March deliveries are down almost 15 percent from last year.
This hemorrhaging poses a palpable threat to the Enclave’s future. The Enclave delivers high-potential customers who are all dressed up with no place to go. The brand is effectively a one-vehicle outpost, incapable of exploiting Enclave’s boomer appeal.
Consequently, Buick’s future rests squarely on the shoulders of the upcoming 2010 Lacrosse sedan. The new car must win over youthful import buyers if the badge is to escape its malaise. Easier said than done. After all, it is the failure of the current Lucerne and Lacrosse that created this dilemma in the first place. A Vegas craps table would offer better odds.
The Enclave is a good soldier, but it was drafted by the wrong army for the wrong battlefield. With its stylish looks and near-luxury positioning, the Enclave embodies just about everything a Cadillac should be. Meanwhile, Cadillac is set to update the SRX and add a second CUV. All this while Chevrolet introduces a fourth Lambda-based CUV that looks remarkably like… the Buick Enclave.
For cannibals craving barbeque, the buffet will not be lacking for choice.
So it’s déjà vu all over again. Instead of acting decisively to rebuild their supreme marque and take it into battle against Lexus, BMW, Audi and Mercedes, GM is dedicating scarce resources to wage a civil war. The Enclave represents an obvious return to the not-so-distant past, when the domestic automaker garbled its branding to grab every sale possible, long-term consequences be damned.
GM can’t afford this kind of success. In their efforts to rescue every badge, GM is winning some battles– and losing the war. If The General is to survive, it must bury Buick, marshal its forces and move on.
Given Buick’s success and appeal in China, burying Buick is not an option; the American demise of the Buick brand would reverberate back into the PRC.
Now, taking all these new wonderful Pontiac’s and Saturn’s and placing them where they should be (G8 = Impala, G8 Ute = El Camino, Solstice + luxury goodies = Riviera, Astra = Metro/Cavalier, Aura + luxury goodies = Skylark), that might have save resources and clarified production. Let Pontiac die and sell off the Saturn dealership franchise to someone who wants it (Chery, Geely, split it between Toyondasan?).
But to beat the dead horse some more, this is GM; ain’t gonna happen.
U.S. franchise law is both state-by-state and federal, and clearly favors the franchisee. Simply shutting Buick would be both hideously expensive and problematic. As it was when The General sacrificed Oldsmobile. Buick SHOULD have been killed, it COULD be done, but it’s doubtful if GM now has the resources or will to do the deed. The consolidation of GM stores into “channels”– Buick, GMC and Pontiac; Cadillac, Hummer, Saab; Chevy (once big enough to merit federal anti-trust action), Saturn (spinning in its an orbit of its own)– is, ultimately, designed to eliminate brands. The problem is, the first grouping should ALL die, the second is illogical (Hummer and Saab have nothing to do with Cadillac or each other) and Saturn was, is and will be a disaster. As Adrian points out, The General's fighting too many battles on too many fronts. Can they afford to re-organize without C11? Probably not. To my mind, the interesting question here is whether or not they’ll fix their brands POST bankruptcy.
I find fault with their advertising as well. I like Tiger, he’s a good guy, he’s inspiring, he’s rejuvenated the sport of Golf and he’s my age so why shouldn’t I like Buicks, too? Because it is not believable.
Tiger Woods has more money than Michael Jordan. MICHAEL JORDAN!! The man bought an island! You mean to tell me that he would chose to limit himself to a Buick and not an LR3? Whether he does or doesn’t is besides the point. He could have a football field size garage chocked full of Buicks and it wouldn’t matter.
Why kick a guy when he’s down and fighting for his life?
It’s a wonder that in a couple of years, Buick will have the full/mid size Enclave, while Caddy drops the SRX in favor of the smaller Vue-based crossover. Why does Caddy make due with the small SUV while Buick gets the big one?
To be honest (and I still maintain that Alfred P Sloan’s model never worked to start with), I don’t see how Buick EVER fitted into Sloan’s family of marques.
Normally, you have everyday brand (i.e Chevrolet) and the upscale marque (i.e Cadillac). I don’t know of ANY car manufacturer who has an “tweener” brand. VW has Audi, Toyota has Lexus, Nissan has Infiniti and Honda has Acura. Nothing in the middle. I fail to believe that the market had a demographic that warranted a brand like Buick.
I am intrigued as to why closing dealerships is so difficult in the United States. In Europe (well, the UK, at least) it’s a very simple equation, you underperform, you get a warning, you underperform again, you get your franchise taken away. If someone could clarify this, I’d appreciate it. From my rudimentary understanding, it all seems stacked in favour of the dealers.
Ths shame is, the Buick enclave is a good looking car and I really think it would be a good idea to stick a Cadillac badge on it and sell it in Europe. Cadillac is floundering in Europe because ITS STYLING IS SO FLIPPING UGLY!!!! Do the Cadillac design team only have access to a ruler? The Buick’s curvy lines would give Cadillac a more appealing product to sell in Europe (if GM REALLY wanted to push the Cadillac marque in Europe, personally, I think they should concentrate on SAAB).
Buick should cease to be (at least in the United States) because Chevrolet and Cadillac should be their main 2 marques, one for everyday, the other for luxury. Keep it simple…..
I’m impressed with the age and income level for the average buyer… actually, almost shocked. On paper, providing it’s a reliable vehicle that keeps it’s value, it should keep them interested in the Buick family come upgrade/replacement time. The key there is BOTH of those things happening, in addition to having a product they’re wanting to buy to replace it with. People in that income bracket typically are MORE sensitive to deprecation/smarter with money, I opine. Anything less than average in those regards is turning them off Buick (and some GM) forever.
Who wants to guess the rebate on this thing in Nov/Dec this year for the 08’s in inventory? I’ll go out on a limb and say $3000-$3500 or 0% for 60 plus $1000 bonus. Anyone willing to guess higher?
Buick had a place in America, back when GM had 50% of the market. People wanted more choices than Chevy or Caddy. Buick and Pontiac looked and felt just different enough to exist. Now that GM’s down around what? 18% or something? There’s no reason for cars with different headlights and grills.
Katie –
Franchise laws are different from state to state, but were written as a kind of anti-trust protection. No one wanted the big three to control everything.
The Enclave sells/leases well in Canada…the market segment lifestyle vehicles that is constantly changing. Most folks want something new and different in that market segement. The lease is up what is new and different.
The Enclave resonates with the market requirements/expectations…that GM can sell/lease a vehicle in the upper reaches of the segment is almost surprising, and a testament to limited brand loyalty in that segment.
At one time in the North American market Buick was an upscale brand…it might not work with cars but for some reason in the SUV/CUV lifestyle market segment its working…even after some of the square box nightmares Buick had a few years ago.
In Canada Buick dealers have always been dualed with Pontiac and GMC…from the same dealer you can get a GMC Acadia which comes across as “professional grade truck” or a Buick Enclave which is perceived as a Buick not a truck.
There are the folks that will buy/lease a Highlander because a domestic brand is totally uncool.
There are the one’s seeking safety in numbers with an RX330 or an MDX.
From Automotive News Canadian sales YTD March 2008
Enclave 958, X5 785, M Class 678, LR3 165, XC90 302, MDX 1396, RX330/400 1119, Q7 264, Toureg 202.
@healinginfluence:
I wouldn’t quite call this “kicking a guy when he’s down,” GM isn’t “down” yet. We can all agree that in many ways they’re hurting, but this article (along with any of the Deathwatches, really) doesn’t carry the same vitriol as kicking someone when they are down does; the editorials here offer insight and perspective as opposed to malice and cackling glee at failure.
(If this is perceived as flaming, by all means, please ditch this comment)
The Enclave has always struck me as strange, and the persistence of the Buick brand proves that the tangled web of GM’s brands refuses to let go. KatiePuckric’s views (shared by many) that GM has too many brands is something we’ve heard too many times, but maybe we need to keep saying it until someone either listens, or, doesn’t. Buick’s showing itself as a struggling brand, on life support, sapping away sales from brands that could otherwise (dare I say it) succeed if given the resources (time, energy, and money).
Now here’s a thought – wouldn’t Tiger Woods be a fantastic masthead for Cadillac instead?
Seriously, if you had 40K to drop on a vehicle would you buy a Buick?
That is the question really. maybe GM is building cars for reasons we can’t understand and we are the customers.
The Enclave is an unequivocal hit for Buick, bringing in younger, more affluent consumers and selling at a pace above all competitors except the well entrenched Lexus RX. The Enclave outsells the X5, XC70, M, and even the MDX. That’s pretty impressive for a new model from a ‘damaged’ brand.
Similarly, I wouldn’t count out the 2010 LaCrosse. The vehicle is similar to the Malibu and Aura (you know, the last two NA Cars of the Year), but based on an updated platform engineered by Opel. Those are good bones to work with.
Buick achieves sales success brands like Infiniti and Audi can only dream of, and with just 3 models.
All this carping about too many brands strikes me as old world thinking. We don’t complain that LVMH or P&G have too many brands, so why GM?
10 brands may well be too many for one country, but think about it globally. 10 global brands, each good for 1 million plus units annually($20+ billion!) sounds like an appopriate goal to me.
If having multiple brands appealing to separate consumer niches is such a terrible thing, then why have high margin firms like Toyota, BMW and Benz been rushing new brands to market?
Given my demographic (30 years old, Male, healthy household income) I am what a brand wants. I would never consider a Buick. It would be last on my cars-to-consider list, behind Mercury.
Isn’t Buick doomed anyway because its demographic is latterly dying-off?
If you want a well-made, rolling isolation chamber, buy a Lexus (at least not an “F” variant).
Buick could make a semi-comeback if they brought some of the models they are selling in China over and ditched every car they currently sell in the US.
The line up is terrible – there is nothing in their line up I would consider, including the Enclave (although I do think it is a good vehicle).
If the 2010 Lacrosse is another badge engineered model as stated, woe be Buick. The current Lacrosse is a badge engineered product that went no where fast.
Now here’s a thought – wouldn’t Tiger Woods be a fantastic masthead for Cadillac instead?
Now that would make a whole lot more sense.
Buick achieves sales success brands like Infiniti and Audi can only dream of, and with just 3 models.
I’m a little doubtful, do you have a link to or an excerpt (with a source) of something that supports this?
Here is the first Epsilon II. Looks pretty nice.
http://jalopnik.com/379602/2009-opel-insignia-revealed-early-sans-carefully-placed-tape
IMHO, it is far more useful to compare a vehicle’s platform sales against a competitor’s platform. So Epsilon v. Camry/Accord, Lambda v. Lexus/Toyota, Delta v. Civic/Corolla, etc.
I think there is redeemable value in the Buick brand; as a brand of American pseudo-luxury cars. They should not deviate from this. The Enclave and Lucerne fit the mould. The Lacrosse comes up short, but the next version can fix that, as it will be the 1st Epsilon II car in the states, and thus a step up from the Aura/Malibu. There is tremendous value in exploiting traditional American car characteristics (soft ride, comfy seats, spacious) and just making them look really good and building them well; which the Enclave achieves, and the Lucerne does as well, in my opinion (though it could easily be better).
No, Buick should never sell Chinese made or designed cars here…leave that for China, where it is a great success. The day Buick sells Chinese cars in the US will be the day that they have forever destroyed their historic brand. Should Jaguar sell rebadged Tata’s, for christ’s sake?
Cadillac cars have gone in a more international direction (CTS/STS), and will need to do so in order to compete with their market and win the toughest buyers. They should aim for the top, and just settling for traditional American cues won’t get them there. However, they can, and should, always sell cars of American design, such as the Escalade & Sixteen.
Pontiac is the one who deserves to die, as they are nothing. Saturn could be a good fit for GM’s European lineup, but they deviate by making the Outlook a Saturn, when it should have been a Chevy.
I am in the typical age bracket that Buick has as customers. And I would never consider a Buick. I am 64, retired and have decent income. But I do not consider myself an old fart. Buying a Buick is like carrying a sign on your back that you suffer from some kind of dementia or just like being a old codger. Seems like the people that I know in my age bracket are buying Lexus or some other kind of Japanese products. GM is running out of time. They cannot afford to keep wasting all this effort/money on so many product lines. But they are GM. They didn’t get to where they are today by building the products most americans want!
I can see why having so many brands is bad for GM, but I can also see a reason for having them.
For instance, the Camry sells in 3 trim levels that can be roughly equated to GM Brands:
CE (Cheap) = Chevrolet
LE (American Luxury) = Buick
SE (Sporty) = Pontiac
So if Buick sells 3 cars – Epsilon II based LaCrosse/Allure, Zeta based Lucerne, Lambda based Enclave – I think they will be successful for the market they are aiming for.
Meanwhile, Cadillac is set to update the SRX CUV sometime around 2011 (based upon the Epsilon platform) and plans to add a second CUV (based upon the Theta) as well.
As has been mentioned, Cadillac’s plans are to drop the SRX after 2009. They are not updating it. Also, it’s based on the RWD, premium (i.e. Cadillac-only) Sigma platform, shared with the CTS and STS, not the Epsilon platform (i.e. cheap FWD = Malibu/Aura/G6/future LaCrosse/future Suzuki Kizashi/Vectra/future Insignia).
I’m also about 20% sure the upcoming, stupidly-named BRX small CUV will not be based on the cheap Theta platform (Equinox/Torrent/Vue/Terrain), but I could be entirely wrong about this, as the Provoq concept looked like a Saturn Vue with a Cadillac grille tacked on.
SherbornSean :
You said…
“If having multiple brands appealing to separate consumer niches is such a terrible thing, then why have high margin firms like Toyota, BMW and Benz been rushing new brands to market?”
You ask a good question. My intial thought without trying to be too harsh is that those brands are growing and have shown themselves to have the ability to “get it done” when they introduce a brand. On top of it those brands they introduced had clear direction/focus on a niche. The goals of each were also clearly defined.
You also mentioned the Enclaves sales versus the X5, XC70, M, and MDX. While I’m sure Buick would spin it differently I simply don’t think they’re getting a lot on conquest sales from people who considered these brands/models. I could be wrong but none the less I’d be adimant that somebody buying an X5 or an MDX considers an Enclave. Some of those reasons don’t put the Enclave in a bad light but they also speak to the differences in who the target market is for each brand.
With all of that said I think the Lambda platform is pretty good and the Enclave is the most aggresively styled cuv/suv that i’ve seen in some time and kudos for Buick/GM in doing that. It is a BEAST though when you get next to it.
In sum, GM’s as good as dead.
Are they even replacing the Lucerne? Both it and the K-Body DTS are dying within the next two years (hopefully – they’re already extremely outdated), and GM is very reluctant to bring more RWD Zeta vehicles to the US (i.e. no Holden Statesman-based Chinese Park Ave for us).
Robert Farrago:
To my mind, the interesting question here is whether or not they’ll fix their brands POST bankruptcy.
Could/Would the presiding bankruptcy judge decide which dealers get whacked? Given the Delphi fiasco, I doubt a clear franchise decision could be reached in under 3 years…
SkiD666
But the difference is that one Toyota dealer will carry all 3 Camry levels. Toyota won’t create a separate brand and dealership for each.
The problem is what happened AFTER GM stratified into brands. Each of GM’s brands demanded a full range of vehicles. The brand didn’t stay focused on the market slice they were initially assigned.
GM found themselves supporting multiple brands, that when stacked next to each other, had strata that matched each other. This GM spends a lot of time and energy selling the same car to all brands (re-badging). The brands end up competing with each other instead their real competition.
Robert is correct…
You have to stop thinking about Buick sales as Buick only. Buick is only PART of the BPG channel. I know…I know…it’s a mess.
BPG only makes sense inside the RenCen. “Hey, let’s PRETEND Buick-Pontiac-GMC belong under the SAME roof. And if we PRETEND it hard enough, our buyers will start to get it.”
So BPG has a truck componenent(G), and near-luxury component(B), and a sport component(P).
It’s the perfect storm of too many brands, too many models, too many dealers. GM’s solution is to bundle them into one.
The disconnect is obvious. Last night, I had a conversation at the gym with one of the trainers. He had a Chevy and was considering another GM product. Now, let’s see…what does GM have again?
So I asked him to tell me what, exactly, does GM sell in the US?
He managed to get Chevy, GMC and Cadillac.
Pontiac? You’re kidding! Buick? Oh yeah, that’s right. Saab? No way. Seriously? Hummer? Didn’t know that. They’re stupid anyway.
Try it yourselves, everyone.
Ask friends and family: What’s GM sell? What brands? And, for extra credit, gimme a couple models of each.
We’ll compile our non-scientific results and email ’em to Lutz, who a few years ago got roasted for saying the truth, “Buick is a damaged brand.” Had the General killed it then, we wouldn’t have the Korporate Kool-Aid solution we see today.
I think that the GM executives are subconsciously loathe to drop Buick because it was the original cornerstone of the Generous Motorus empire started 100 years ago this year by one William Crapo Durant (no rude jokes, please).
But in the real world of car buyers and real world of finance –
-Saturn has never made a penny for General Motors. It is like a blood sucking leach. Pull it off and kill it.
-Pontiac’s heyday was from 1964 through about 1979. It’s a dead brand walking now. It needs to be euthanized.
-Buick is, as mentioned, dead in north america. When your average buyer is 65, you’re in trouble, because that means 1/2 of them are OVER 65. How long do you suppose the average person lives and buys new cars? In plain english, many Buick customers are now on their last or next to last new car purchase. The brand can live on in China; fine. Vauxhall is UK only. Buick can be China, only. They’re developing their own lines, anyway.
-GMC being simply a badge-engineered Chevy pickup and SUVs, is probably not viable enough to carry a whole dealer network, especially with truck sales going down, down, down.
The catch-22 situation is the dealer networks. Killing off Saturn AND Pontiac-GMC-Buick would cost so much that it would kill the company (as mentioned elsewhere, a Phyrric “victory”).
Going Chapter 11 bankruptcy first with a mind towards parring down the dealer network/getting rid of Saturn AND P-G-B, would mean that a good 1/5th of the potential buying public would simply never consider buying a GM product (from a bankrupt company). That could bring GM’s “fortunes” down from 18% to more like 14%.
GM are toast. A dead company walking. My prediction is that SAIC-GM of China will BE GM at some time in the future, and NA operations will simply cease to be.
For instance, the Camry sells in 3 trim levels that can be roughly equated to GM Brands:
CE (Cheap) = Chevrolet
LE (American Luxury) = Buick
SE (Sporty) = Pontiac
Yeah, but they’re all Camry’s in the end. It’s a lot less noise for the average automotive muggle to sift through.
GM’s branding hierarchy only makes sense to people in The Ren Center or regular posters on GM discussion forums. Outside of that, Pontiac and Chevrolet are the same thing, Buick is for dinosaurs, Cadillac Escalades are for rappers, Hummers are for small-dicked wannabes and the rest (Saab, Saturn, Cadillac sedans) is whatever (whatevs…man).
All the doomsayers only see NA Buick sales. With its international sales, GM would be insane to bury Buick. Cadillac is not the same as it used to be. Caddy used to be traditional luxury. Now it is either SUVs for gold-dripping hip-hop crowd (Escalade) or strangely carved in a desperate attempt to “be cool” CTS (anybody still buys DTS?). Buick is the traditional upper-end brand. Make some improvements to it, perhaps put it back on a RWD platform, and keep it around. The population is not getting any younger. If executed well, it could be a competitor to Lexus (for less money).
On the other hand, what purpose Saturn & Pontiac serve these days is completely beyond me.
GM also has to get off the civil war wagon (as author pointed out). Stop cannibalization and make Chevy distinct from Buick. Make it the GM’s “Volkswagen” (without the Phaeton).
I do not know what companies have to report to the SEC besides executive salaries, profits and a host of other things. One suspects that in addition to losing market share, market cap, having enormous debt and huge financial obligations that GM may not have a secret super cash hoard as some speculate upon. The cash is flying out the door at a rate that is simply unsustainable even for GM. It may not be possible to know the true state of GM’s financials with the information presently in the public domain but I feel that GM is gone beyond the point where it can afford the kind of brand/franchise kill-off it needs to survive. If that is the case, only CH11 can help it now. GM is like a ship heading at full steam for a beach in the hope that beaching it before it is overwhelmed by flooding will save it. It may work but I doubt it. GM is caught between a rock and a hard place.
If having multiple brands appealing to separate consumer niches is such a terrible thing, then why have high margin firms like Toyota, BMW and Benz been rushing new brands to market?
Having multiple brands is not a bad thing per se. It becomes a bad thing when you’ve got two main brands and half a dozen niche brands. We’ve got a sporty brand made redundant by the sporty lines in the other brands (SS, Red Line, Super, and V-series), two brands for European imports or European-esque cars, two brands for trucks and SUVs, and a brand for soft old people cars.
The problem is that GM’s eight brands don’t really appeal to separate consumer niches. There’s too much overlap and too little differentiation. When there are three or four versions of all the most popular models, it becomes impossible—or at least extremely difficult—to make them distinct enough to justify their existence. And GM really doesn’t need to make things more difficult on itself.
SCMTB,
If you are in the market for a comfy, 3-row Crossover, the Enclave and MDX are certainly on your list and definitely comparable. I should know, my wife drives a 6 year old MDX and if we had to trade it in today, the Enclave would be the most likely destination. For us, alternatives would be the CX-9 (not luxurious enough) the X5 (too snobby and unreliable) and the R-class (too hearse-like).
To others who think having 65 year old clients is a problem,
I really have to question this one. Yes, they will die soon, but we all have an expiration date.
I don’t see any problem with courting the segment of the population that is growing fastest and has the most disposable income. In most circles, this is called smart marketing.
My dad was a GM man his whole life, the cars I remember growing up include a 65 El Camino, a 68 Camaro, a 74 Blazer, a 77 Cutlass and then he drove an Astro mini-van until his retirement. At retirement, he fulfilled his lifetime dream of buying a big plush Buick. At 28,000 miles that Buick’s faulty transmission left my 70 year old father stranded in the middle of nowhere. He traded it before the warranty could expire and will never drive a GM again. If my dad thinks that GM is dead, its probably dead.
The problem is what happened AFTER GM stratified into brands. Each of GM’s brands demanded a full range of vehicles. The brand didn’t stay focused on the market slice they were initially assigned.
Exactly! In the 1970s, Lordstown was pumping out the H-body Chevy Monza, the badge-engineered H-body Oldsmobile Monza (Starfire), and the badge-engineered H-body Buick Monza (Skyhawk). When they cut over from the H-body to the J-car, we got the Chevy Cavalier, the Pontiac Cavalier (J-2000/Sunbird), the Oldsmobile Cavalier (Firenza), the Buick Cavalier (Skyhawk), and, finally, GM’s greatest badge-engineered crime against nature ever, the Cadillac Cimarron (Cavalier).
MENNO-“The brand can live on in China; fine. Vauxhall is UK only. Buick can be China, only. They’re developing their own lines, anyway.”
One step further and you are with me.
I have posted this idea before: Gm should SELL BUICK, the name/brand, to the CHINESE. They have someone who actually wants it! Nobody else on the planet under retirement age (and precious few over) seems to.
Take the proceeds and use them to buy out the dealer base (hopefully they will get enough to clean up the mess). Could be a “win-win”. Or at least a “tie”, which is a lot better than they are doing with buICK now.
Bunter
Pyrrhus fought the Roman Republic, the Roman Imperial Army did not exist at that time. The first Emperor was Augustus beginning 27BC, hundreds of years later.
I’ve driven a LaCrosse and a Lucerne. The LaCrosse sucked. Worst interior materials ever. The Lucerne was nice actually, and very comfortable. The salesman should have been happy to have someone in my demographic checking out their cars. Instead, he was a rude prick, so much so that I wrote to GM and complained (something I hardly ever bother with).
When was the last time Buick had a car relevant to middle aged and younger market? I’d say the G body Regal that ended production in 87 (esp the GNX obviously). They abandoned that market completely and went straight to a retiree-only market segment. Getting the younger segments back after a 20 year hiatus is going to be tough.
Looking into my crystal ball, I see the GM of 2013, sans-Buick:
–Hunk of Korean subcompact junk: Aveo… completely outclassed by everything.
–Euro compact sold at a loss: Astra/Cobalt/Pontiac whatever… GTI/Civic/3 buyers ain’t biting.
–Modern midsize: Malibu/G6/Aura… Multiple marketing budgets for one cut-throat segment.
–Bloated full-size FWD fleet-queen: Impala, still built on the now-25-year-old W platform.
–Retro insane gas-guzzling RWD with POS interior: G8/Camaro. Yeah.
–Small CUVs: Vue + company. Multiple marketing budgets for one cut-throat segment.
–Large CUVs: Lambda orgy. Multiple marketing budgets for one cut-throat segment.
–Small pickup with accompanying BOF SUV. Low volume, high margin.
–Large pickup with accompanying BOF SUV. Lower volume, higher margin.
–Dumbed-down Caddy to sell to former Buick customers and urban aspirational buyers.
That there is a winning line-up. Why does everyone keep predicting GM’s death?
vigillinus :
Pyrrhus fought the Roman Republic, the Roman Imperial Army did not exist at that time. The first Emperor was Augustus beginning 27BC, hundreds of years later.
D’oh! Text amended.
menno-Saturn has never made a penny for General Motors. It is like a blood sucking leach. Pull it off and kill it.
Remember that Saturn today is an utterly different brand from Saturn’s first 15 years.
I can see GM viable in a Saturn-Chevy-Cadillac formulation, imitating the Scion-Toyota-Lexus setup that works so well for ToMoCo. Maybe even retain GMC for whatever they define as “professional grade” trucks. BUT, as you point out, the operative question is how to get there. It’s a catch-22.
Some hybrid solution of “mild bankruptcy,” aka “nothing is f^&*ed, we’re just doing some ‘house cleaning’,” combined with brand reduction, might be possible. Get out of dealer contracts, maybe some union obligations, but HONOR ALL WARRANTIES. Spin it appropriately. Remind the public how many airlines operated under 11 and survived (don’t mention the ones that didn’t).
And come out at the end of it with Saturn-Chevy-Caddy.
That would be my strategy at this point.
Well, who says Buick needs to appeal to younger buyers? Isn’t their focus on satisfying older demographics a good thing? So what if the LaCrosse or Lucerne don’t appeal to younger buyers? Buick shouldn’t cater to a younger crowd, anyways. The brand would lose focus!! That said, near-luxury brands like Buick and Acura are gross. They shout out at the world, “I want to look prestigious and have an exclusive car but I’m too sensible (and boring) to actually pay for a luxury car.” Oh, and Tiger Woods isn’t black, he’s Asian!
Enclave might be big as a cloud seating 7 Zeuses, yet with a silver lining shining. This buick at last has got all a pre-gargantuan sized SUV needs. It has even quality detailing- Chromed, thin, precisely stamped weather strips, Xenon lights with european style peeping- behind- the -corner feature, remote gas cap, digital A/C , leather , french seams, TPMS, touch -screen, HUD,6-speed auto, DOHC, etc.It is well poroprtioned and every detail is convincing, unlike some german coupe . THe same good words I could say about Lucerne, except about that 4-speed auto, and FWD. Now what Gm shouldn`t have done is to water down enclaves value by copy-pasting the exterior to a Chevy. Enclave is definitely built better than any british Land or Range rover.As to fighting with Audi Q7, I would ..stay silent.
I know that nobody will believe it but as a long term dealer the Enclave is selling just over 50% high end imprt conquest sales! We take in Lexus,Mercedes and infiniti’s. Average age of these buyers is in the 40’s. Style brings them in! Most people leave saying they didn’t think they would drive a Buick. However it was by far the best looking and performing car they looked at. Wait till you see the new LaCrosse! The current LaCrosse is very so-so however it was a rush job from a mistake that almost came out. The Lucerne is a great car in a blind contest. However is not bold enough to over come Buick’s old image. Maximum Bob is doing his job.
The consolidation of GM stores into “channels”– Buick, GMC and Pontiac; Cadillac, Hummer, Saab; Chevy (once big enough to merit federal anti-trust action), Saturn (spinning in its an orbit of its own)– is, ultimately, designed to eliminate brands.
I thought the purpose of the combined channels was to make brands possible again. Under the old structure, (as a coupld posters have already pointed out) each dealer wanted a vehicle for every market segment. Combining the channels makes it possible (in theory, if not practice) to make separate brands that a single dealer can sell. Sporty/exciting cars = Pontiac. Near Luxury = Buick. Trucks = GMC. Combine it with basic transport = Chevrolet and you’ve got a dealership that’s in most market niches, and can survive. Yet each brand could be different, with no overlapping models.
Buick is different from Cadillac. It is (or was) a “doctor’s car”. Something an accountant would drive. Or a priest. That is, Caddy is bling bling, Buick is understated luxury (also slotting slightly below Caddy). Problem is, their sedans don’t sell, and the Enclave has the burden of replacing three seperate models (Rendevous, Terrazza, and Rainer). Now, it’s sales are about equal to three combined-albeit on their way out-and that’s as good as could have been expected of it.
In any case, due to the franchising laws, all GM can do is try to stick it with GMC and Pontiac and hope for the best. Since it does have a niche as a “doctor’s car”, as the anti-Cadillac, keeping the brand around makes sense, as long as it’s in a combo dealer with GMC and Pontiac.
Now, if you a GM brand that makes no sense whatsoever, take Saturn. Please. Saturn made no sense when it only sold Corolla-clones, and it makes no sense now that’s it’s trying (and failing) to go upscale, especially since it is keeping the no-haggle pricing policy (and sells stuff that, in slightly disguised form, is also available at other GM dealers that do haggle). It’s a big hole where GM throws it’s money into, always has been, always will be.
Haven’t there always been middle aged and elderly people? Is there really something wrong with having a car marketed to this demographic? Is it really impossible that someone in the 30s today might want a Buick 25 years from now? As others have pointed out, is the fastest growing demographic with the highest disposable income really a group that GM should ignore?
I note that the average age of Enclave buyers is 53. I don’t consider that old. (Of course I’m 51, so I would say that).
Seems to me the Enclave does exactly what Buick was always meant to do – be a car for someone who’s been financially successful and wants to show that, is comfortable, and high quality. If GM can get the rest of the Buick line-up doing the same thing, then they’ll have Buick squared away. That would only leave 7 other divisions that need fixing.
If they want to kill something kill Saab (or keep it in Europe), kill Saturn, and kill Hummer.
In case you young folk forgot, almost 50% of Americans will be in that age bracket in the next 10 years. Remember the Baby Boomers? And who do you think has all of the money to spend??? Not the younger people, but those who have had their children, got them out of school and no longer have dependents. It is not always about you.
( Damned Gen X kids, think that they are they only ones that count……)
Then again I will never own a Buick ever, so I don’t fit GM’s demographic either, but it is a market a huge one to target.
I know it cuts against the sentiment here, but I really don’t think GM has to axe another brand.
When you think about it, lots of companies fragment out even without going to a totally separate brand. Take Toyota – there is Toyota, Scion, and Lexus – but now there is a new brand-let of Lexus for performance. That makes 3.5 brand “identities” for the Mothership to shepherd around. Nissan just has Infinity, but not really. Its part of the Renault universe and I have no idea really what that entails, but its not just two brands to be sure. Plus, Nissan does not make a true exotic (GT-R isn’t a Ferrari, sorry) nor a true luxury car. Honda is a good example of how to cannibalize yourself with only two brands. BMW is hardly focused; they’ve got Mini and Rolls-Royce, and make “BMW’s” in price segments and “lifestyle niches” that people will cross-shop with these other brands. Also, brand identity is one of the few provincial things left in the globalized car biz. Mercedes makes luxury cars for sure, and in Europe that is the perception as well. But in Europe I can also get my Benz garbage truck – ’nuff said.
If I were instantly made Dear Leader of General Motors, the first order of business would be a Stalin-like reign of terror throughout the upper-management suites, followed by bankruptcy. But the bankruptcy re-org I would have in mind would be to spin-off various brands in the stock market as new publicly traded companies, and probably keep Chevy and overseas holdings in-house. Split the remaining equity in all these new company/brands (and associated liabilities, etc.) between open-market shareholders, the Mothership, and the dealers for the brands themselves. Much of the capital cost for developing new cars (primarily the engine, tooling, and jumping Government hoops) would be borne by GM itself and sold through Chevrolet models and the overseas arms. However the brands could employ these various bits for their own rides, and be in control of product development and so forth for their respective vehicles. If Buick decided to take a big risk on the Buicktron or whatever, it would be their risk. And if it was a rousing success, some suit just couldn’t steal the platform to attempt a patch-up for Pontiac. Also, when/if brand fails it fails on auto-pilot via the markets, and the dealers have to eat that…no sueing some giant over-arching company for making the decision to axe the brand. It just dies.
Each brand would fly or die by their own efforts and financial situation. Fratricide would still be a problem, but would sort itself out quickly as it would no longer make sense (even with the nonsensical logic currently employed at RenCen) for these different companies to dilute themselves merely to subsidize the failure of another corporate division. At least that would be the outline for what I would do. Also, fragmenting the company that way still keeps it all “GM” for what that’s worth, but will slowly break the union down as well. Each company will be looking for its own deal with the union, and it multiplies the chances you are going to get a management team in one of these companies that is willing to bust the union in-house. When that happens, it will be like pulling the orange out of the bottom of the pyramid at the grocery store – it will all come crashing down.
To me, Buick’s brand image is a lot like Brooks Brothers. When I was in my 20’s, I thought Brooks Bros. had good quality stuff, but the style was old fashioned, more for middle-aged and old.
25 years later, I’m starting to get it. Not clear to me whether the product/brand has changed, or the buyer.
Thanks to everyone so far for your commentary. You’ve managed to cover a lot of ground here, so I’ll try to address a few general points that might address many of the comments:
morbo : Given Buick’s success and appeal in China, burying Buick is not an option; the American demise of the Buick brand would reverberate back into the PRC.
It’s a possibility, but I don’t see this as being problematic, any more than the fates of Holden or Vauxhall are of much concern to us. Buick has developed its own brand identity in China, for better and for worse (there may be more on that later). If anything, Buick’s sinking American sales haven’t done anything to deter the Chinese from buying them over there.
Michael.Martineck : Buick had a place in America, back when GM had 50% of the market. People wanted more choices than Chevy or Caddy. Buick and Pontiac looked and felt just different enough to exist.
That’s exactly the implication of the article, so thanks for that. As it stands now, the market can’t support this many brands from one manufacturer. It worked for awhile in the old days, but it doesn’t work anymore.
Domestic Hearse : BPG only makes sense inside the RenCen. “Hey, let’s PRETEND Buick-Pontiac-GMC belong under the SAME roof. And if we PRETEND it hard enough, our buyers will start to get it.”
Absolutely. The Buick-Pontiac-GMC grouping is just the result of cobbling together enough historical baggage for a long vacation.
This plan makes me think of Peter Drucker’s famous exchange with Jack Welch, when Drucker was engaged to provide him guidance with what to do with That Other General (General Electric.) Drucker didn’t say much, but posed two questions: “If you weren’t already in a business, would you enter it today? And if not, what are you going to do about it?” Welch followed that advice, and obviously to good effect.
It’s pretty clear that nobody in his right mind would start a business today with the goal of doing what Buick is doing now. That alone should make everyone question whether it is worth keeping. If the target market is all wrong, the brand is tainted, and there are better alternatives, then you have to wonder why it’s worth the bother.
Dynamic88 : Haven’t there always been middle aged and elderly people? Is there really something wrong with having a car marketed to this demographic?
It’s a problem because it’s a money loser. The average American will purchase about twelve cars in his or her lifetime. The goal of any brand is to build a reputation that will move as much product as possible to an existing customer base, because it is easier and cheaper to sell to people who already like you.
It’s much more costly if you are trying to sell a new customer their 11th and 12th than it is to sell them their 3rd or 4th car. If you can sell the third car, you’ve got a shot another nine sales, but if you sell the last one, you’ve invested a lot of money and brain damage just to earn one sale.
You can do the math with this. In this scenario, a company like Buick is going to have marketing costs that 5-10 times higher per car sold than would a company like Honda. If Honda can squeeze 30-40 years worth of purchases out of each customer, it can’t help but be more profitable. The elderly could make it up for it if they are spending the big money, but no company can expect to make a profit selling unpopular vehicles with heavy incentives to customers making their final purchase.
Katie said “I still maintain that Alfred P Sloan’s model never worked to start with”. Um, yes, but only if you don’t count the years from 1920 to 1980. For many decades GM was so successful it worried that the government would break it up (like Standard Oil and the original AT&T).
Buick declined because GM forgot what a Buick should be. Take a look at this:
http://www.connorsmotorcar.com/48Buick.html
A far cry from, say, an ’87 LeSabre, eh? It seems the Chinese understand Buick’s heritage better than RenCen does.
P.S. Bonus points to menno, for remembering Billy Durant’s middle name, and that a century ago Buick was the foundation on which GM was built.
I see a way out for GM, but it would mean tossing the dealers over the transom. There is nothing legally which requires GM to provide a full line of vehicles. There are plenty of brands which are out there selling niches successfully: Porsche, Jeep, GMC and Subaru. Why does GM need a full slate of vehicles? They could just chop their lineup unilaterally and let the chips fall where they may. Only fleet vehicles and a few rebadged Holden’s for your Pontiac dealership? tough luck. Only two vehicles for your Saab dealership? tough luck. Only rebadged Opels for your Saturn dealer? tough luck.
I think in the short term this would be very painful for both GM and the dealers but within five years GM would have both stronger dealers and stronger brands. With half as many models GM could focus more on the interior details. In my experience, it’s the lack of attention to detail in the interior that kills GM vehicle sales. Well, that and the crummy cars that most Americans drive from the rental agency (I bet 50-100 times as many people have driven a G5 from the rental place than ever will test drive one).
50merc
Katie said “I still maintain that Alfred P Sloan’s model never worked to start with”. Um, yes, but only if you don’t count the years from 1920 to 1980.
Coincidentally, those are the years where customers had the choice of poorly built crud from Chrysler, poorly built crud from Ford and poorly built crud from GM.
The moment any REAL competition came along, GM’s model collasped.
In Europe, GM (for many years) only had the Vauxhall/Opel brand and it grew organically to take a significant share of the market. Now, they’ve got Saab, Cadillac AND Chevrolet, Vauxhall/Opel’s market share is eroding…..cannibalisation, maybe?
Sloan’s model also devalues any brands a company may have. For instance, I reckon Chevrolet and Cadillac would have more customers if Buick wasn’t around. Because (as I said in my original point) Buick is a “tweener” brand. If they got rid of Buick, then the customers would either go to the bottom end of Cadillac or the top end of Chevrolet adding more value to the 2 marques.
It’s a problem because it’s a money loser. The average American will purchase about twelve cars in his or her lifetime. The goal of any brand is to build a reputation that will move as much product as possible to an existing customer base, because it is easier and cheaper to sell to people who already like you.
It’s much more costly if you are trying to sell a new customer their 11th and 12th than it is to sell them their 3rd or 4th car. If you can sell the third car, you’ve got a shot another nine sales, but if you sell the last one, you’ve invested a lot of money and brain damage just to earn one sale.
You can do the math with this. In this scenario, a company like Buick is going to have marketing costs that 5-10 times higher per car sold than would a company like Honda. If Honda can squeeze 30-40 years worth of purchases out of each customer, it can’t help but be more profitable. The elderly could make it up for it if they are spending the big money, but no company can expect to make a profit selling unpopular vehicles with heavy incentives to customers making their final purchase.
I disagree. First because the cost of aquiring the customer isn’t supposed to be the cost of getting them to try their first GM car ever when they are 59 years old. They were supposed to have bought Chevys when they were young and struggling, then moved up the line as their income allowed. Maybe a guy never makes it to Buick (much less Caddy), maybe his success in life only allows him to move up to an Olds. But it shouldn’ be highly expensive to get him if he’s been happy with his Chevies and Pontiacs.
Secondly, this idea that people will buy all 12 or 14 of the cars they buy in a lifetime from one company is a marketer’s pipe dream. It doesn’t happen. People are fickle, and their desires change. If a company (such as Honda) has a well crafted brand image then it can’t appeal to everyone – or even the same people as they change. I love Hondas, and likely will buy Honda cars in the future. But they don’t do any decent trucks (the ridgeline is silly) and there is no status to owning a Honda. Maybe someday I start t care about status symbols in addition to reliability – then where do I go? Accura maybe, if Honda was managing that brand correctly. Buick, just as likely.
Third, the average age of the Enclave buyer is 53. And the income level is such that they likely buy more than 12 cars in their lifetime. These people may well buy 5 or 6 more cars in their lifetime – 5 or 6 after age 53. It almost goes w/o saying that these are two car families. If Mrs. 53 likes her Enclave, then Mr. 53 just might buy a Buick when the time comes for a new ride.
In short, you may as well be saying there is no sense in marketing to older people. But if you only market to the young, you’ll find you loose your customers as they age.
@CarnotCycle
Nissan just has Infinity, but not really. Its part of the Renault universe and I have no idea really what that entails, but its not just two brands to be sure.
Renault, Alpine (although there is no current Alpine model), Nissan, Infiniti, Dacia, Samsung.
Katie,
So tell us what affordable quality vehicles were availble anywhere in the world between 1920 and 1980? Certainly weren’t any other than cars that were way out of the common person’s price range.
The model fit the times.
…only 1 re-badged Chevy Trailblazer for your Isuzu dealerships?
TOUGH LUCK!!
Only $1000 for a head-job on that Wonderful “Dr’s Standard” Iron Duke 4 banger…and nope, we won’t cover it under warranty!?!? You mean, ME…your PAYING CUSTOMER (with the Key Word of the day being “CUSTOMER”)????
TOUGH LUCK!!!
http://www.haveparts.com/98skylark1.jpg
The F-U attitude of GM is coming home to roost. And while building a nice CUV with a “Buick” badge can indeed be sentimental (re. the founding of GM), where was the “sentiment” towards your paying customers, there GM…and I mean for the past 3 decades (or more)???
TOUGH LUCK!!!!
Queensmet,
That’s the point! GM’s model held up because there was no competition! When competition came along, it fell apart!
Just because something exists, it doesn’t mean it works!
For 100 years, people thought vacuum cleaners with bags worked, until James Dyson proved that they work WITHOUT bags. Now by your logic, because bagged vacuum cleaners were around and sold they must have worked, but the fact is they didn’t; it’s just nothing else was available. When some competition came along, the bagged vacuum cleaner market collapsed…..
Another way of looking at it is Delphi.
For years, they were under the wing of GM. Then, they got spun off from GM; a few years later, they entered bankruptcy. By your logic, Delphi existed, so therefore, Delphi’s business model must have worked? No, it didn’t. It only existed because it didn’t have to fend for itself against competition. When it did, it fell apart, their business model didn’t work.
CarnotCycle
Nissan just has Infinity, but not really. Its part of the Renault universe and I have no idea really what that entails, but its not just two brands to be sure.
Not true, Nissan and Renault are two separate brands. Renault cannot (and will not) use Nissan’s brands and vice versa. One of the founding principles of the Renault-Nissan alliance is that both companies are separate*. They may share components or even offices, but not marques.
* = http://www.renault.com/renault_com/en/main/10_GROUPE_RENAULT/60_Acteur_mondial/10_Alliance_Renault-Nissan/
Let’s stick to something a little more relevant than sucking vacuum cleaners:
I am old enough to remember when the first Japanese cars came out here in the US. Here’s the logic at the time…and it was widespread:
“You can’t rebuild those 4-cylinder cars the way you can a good ‘ole American V8, there honey chil’ !!!”
So, while even though the US had a fleet of V8’s running around….they TOO were “NOT WORKING”.
I mean, it was commonplace to have to rebuild the damn thing at 80K miles!!!
Sloppy engineering at it’s heyday.
Well guess what? They were partially correct…because one never NEEDED to rebuild those 4-cylinder engines!!! People routinely broke 100K on them and some ran past 200K!
So- here it is …year 2008…and Ford is “BOLDLY” pronouncing they are FINALLY on par in terms of quality with Toyota!
Oh, what a Feeling!!! I feel like jumping and hopping my way down there to the nearest Ford dealership only to be financially taken-advantage of.
These are the sweetest of days…when even a Hyundai designs a 4-cylinder to 300,000 mile specifications.
Now back to our program: Goodbye GM, your soap opera is getting mighty tired.
This sentiment will certainly upset some but here goes.
It is my firm belief that GM, Ford, and Chrysler only survived this long due to ignorance and loyalty of car buyers who either didn’t know any better or were going to buy American no matter what because they’d been hoaxed into believing it made sense.
My father back in 1989 purchased a very low mileage 1986 Honda Accord LX. This was my fathers first foray into Asian brands. The car he was getting rid of was a Pontiac 6000 DIESEL (the 4.3 V6 that was actually designed as a diesel – great MPG’s but not much HP and reliable outside of a small o-ring problem with the fuel pump). My father wasn’t known to purchase used but did so based on the reputation of Honda, and he knew the seller. Most importantly my father was sick and tired of GM. At 80k miles the REVERSE went out on the tranny. Obviously out of warranty my father wrote a letter to GM to plead for some assistance. He got a nasty letter back. Not just a “no we can’t do it” but a nasty one.
The reason I bring up ignorance and simply not knowing better is this. My father used to listen to Toyota, Nissan, and Honda owners say they had “no problems” with there cars/trucks. He scoffed a bit at it but sooner or later he gave in and said let’s give ’em a try. After owning the Accord for a few years, and purchasing a Mazda pickup (before it was a Ford Ranger) and trully experiencing what “no problems” was he’ll NEVER go back. What I’ve found over the years is that the people who have always purchased GM/Ford/Chrysler vehicles have a different perception of what “no problems” are relative to owners of the Hondas/Toyotas…and I call that ignorance/blind loyalty.
But maybe more importantly is that my father didn’t buy the Accord and all subsequent Accords because of realiability or potential reliablity…it was because of the ride and drive of that 1986 Honda Accord and the fit and finish, the switchgear, and logic put into the interior. He was shocked after he test drove it. I was shocked enough to go out and buy a 1986 Prelude.
Remember, this is on 1986 models and frankly I’m not sure the GM’s of the world have caught up in the US market yet.
What manufacturers and buyers should remember is that reliability is different then quality but each is just as important.
Sorry to go off topic from the Buick discussion…
Just to follow up a tad:
I mentioned specifications. Specifications are, as you know, the blueprints for a given design. In other words, GM cars and trucks were at one time Specified, Designed, Engineered, and Manufactured to fall apart well before 100,000 miles!
Why? Well come on down, folks…we’s got ANOTHER one to sell ya!!!
One way, or another, we’re gonna find ya, were gonna Gitcha, Gitcha, Gitcha, Gitcha ~!!!!
Sing along everyone…as this is the Death Dirge of GM…however upbeat and catchy the tune may have been at the time.
**Because I Could Not Stop For Death**
-Emily Dickenson
Because I could not stop for Death,
He kindly stopped for me;
The carriage held but just ourselves
And Immortality.
We slowly drove, he knew no haste,
And I had put away
My labour, and my leisure too,
For his civility.
We passed the school where children played,
Their lessons scarcely done;
We passed the fields of gazing grain,
We passed the setting sun.
We paused before a house that seemed
A swelling of the ground;
The roof was scarcely visible,
The cornice but a mound.
Since then ’tis centuries; but each
Feels shorter than the day
I first surmised the horses’ heads
Were toward eternity.
SCMTB,
You are absolutely right on, distribution channels, brand identity and the like are parts of marketing – but the most important piece is product. If the product is bad you will be found out. The same year (2004 I think) that my dad bought his brand new Buick LeCrap my mother bought a 1991 model Acura with 80,000 miles. The Buick’s transmission failed 28,000 miles later, the Acura is still in their driveway having only had some minor air conditioner work.
Katie: I think the problem is with your assertion that Sloan’s model never worked. The fact that it stopped working when more competition arrived doesn’t mean that it didn’t work for all those decades beforehand. It just means that it wasn’t the best, most effective model. It couldn’t adapt to the changes that were taking place.
Even if a Dyson works ten times better than a vacuum with a bag, the vacuum with a bag still works.
This has been an interesting dialogue. I for one would not like to see Buick go away. I believe that it can be viable if managed correctly. However, I see no use for Saturn, Hummer or Pontiac in the US. They make as much sense as tits on a boar hog. To my mind, they should make GMC nothing but SUV’s, Vans and trucks. Chevy stays pretty much as it is with basic cars only (but keeps the Corvette), Buick gets to be the personal sport/luxury and gets the Sky and G8, and Caddy gets the serious luxury. No rebadging allowed. Period. For instance, a low end Buick will still be better than the best Chevy (again except the Corvette)based on type/size of car (Impala vs Lucerne), and the same for Buick/Caddy.
This will allow the brands to really focus on what they are doing instead of trying to be everything to everybody.
That’s the point! GM’s model held up because there was no competition! When competition came along, it fell apart.
Katie, with respect, that simply isn’t true. From about 1920 to around 1965 GMs cars were as good as any in the same price range. At least as far as the American car market was concerned. Honda wasn’t selling cars in those years and Toyota was only selling here from the late ’50s, and not doing well. GM had to compete with many domestic makes and did compete, and survived.
It’s fair to say that ToyoHon outdid the 2.8 from the early ’70s on – outdid them in reliability and economy. But it simply isn’t ture to say there was no real competition since the ’20s.
Europe, in those same years, sent us Renault, Fiat, Citroen, and others, repeatedly, and we repeatedly sent them packing. VW did a bit better, but ruined it’s rep with the Rabbit (Golf) and has only 2% of the market today.
The exception would be cars at the very high end of the market, but for the average consumer, there was not an affordable car in the American market which GM couldn’t compete with. (Remember that fuel economy wasn’t that big a concern for most of us in those years).
What you are saying is basically true, post 1970.
It’s also not true that the model fell apart just because the competition was better. All sales, of all American brands started to fall because the competiton was better. It didn’t affect just the “tweener” brands. Once the Japanese showed the world how to build reliable cars, any brand needed a certain level of quality and reliability to be able to compete in the market. There is still a market for cars somewhere between the extremes of basic transport and opulent luxury. There may not be room for 6 tweener brands, but one or two certainly.
I would note also that Toyota now has 3 brands, so I guess that makes Toyota itself the tweener with Scion and Lexus the bookends.
IMO, the reason the sloan model fell apart was because GM simply failed to stick to it. They insisted on platform and parts sharing until they reached the point were even my Mom could tell that Chevy/Pontiac/Olds/Buick were all offering the same car with different grills. Sloan’s model was based on there being meaningful differences between the different brands. Somewhere along the line, GM lost the plot.
Dynamic88,
As always, I have total respect for you, but here we go!
What you said kind of proved my point.
Toyota and Honda (in their initial incarnation) had business models which didn’t work (i.e cheap and cheerful cars), likewise Renault, FIAT and Citroen had models which didn’t work. The difference is, Toyota and Honda CHANGED their business model into what we know them as now (i.e makers of reliable cars with quality in mind) and then took the big 3 (as it was, then) on. That’s what I mean, when REAL competition came along, it fell apart.
If there was a period where GM held firm against REAL competition, then I’ll concede that it did work. But it didn’t. GM had so much faith in that business model that they didn’t apply it to any other market outside of North America. But Toyota and Honda took their (new) business model global and it’s working.
As for “tweener” brands, I disagree. Toyota serves the everyday market, Lexus serves the luxury bracket and Scion serves no real purpose. Allegedly, it’s supposed to be the “funky” brand, but in Europe, Toyota are selling Aygos (which are supposed to be their young person’s “hip” first car) under the “Toyota” marque and they’re selling very well. I see no real use for Scion.
Buick serves as a bridge between Chevrolet and Cadillac, but I believe that the gap between Chevrolet and Cadillac is so small, it doesn’t need that bridge. Buick is selling less cars than Oldsmobile were before they were axed, surely that must indicate how small that demographic is….?
I don’t know, maybe I’m the Westboro Baptist Church and you lot are the voice of reason….?
P.S To the person who said “bagged vacuum cleaners still work” they don’t. Engineering-wise, they are fundamentally flawed.
Does anyone remember the T-Types?
Buick had a chance to change its image in the early-mid 1980s to something that a younger demographic might have wanted when they started making a T-Type version of each of its cars. For those that don’t know, it was Buick’s way of making its cars look more ‘European’ with less chrome, blacked out trim, chunky and attractive alloy wheels, FE3 suspension setups, grey and black leather interiors that were relatively subdued, rear headrests and clamshell hoods on Buick Electras, turbos on Skyhawks and Rivs and of course the Regal Grand Nationals. They were on to something there, IMHO. (If I could find a Regal GN or a Regal Turbo T-Type, that might be fun for some straight line fun.) Buick was also the leader in Turbocharging in the GM family, and did some great stuff (for the time, and for a domestic manufacturer).
If they had focussed the line to only be ‘T-Type’ cars with sophisticated performance, engines etc, back when they had market share, they might have widened thier appeal beyond the Del Boca Vista senior citizen crowd. But GM, in its wisdom, decreed Oldsmobile to be the “International” brand, and they slowly got all the T-Type like vehicles and called them the “International Series” – and that coincided with the “Not Your Fathers Oldsmobile” ad campaign.
If a car has the word OLD in its name, young people won’t buy it. Buick might have had a chance.
They had the chance to reinvent themselves, but someone gave it to OLDsmobile.
They did have a mid 90s rocket with the Regal GS, but I think it was too little too late, sadly.
Toyota and Honda (in their initial incarnation) had business models which didn’t work (i.e cheap and cheerful cars), likewise Renault, FIAT and Citroen had models which didn’t work. The difference is, Toyota and Honda CHANGED their business model into what we know them as now (i.e makers of reliable cars with quality in mind) and then took the big 3 (as it was, then) on. That’s what I mean, when REAL competition came along, it fell apart.
I agree with that. It’s just the time period I had trouble with. GM was conquering their competitors -including the mightly Ford- for decades before the Japanese showed up. IMO, GM also changed their business model – they quit making distinct cars. I’ll be the first to agree Buick isn’t needed if they’re just going to make Chevy clones.
I also generally agree that Scion is a mistake. But the point was they are trying to have a 3rd brand. They percieve something isn’t quite right with Toyota. Maybe they just need to work on Toyota.
Buick serves as a bridge between Chevrolet and Cadillac, but I believe that the gap between Chevrolet and Cadillac is so small, it doesn’t need that bridge. Buick is selling less cars than Oldsmobile were before they were axed, surely that must indicate how small that demographic is….?
Agree and disagree. The gap between Chevy and Caddy is small. Pony up for a fully loaded Impala SS and then come up with a couple Ks more $ and you can be driving a CTS. But, the gap shouldn’t be anywhere near that close. Cadillac can’t maintain itself as a prestige car at those prices. This is precisely where, and why, the tweener is needed.
I don’t think sales of Buicks tell us the size of the potential demographic – only that Buick isn’t selling. It could be the demographic is small, but it could also be the demographic is better served by several other brands which are taking the lions share of that market. In my father’s time, Doctors, Dentists, successful businessmen, drove Buicks. In my time, they drive something else. But I’m reasonably sure there are successful professionals in my generation, and I’m reasonably sure they aren’t driving Chevys, Fords, or even Toyotas. I believe there is still a market made up of those who are more successful than the rest of us, and want to announce that fact to the world.
As to being the voice of reason – I’m not claiming any expertise. I could well be wrong. I don’t think GM needs to pare itself down to two brands, but lots of people do think so. I give you credit for knowing a lot about the US market – certainly a lot more than I know of the UK market. I’d suggest though, that things might look different due to slight differences in car culture, and marketing history in different places. It might also be my age. I’m old enough to remember when the various GM divisions had separate brand identities – or at least were making a somewhat serious effort to keep them separate. It’s easy for me to imagine at least 5 divisions with separate automotive personalities because that’s what I grew up with. Maybe I just need to change with the times.
Very well built argument, succintly summarized in the one sentence towards the end:
“…GM is dedicating scarce resources to wage a civil war.”
Are those numbers about the sedans’ sales decline true? 15 percent for the Lucernce? It’s a relatively new model…!
That being said, and as much as Buick the brand is unappealing to me, I find Buick the brand still has a better identity than Pontiac the who.
Pontiac needs to go pronto. Before Buick.
Keep in mind that when GM had over 50% of the market in North America, and the DuPont family through one of their trusts(Christiana Securities) was the biggest shareholder. The US government initiated anti trust inquiries against GM because of their size and level of success at the time. The fact that GM had intentions of buying Chrysler did not help matters, and fanned the anti trust flames.
The DuPont family had to divest themselves of their GM shares, GM had to sell their stake in Eastern Airlines since they also owned Allison at the time.
The Sloan saying was a car for every purse starting with Chevrolet and working its way to Cadillac….that model worked for many years…when GM under Sloan was primarily a central holding company with the divisions literally competing with each other.
Getting rid of Oldsmobile proved painful and expensive for GM…getting rid on another division is probably not in the cards.
Chevrolet and Cadillac. Everything else is noise.
I find fault with their advertising as well. I like Tiger, he’s a good guy, he’s inspiring, he’s rejuvenated the sport of Golf and he’s my age so why shouldn’t I like Buicks, too? Because it is not believable.
Tiger Woods has more money than Michael Jordan. MICHAEL JORDAN!! The man bought an island! You mean to tell me that he would chose to limit himself to a Buick and not an LR3?
Woods can afford bespoke clothing and a personal barber but still endorses Nike and Gillette. He’s very careful with his image and very loyal. His value as an endorser is his broad appeal, not just to the carriage trade. I can see him moving to Cadillac in 3-5 years, but I doubt he’d leave GM.
Also, his association with Buick makes sense because Buick sponsors a couple of PGA events, including the Buick Open near Flint.
Hear hear! Buick is a useless brand that should’ve died years ago. Who does it compete with, Mercury? I mean, hell Oldsmobile should’ve been spared instead it’s older sibling. Olds at least had some potential. On a side note, GM will never learn as they again commence the whole re-badging trend that eroded themselves in the 80’s.
In case someone else is still reading this thread, I suggest reading Sloan’s “My Years With General Motors” to understand how the company repeatedly avoided extinction and became America’s greatest industrial enterprise.
The Sloan model was “a car for every purse and purpose.” The “purpose” part was essential; without it GM is just a collection of brands at (somewhat) different price points but redundant market targets.
I agree that Overland, er, I mean Pontiac, deserves jettisoning much more than Buick. As do Saturn–from the beginning a terrible mistake–and GMC, the essence of redundancy. I think Hummer might best be merged with Jeep and survive as a luxury class and special-purpose ORV.
Today the “traditional Buick driver is driving a Maxima or Avalon. These are the “tweener” cars of this era. Go anywhere and you will find that these are the cars that appeal to retirees, and other folks with money but do not feel the need to flash it too loudly. These cars are large, plush, and powerful, everything a Buick, Olds, or Mercury used to be.
GM lost the tweener market plan and simple by making and selling substandard products that did not live up to expectations.
As mentioned before Buick today is just a tired old brand that has sank to rental car level. The only people that care about “today’s” Buick are those involved in making and selling these cars.
My Parents are the demographic that Buick is targetting; older with money to burn and they drive a Murano and a Maxima. Funny they grow up in GM households and used to own GM cars themselves. The problem is both of them have driven enough half-a$$ GM rentals of recent memory that they HATE GM cars and have lost all faith in domestic cars.
GM needs to do this, and do this immediately:
Get rid of these brands:
Pontiac- this brand has no reverb with the next generation of buyers. The GTO is strong testament to this. Sure, the Solstice is a looker, but try driving one, it’s a miserable experience. Gets my vote for worst manual transmission in a production car within the last 10 years. The G8 will have strong initial sales, but will go the way of the GTO. And PLEASE, don’t resurrect the Firebird…
Buick- this brand should have died long before the debut of the horrid Lacrosse and Lucerne. Some of our clients have told us to take the Lucernes BACK to Enterprise rent-a-car when we tried using them as courtesy service loaners at our dealership. I’ve never seen such distaste for a rental car before. After driving them back to Enterprise, I understand why.
GMC- sure, this may be a profitable brand for GM (pretty much just rebadged Chevy trucks). But this brand won’t be profitable for long. Trucks and large SUV’s (which GMC is composed entirely of) are swiftly becoming futile.
SAAB- although this brand does seem promising, especially with the addition of XWD, it will be a brand that will always play second fiddle to the likes of BMW, MB, Lexus and the like.
HUMMER- i’ve never experienced a brand that was more hated. the H2 was a huge noisemaker upon it’s debut and has long since lost it’s luster. i see less and less of these as gas prices go higher and higher. the H3 now has the power it needs with the V8, but also has the horrible fuel consumption that comes along with the added power.
GM should retain three brands and three brands ONLY in the US:
Saturn- this is honestly GM’s most promising line-up now that the whole board has been revamped. There are still huge strides that the brand needs to make though. Think of it as a Scion brand beater.
Chevrolet- this is GM’s mainstream family-friendly brand. I see no reason Chevrolet could not go car-for-car with Toyota if it really tried. Sure, every model would need to be revamped entirely, but the potential is there.
Cadillac- the CTS is GM’s most promising car. it is absolutely amazing. revamp the line-up to match up with the improvement of the CTS, develop a proper flagship, an exotic low volume sports car, KILL the Escalade, and this brand could do some proper Lexus-fighting.
that’s my take on it. sure, i understand how unpopular it may be to some diehard GM cheerleaders, but GM needs a DRASTIC change.
Another good extended discussion and some very interesting points put forward.
I thought I’d should expand on the specific point – “Buick = old folks car – discuss….”.
Let’s face it, selling a product that is popular with the old-age demographic isn’t an inherently bad thing. People in that group have had a lot of time to accrue assets so many of them have readily available spending power. It is also a growing demographic isn’t it? What with the baby boomer effect and the simple fact that modern medical technology is for ever allowing people to live longer.
So given the choice between nobody buying your cars or lots of old people buying your cars – it is a no-brainer to see that Buick is probably happy to have a reasonably loyal customer base among the gray-hair set.
On the downside as others have often pointed out it is a customer base that is literally dying off. But this is a point that bears further dissection too.
If we pick a nominal demographic bracket to represent all these oldies that like Buicks – say the 65–85 age group – it is true to say that the grim reaper is busy working his version of attritional adjustment on these individuals and thinning them out as fast as he can. However, as fast as they are losing members from the group every year there are a new crop of 64-year-olds who have another birthday and join the group. So, as I said above it is actually a steadily growing demographic.
The real problem for Buick is that the newbies in the 65-85 are increasingly likely NOT to be loyal Buick buyers. The ones that are dying off are generally the older ones that lived the best of their formative years through the hey-day of domestic dominance and carried that natural preference for home-market product with them.
The “just-65” debutantes to the demographic group are just that little bit more likely to have already made the move across from domestic to imported loyalty – and they are unlikely to ever go back.
….and this effect is not just limited to the “old people who like Buick” argument. You can apply it to the younger age groups too.
There are whole swathes of youngsters now who have never owned a domestic car (and maybe never even driven one) and have never experienced one in the family because their parents have never owned one within the young person’s living memory. As the years roll on, these young people obviously move up through the age brackets and sweep away the older folks who may have considered a domestic car first just because that’s what they’ve always been used to and what their parents always did?
There are so many factors stacking up against the Detroit 3 right now that they are truly facing the perfect storm anyway – but I feel that it is this demographic tsunami that will slowly but surely eliminate them simply because it is virtually inevitable.
The only thing that can turn the tide (apologies for all the wave/storm analogies) and stop this effect from reaching inevitable conclusion is for the domestic product to become so superior to the imports that it is preferred/rediscovered on the basis of merit and not just out of habit or some sense of nationalism.
It is hard to see that happening – or at least happening quickly enough to save the Detroit 3 because time is definitely not on their side.
KatiePuckrik: Coincidentally, those are the years where customers had the choice of poorly built crud from Chrysler, poorly built crud from Ford and poorly built crud from GM.
Sorry, but that’s not the way it was. GM cars built prior to 1971 or so – with a few exceptions – were NOT poorly built crud, and, if anything, were better all-around cars than their foreign competition. (So, for that matter, were the Ford and Chrysler offerings.)
During the 1950s and 1960s foreign cars sold primarily because they were different, not because they were better. They certainly weren’t more reliable.
The Sloan model worked for years because it was supported by cars that were better choices than Ford, Chrysler, AMC and Studebaker, or what might laughingly be called the “competition” from foreign companies.
There were no true high-quality cars offered in the U.S. by the foreign nameplates until the very late 1960s.
Today the “traditional Buick driver is driving a Maxima or Avalon. These are the “tweener” cars of this era. Go anywhere and you will find that these are the cars that appeal to retirees, and other folks with money but do not feel the need to flash it too loudly. These cars are large, plush, and powerful, everything a Buick, Olds, or Mercury used to be.
GM lost the tweener market plan and simple by making and selling substandard products that did not live up to expectations.
My father fell exactly into this scenario. However, the reason he ended up in an Avalon is because the new Buicks looked exactly like the last two he traded in. Both of his trades were very reliable and he liked them a lot but he did not have any interest in buying a third car that was not much different than the first. Don’t always assume that everybody’s domestic experience has been poor. If that was true, the American makers would have been out of business in 1980 – when most of the domestic stuff WAS crap.
The issue isn’t about too many brands as some say. It’s about control. “Control! Control! You must learn control!” Unfortunately, GM has never really learned control. Back in 1971 GM launched the Pontiac Ventura to give Pontiac dealers the small car that the wanted so badly. However, good ol’ John Z. DeLorean didn’t like this because GM had promised Chevy dealers several years earlier that the only small car GM would make would be a Chevrolet. DeLorean also knew that Novas were flying off of Chevrolet lots and that the dealers were having difficulty getting enough cars to fill the demand. So, GM would not only break it’s promise to the dealers, but it would also deny them the expanded inventory they needed. DeLorean knew it would turn out bad, and protested it greatly. As predicted, the Chevy dealers started to resent GM more than before while Venturas sat on Pontiac lots for months due to lack of buyer interest in their costlier small car.
GM, you can have multiple brands, but you has to “unlearn what you have learned.” Back in the forties, when the Sloan system was in full force, GM only really had one or two cars per division. Sure, they had different bodystyles (coupe, wagon, sedan) but the engines and chasis stayed pretty much the same. It was only in the fifties and sixties that they decided to have half a dozen models per brand. It made sense when it ruled half of the market and also cleared America of smaller competitors. But now, in order to make half a dozen unique models (no rebadges) for seven different brands it would take an inordinate amount of time and especially money. Even other large coroprations, like VW, share platforms and engines. But VW can only have as many divisions as it does because they greatly differ in price and some are very limited in production capacity.
GM’s gotta space the brands, kill a few off, and limit the number of models per brand. Notice, how I didn’t say “or” in that last sentence.
I know GM’s trying to be a bit “budget” with it’s brands. They’re always talking about how they’re beating the competition on price, but keeping even Cadillac at lower prices compresses the whole GM hierarchy. Saturn can be eliminated because none of it’s models are unique in any way. GM created Saturn as an import-style division, but it doesn’t need a separate division if its normal cars were as good as the imports. It’s strange because even the Accord has gotten bigger, heavier, and more traditionally American with the newest version, so shouldn’t GM just make a really good Malibu? I appreciate getting foriegn goodies, like the new Astra, but why can’t they just make it a Pontiac? I generally believe that they are making Saturn more like Opel simply because they can penny-pinch when they import models and not have to make new bodypanels or anything. Saab(aeronautical) has also expressed interest in buying Saab(automotive), so GM can easily get rid of it without killing it off and upsetting the Swedes. And I’m sure there are plenty of potential suitors for the money-making machine that is Hummer. Real easily, GM can get rid of three brands that have virtually no past with the company compared to their more historic divisions. With more space inbetween, it makes it much easier for the divisions to make cars without dancing on each other’s toes.
I’m gonna bring this one back to life…
A lot of good points here…most notably is that the Enclave SHOULD be turned into a Caddy. That would be a great fit for the car. I agree that the brand is on life support. But I also think that they should lose Pontiac and Hummer.
Now the Enclave on it’s own merrits…is a very promising car. My wife and I are considering a replacment for my FX35…it’s been a stellar car, and we just need a touch more space.
The Honda Pilot has seen a nice face lift IMHO…but is under powered and that dash is DREADFUL! But there is tons of spaces and well…it’s a Honda.
The Enclave was a real eye opener. The car looks unlike anything else out there…and I quite like it. It also drives great, has tons of room, is DEAD QUIET, and I really like the 7 person configuration with the 2 bench second row. It’s not without flaw….some of the plastic molding on the door and dash are a bit cheap looking, but it blows the Honda out of the water. Put a Japanese label on this car, and we’d be singing it’s praises.
Oh and I am 40…my wife is 33…so we are certainly outside of the typical Buick demographics.
Will we buy one? Not sure yet…but it’s a serious contender.
RIDE