GM targets smaller, more profitable Buick brand

LOS ANGELES: General Motors is prepared to nearly halve the number of Buick models it offers in the US as it tries to re-establish the luxury brand in its home market, CEO Rick Wagoner said.

Speaking to reporters at the unveiling of the 2008 Buick Enclave, Mr Wagoner said the automaker would also reduce Buick sales to rental car companies as it shifts toward targeting more profitable retail sales with upcoming new designs. Golf star Tiger Woods, who has a five-year promotional deal with GM, will play a central role in marketing the Enclave and appeared with Mr Wagoner for the vehicle’s unveiling.

Though Buick has offered as many as seven models in recent years, Mr Wagoner said GM was prepared to accept lower unit sales with about four models in order to try to capture more showroom traffic and shun lower-margin sales to car rental companies. “In the end we’re going to let it flow. But what we’re going to do is to make sure we make three and then four really good (Buick models),” Mr Wagoner said.

GM has been pushing dealerships to consolidate into stores that offer its GMC trucks along with Buick and Pontiac models. Mr Wagoner said that push combined with the success of Buick in China would help turn the brand around in the US market, where it has struggled to attract a younger generation of buyers. “We’ve had a terrific run in China with Buick,” he said. “Buick sells to the upper crust in China. That’s going to open up some opportunities over time for product sharing that we wouldn’t have had or even thought of five years ago.”

He added: “We don’t have to play hard in daily rental with Buick because frankly we’ve got other brands to play that role. We want to run a lot of volume through Chevrolet. It is the brand that should play broadly and if we need to push for some volume that’s the place to push for it. Buick, we can focus.” GM is showing off the production version of the Buick Enclave, at the Los Angeles Auto Show. The five-door luxury vehicle is expected to compete against the Acura MDX from Honda Motor and the Lexus RX 350 from Toyota Motor.

Production of the Enclave is expected to begin in mid-April, with dealer inventory available by early June. GM has said it expects up to 40% of the buyers for the Enclave could come from those now driving rival brands as it targets younger, more affluent customers. Analysts have given the Enclave high marks for its interior styling, quiet ride and relative fuel efficiency.

Crossover vehicles offer the roomy cabin of an SUV with the handling of a passenger car and have been one of the few bright spots in a contracting US auto market.

Golf star Tiger Woods, who has a five-year promotional deal with GM, will play a central role in marketing the Enclave and appeared with Mr Wagoner for the vehicle’s unveiling. Wagoner, who declined to discuss specific future product plans, said the Enclave pointed to the direction of GM’s plans for the brand which he said was profitable on a global basis.

“We can tailor the products much more against a market here in the U.S. which has fragmented quite a bit,” Wagoner said. “And we can set up the distribution network so that the dealers can make money by putting Pontiac, Buick and GMC together.”