Saturday, May 6, 2006
4 May 2006
Anyone remember Buick? You know; "doctor's car", big, expensive, highly-styled, just this side of a Cadillac? Well, today's Buick is going head to head with Hyundai. No really. Even Hyundai's website knows the truth. It compares their new Azera Limited to a Buick LaCrosse. And here's the really strange part: the Buick kicks the Azera's ass. This triumph would be all well and good for GM if anyone was actually buying a Buick, but they aren't. At last count, on average, each Buick dealership sold eight new cars per month. Eight. Something's very right here, and something's very wrong.
Let's look at that comparison again. At $25,535, a Buick LaCrosse is cheaper than the $27,495 Azera Limited. That's almost two grand less than the import before you begin bargaining with the dealer (So Ricky& how many new Buicks did you guys sell this month?). And don't forget that GM sweetens the deal with 2.9% financing. Or how about Buick's flagship, the new Lucerne? At $25,990, it's still about $1500 less than the Hyundai. The Lucerne has features Hyundai hasn't even thought of (yet): rain-sensing wipers, heated washer fluid, OnStar, etc. The Lucerne also has a much larger cabin and the quietest ride this side of a casket. And portholes.
Some buyers might choose the pricier Hyundai for its mileage. Wrong answer. The Azera Limited's EPA rated mileage is 18mpg city, 27 highway. The LaCrosse clocks in at 20/30. That's 11% better fuel efficiency across the board-- despite the fact that the LaCrosse is the bigger car. The even larger, more luxurious Lucerne (remember?) scores an EPA rating of 19/28, besting the smaller Hyundai by 5% city and 3% highway.
So why is Hyundai thriving and Buick on the ropes? Hyundai knows who they are. They have a marketing philosophy that works. Simply put, it's "$5000 cheaper than a Toyota and almost as good." (Hyundai offers a warranty to paper over the last part of that slogan, but since few new car buyers keep a car more than a few years, it's more of a security blanket than anything else.) The Korean automaker's product development hews strictly to the company's narrow mission, generating cars that support the underlying "brand proposition." Everyone knows what a Hyundai is. The result: a solid and growing customer base.
Part of Buick's problem is that they are saddled with the dead hand of GM marketing. Buick, like most GM divisions, has forgotten who they are and what they are about. The result is unfocused product development, bewildered dealers and, eventually, a cataclysmic drop in market share. Buick sales have fallen over 80% in the last 20 years. The only other major US make that's done worse is sibling division Oldsmobile, whose sales have fallen 100%.
Buick's loss of focus began in the '70's, when they started marketing versions of the Chevy Nova and Monza. Neither of these cars looked or acted like a Buick. A series of nondescript X, A, and J cars followed, all wearing the Buick nameplate for no discernable reason. Eventually, GM forgot what a Buick was. Toyota stepped into the breach with the Avalon and Lexus ES300. Honda jumped in with the Legend. Within a few years, the US market was flooded with cars that were better Buicks than Buicks.
To reverse this slide, the Buick brand must discover, or rediscover, its identity. There is a precedent for building better Buicks, an archetype: the Roadmaster. Reincarnated in 1992, the Roadmaster generated sales and solid profits through 1996. Big, solid and comfortable, the four porthole Roadmaster's sales were limited by capacity some years. Unfortunately, the Roadmaster died when its platform mates-- the Chevrolet Caprice and Cadillac Fleetwood Brougham-- bit the dust.
"Less bling than a Cadillac" worked for Buick once, it would work again now. The current Lucerne, built off a Cadillac platform, would be an excellent place to begin the Buick brand's renaissance. The Lucerne's understated elegance makes the Cadillac DTS look, well, flashy. To strengthen the claim, Buick would have to ditch bargain basement six-cylinder Lucernes and make every example a V8 (and a four portholer). And/or what about a Buick muscle car?
Meanwhile, the LaCrosse should quit trying to be Buick's Taurus. Again, Buick needs to move slightly upmarket. Ditch the smaller engined, low-buck versions, make a V8 standard, and build on the car's design excellence, reliability, and quality ratings. Market the car as a small Lucerne, and buyers will come.
"Less bling than a Cadillac" once made Buick #3 in US sales, and a solid contributor to GM's bottom line. Eight-cylinder engines, Dynaflow transmissions and lots of portholes helped, but Buick's success was based on solid marketing fundamentals. Buick knew what kind of cars to build, and how to market them to aspirational Americans. "Cheaper than a Hyundai" just won't cut it.