Driving Buick Forward

When General Motors announced Aug. 6 that it was planning a plug-in Buick crossover to hit showrooms in 2011, critics immediately derided the vehicle as a "Vuick" because of its clear resemblance to the Saturn Vue, a model cast aside with the rest of that brand. So-called badge engineering is one reason the company got into trouble in the first place: cloning its cars drove consumers crazy. Last week, GM killed the proposal in direct response to the negative feedback.

The quick reversal underscores the lack of room for error at Buick, which is trying to shed its old-fashioned, downmarket image in the hopes of attracting younger buyers in love with foreign upscale rides like the Acura. As one mom blogger said at a special consumer event this month at the GM Technical Center in Warren, Mich., "If a Lexus, Acura, and Buick are priced within $10,000 of each other, I'd pick the Lexus and drive it for 300,000 miles!" That's not what GM wants to hear. The company only has four remaining brands—Buick, Cadillac, Chevrolet, and GMC—so if Buick's makeover sinks, turning the company around could get harder.

"Most Americans associate Buick with really old people, like one step away from Oldsmobile, and we know what happened to Oldsmobile," says Edmunds.com senior analyst Jessica Caldwell, referring to that venerable brand's 2000 demise because of poor sales. "You can't change brand perception overnight, but if they come out with products that appeal to younger people, that could be a big start." Of course, the timing for a rebound isn't favorable, given the immense pressure on GM to boost sales right away. "They're doing everything right with Buick by moving it into this premium market," says Michelle Hill, an automotive analyst at Oliver Wyman. "But it's going to take more time than what they hope for to change customers' minds."

Buick only represents 4.75 percent of GM's total sales volume this year, but that's based on just three vehicles: the Enclave crossover, which has been a hit with consumers; the well-regarded LaCrosse sedan, which hasn't sold especially well but whose styling inside and out is sharp; and the Lucerne, a larger sedan that's being discontinued next year. But as the company's entrant in the ultracompetitive "near-luxury" market, Buick has an outsized importance. And executives are hoping to make inroads in that segment by offering greater value.

"We need to become relevant to today's buyers with an entirely new product lineup," says Buick (and GMC) general manager Susan Docherty. "And part of the way we're going to answer that marketing challenge is by positioning this product as a premium entry with premium content, but without the premium price." The brand-new 2010 LaCrosse, she points out, has a starting MSRP of $27,835, while the 2009 Lexus ES 350 starts at $35,345.

As it happens, Docherty was part of the team that turned Cadillac around beginning 10 years ago, when the luxury brand was on the brink of becoming a joke. But then came the Escalade SUV and the CTS sports sedan and "all of a sudden it's now attracting younger people," Caldwell of Edmunds.com says. "That's the business model GM's thinking of." Already, 50 percent of Enclave buyers are new to Buick, Docherty says, and she hopes to lure buyers as young as 35 (currently the average is in the mid-50s).

Buick plans to roll out at least four new models over the next two years, including an American version of the popular Opel Insignia midsize sedan, produced by GM's European subsidiary (which is currently being sold). And the brand's strong performance in China—Buick sold double the number of cars there than it did in the States last year, according to Automotive News—gives it a bit of a cushion (and partly explains why GM kept the brand).

But the stakes are highest in the U.S. While GM's other core brands—GMC, Chevy, and Cadillac—have clear identities, Buick's new image depends entirely on their forthcoming cars. "If they can get consumers into the vehicles to test drive them and get them excited about it, people will be willing to pay a similar price for them as they would an Acura or a Volvo," Hill says. If that doesn't happen, the onetime auto giant will shrink even more. GM "has to get it right," Hill adds. "They have no choice."