December 12, 2006
IsChina keeping the struggling Buick brand alive? A growing number of analysts and investors — including General Motors’ former number-one shareholder, Kirk Kerkorian — have been pressing the automaker to dump the troubled nameplate, which has suffered a steady loss in market share.
But several senior company insiders tell TheCarConnection.com that a key reason for keeping Buick alive is the growth potential in another booming market: China. “Killing off Buick here would send the wrong message to China, where it is now the number-one brand,” said a senior executive, asking not to be identified by name, during a GM background briefing last week.
For his part, GM CEO Rick Wagoner told TCC that “We’ll sell more Buicks in China than in the U.S. this year,” and considering the booming new-car market in that Asian nation — which is expected to top 7.3 million vehicles this year — the trend is expected to continue.
Considering Buick’s strong position in China, it is not surprising that the Asian nation is coming to play an increasing role in the brand’s future strategy. While specific details discussed during the GM background session were revealed on an off-the-record basis, company officials agreed to reveal that a critical future Buick vehicle has been designed by Chinese stylists, who beat out Detroit designers in a competitive face-off. The product will notably reflect the fact that Buick is considered a very up-market brand in China. Said GM car czar Bob Lutz, “Buick is viewed (there as) highly desirable, cool, and upscale, all adjectives we’d like to ascribe to the brand in the United States.”
Why the perception gap? Perhaps, suggested CEO Wagoner, it’s because the Chinese “skipped the last 40 years of Buick” and have only recently gotten to know the brand again. When GM began investing in the fast-growing Asian market, a decade ago, admitted Wagoner, Buick was the last brand it wanted to bring there. But ironically, many of China’s old guard had secretly lusted for the classic Buick models that were popular in the pre-Communist era, and in the command-and-control market, GM agreed to give Chinese officials exactly what they wanted in return for access to the market.
The move, Wagoner said, has paid off far more than he would have initially expected, for GM as a whole and particularly for Buick. Going forward, “the Chinese have pushed the needle and…taken the lead.”