When General Motors unveiled its new Buick Enclave crossover SUV to the media
in Pasadena, California, last month, it did so with the help of one of the
biggest American sports stars.
Golfer Tiger Woods made all the right noises about the new luxury vehicle at
the Los Angeles Auto Show, calling it "stylish" and "elegant." But the future of
GM's 103-year-old brand may hinge not on the face of an iconic sportsman but
because of China, which this year will pass Japan as the world's second-largest
vehicle market after the United States.
This year, the Buick brand looks set to sell more cars in China than in the
United States, according to Automotive News.
The industry publication calculates that Buick sold 206,582 vehicles in the
United States in the first 10 months of this year, down 15.4 percent from the
same period of 2005. During the same period, Buick sold 218,603 vehicles in
China, an increase of 27.4 percent.
Why the Chinese interest in Buick? While it has seen its status fade here in
the United States, the longstanding American brand has never lost its reputation
in China. And GM has managed to build on that status, selling vehicles under
four major brands, Buick, Chevrolet, Cadillac and Saab, through Shanghai General
Motors, a joint venture between GM and Shanghai Automotive Industry.
The Sino-US joint venture sells Buicks such as the LaCrosse, the Excelle and
the GL8 to Chinese consumers, and it has overtaken German rival Volkswagen AG to
become the top automaker in China in 2006, where it has 13 percent of the
market. China is now GM's biggest market after the United States.
The growth comes as GM focuses intently on the growing Chinese market,
investing US$3 billion over four years ending in 2007, building a network of
dealerships and factories.
The thinking is that as GM works to revive its flagging business, which
posted a worldwide loss of US$10.6 billion for 2005, the booming Chinese economy
is a significant new source of revenue that can provide the company with the
sort of strong growth that isn't found in the United States or other Western
Automotive analysts have long said that big US automakers like GM have too
many brands to support. Two years ago, GM Vice Chairman Bob Lutz unforgettably
described Buick and its sister brand Pontiac as "damaged," triggering
speculation that they would soon be killed off.
Yet both Buick and Pontiac have endured, even though their US sales have
lagged in recent years as Japanese and Korean automakers have chalked up
significant market share gains. In the face of such fierce competition, many
have questioned whether these brands, and others like GM's Saturn brand and
Ford's Mercury nameplate, can survive in the long term.
GM is working to reverse the staid, old-fashioned aura that surrounds its
Buick, Pontiac and GMC brands in the United States through an aggressive
restructuring campaign, consolidating dealer networks and focusing on fewer
models, making Pontiac its sporty car line, GMC a truck product and Buick a more
The Enclave, which will hit dealerships in late spring or early summer,
follows the new GMC Acadia crossover, which is now on sale. Both are based on a
unibody platform, offering a smoother ride and better fuel economy than the
body-on-frame construction of older SUVs.
"We have very high expectations for these vehicles," said Tom Appel, editor
of Consumer Guide Automotive, which offers buying advice. "These unibody designs
weigh less than regular SUVs, have better handling and are more car-like."
Appel also says that GM's stated aim to go after the market for luxury SUVs,
like the Acura RDX or the Lexus RX 350, is feasible with the Enclave. Buick's
previous small SUVs, like the Rainier and the Rendezvous, didn't do anything for
the Buick brand, he said.
"Sales of those products did OK to mediocre," Appel said. "But Buick's aim to
go after cars like the Lexus RX 350 is more realistic now with the Enclave. If
it's as good as the GMC Acadia crossover, they might have a serious product
here. The Rainier and the Rendezvous were the sorts of vehicles that sold on
price, but the Enclave could be a destination car -- one that actually
brings people into dealerships."