Automotive News - April 14, 2008 - (Page 14)

14 • APRIL 14, 2008 Buick: As Chicago goes, so goes the nation Once the heartland was a GM gold mine; nowadays, China is Rick Kranz How bad are Buick sales? Nationwide, Buick sales plummeted 24.1 percent in March compared with the previous March. Just 12,317 retail and fleet vehicles were sold. It was a dismal month for a brand that has three solid products: the LaCrosse, Lucerne and Enclave. In fact, that’s all it has — three vehicles. That’s hardly a product line. A quick snapshot of what used to be fertile ground for Buick reveals the depth of the sales problem. Northeast Illinois and northwest Indiana for decades had been a gold mine for General Motors. Many years last century, the Chicago area was one of the biggest retail markets for Pontiac, Oldsmobile and Buick. But as GM stumbled, sales of Buick, Olds and Pontiac fell — even in the heartland Chicago area market. What happened to Buick in the Chicago area shows why GM stitched the three brands together into the Pontiac-Buick-GMC channel. How far has Buick slipped in the Chicago area? Here’s the shocker: The nearly five dozen Buick dealers in northeast Illinois and northwest Indiana combined sold about 400 Buicks retail in March. That’s about seven vehicles per dealer. That is an area in which some Buick dealers once counted retail sales of more than 150 cars a month. The area is huge, stretching from the Wisconsin border on the north, the Illinois border plus northwest Indiana on the east, such Illinois cities as Tinley Park and South Holland to the south, and Aurora and Elgin to the west. The region has an estimated population of more than 10 million, and, for all purposes, the Buick brand is invisible to those who live there. A dozen years ago, I stopped at Rick Kranz, a Chicago native, is product editor of Automotive News. ing future there are the sole reasons for the brand’s U.S. existence today. Last year, 332,115 Buick vehicles were sold in China, a 9.2 percent increase over the previous year. What Buick’s U.S. dealers need, the writer says, is a production version of the Riviera coupe concept that debuted in China last year. what was then Bredemann Buick in Park Ridge, Ill., a suburb northwest of Chicago, and spent an hour or so talking with the staff. That week the store delivered something like 16 new Buicks. The youngest buyer was 61; the oldest was 92, and he bought a new Buick every other year. It didn’t take a Rhodes Scholar to know that Buick’s product line had to be reinvented to attract younger buyers. ter-looking Pontiac Aztek, but certainly no Lexus. It’s gone. The Rainier was a credible SUV, but it came to the market as the SUV craze was weakening. It’s gone, replaced by the stylish Enclave crossover. The Buick Terraza minivan was little more than a reskinned Chevrolet Uplander, and the Uplander is nothing to brag about. The Terraza is gone. Judging from the remaining count of three vehicle lines, it’s no surprise that Buick’s sales are in the Dumpster. When GM pulled the plug on Oldsmobile in December 2000, that brand ended up with 289,172 sales for the year. Buick’s U.S. sales totaled 404,612 that year. But Buick’s fortunes have fallen considerably since then. Last year, Buick sold 185,791 vehicles across the United States, a 22.8 percent decline from the previous year. For the first quarter of this year, Buick sold 37,834 vehicles nationally, down 12.7 percent from the year-earlier quarter. If you multiply first-quarter sales by four — figuring a weak economy this year — that could be about 151,000 Buicks nationwide this year. Unlike Oldsmobile, the Buick brand likely will not disappear. The booming China market and Buick’s promis- EDITORIAL STAFF 313-446-0361 E-mail autonews@crain.com Web site www.autonews.com Keith E. Crain Publisher and Editor-in-Chief Peter Brown Associate Publisher and Editorial Director DETROIT 313-446-0361 Fax: 313-446-0383 1155 Gratiot Ave. Detroit, MI 48207-2997 David Sedgwick Editor dsedgwick@crain.com Edward Lapham Executive Editor elapham@crain.com Richard Johnson Managing Editor rjohnson@crain.com John K. Teahen Jr. Senior Editor Mary Beth Vander Schaaf Deputy Managing Editor Charles Child International Editor David Kushma Retail Editor Dave Guilford News Editor Philip Nussel Special Projects Editor James B. Treece Industry Editor Karen Faust O’Rourke Insight Editor COPY EDITORS: Bob Allen, Tom Fetters, Patricia C. Foley, Kenn Jones, Gregory Skwira Susan Zavela Bamford/Graphics Editor Rick Kranz/Product Editor REPORTERS: Leslie J. Allen, David Barkholz, Mary Connelly, Ralph Kisiel, Jamie LaReau, Arlena Sawyers, Robert Sherefkin, Richard Truett, Bradford Wernle, Amy Wilson Mary Raetz Director, Automotive News Data Center Debi Domby, Camille Pippen Research Assistants Dan Jones Office Manager Robertta Savage Editorial Assistant Corinne M. Price, Michael Garrison Information Center LOS ANGELES Mark Rechtin/Bureau Chief 310-739-8009 Fax: 310-832-6362 Kathy Jackson/Reporter 323-370-2481 Fax: 323-655-8157 6500 Wilshire Blvd. Los Angeles, CA 90048-4947 NEW YORK Diana T. Kurylko/Reporter Phone/fax: 908-273-6059 dkurylko@crain.com WASHINGTON Donna Harris/Reporter 540-668-7295 Fax: 540-668-7296 Harry Stoffer/Reporter 202-662-7212 Fax: 202-638-3155 814 National Press Building Washington, DC 20045-1801 MID-SOUTH Lindsay Chappell/Bureau Chief 615-371-6654 Fax: 615-371-6655 April Wortham/Reporter 615-371-6617 104 East Park Drive, Suite 315, Brentwood, TN 37027 TOKYO Hans Greimel/Asia Editor +81-3-3828-9060 Fax: +81-3-3828-9061 hgreimel@crain.com Yurakucho Denki Bldg., 20th Floor 1-7-1 Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan comment More from China The redesigned front-drive 2010 LaCrosse will debut later this year and will be sold in China and North America. GM’s China operations had a big role in creating that sedan, and China is likely to have a bigger role in future Buick vehicles, I’m told. Buick’s Invicta concept, which shows the styling direction for the brand, will be unveiled next week at the Beijing motor show. But Buick’s U.S. dealers need more than the redesigned LaCrosse sedan, which is due next year. They need a production version of the beautiful Riviera coupe concept that debuted in China last year, something sporty with a LaCrosse price to draw buyers to the showroom. And they need it soon. Single-point Buick dealers who are holding out, refusing to add Pontiac and GMC franchises or to give up the Buick franchise, must reassess the market. I feel sorry for Buick dealers in the United States who think that the glory days will return and that they’ll again be retailing 100 or more cars a month. It isn’t going to happen — not even in Chicagoland. You may e-mail Rick Kranz at rkranz@crain.com Only 3 lines left Since then, Buick’s dealers have suffered for several reasons: GM’s indecision over a Park Avenue replacement ended with some disgruntled Park Avenue owners leaving the brand when a replacement never materialized. Few wanted to step down to a LeSabre or, later, a Lucerne. The entry-level Skylark and flagship Riviera are gone. Neither was replaced. The Regal and Century are gone, both replaced by a single model, the slow-selling LaCrosse sedan. The LeSabre was renamed Lucerne when the redesigned model debuted, but it has never come close to LeSabre sales. The Rendezvous was merely a bet- continued from Page 12 from the 1970s; why would I think they would understand now? PETER LOMBARDO President Creative Media Associates Montville, N.J. The writer has worked as a controller and general manager for auto dealership groups in New York and New Jersey. He now owns an ad agency that works with auto dealerships. Accentuate the positive To the Editor: Regarding the April 1 online story “Auto sales plummet by 12%”: Why all the negative? It seems to me that Automotive News is merely reporting the same negative news about the auto industry that most of the negativebiased metro newspaper and TV networks are reporting nationally on a day-to-day basis. Why not report on the positives? Report on those positive topics that make a difference in the day-to-day operations of dealerships in America. What did you say? That positives do not sell? That reporting on the negatives is easier and takes less effort? Bull! Try telling that to the men and women who work hard daily in the retail, wholesale and manufacturing arms of the auto industry. There are many success stories in the automotive industry right now. Go out; look for them; write about them. Yes, some (but not all) dealerships are having it as tough as you want everyone to believe. Maybe those dealers who are having it tough cannot only read about positive experiences but also learn ideas that may help them in the future, instead of all the negatives you report that help no one. STEVE K. KENDRICK Executive General Manager Infiniti of Gwinnett Subaru of Gwinnett Duluth, Ga. Auto industry has lost a good man To the Editor: I was shocked and saddened to hear of the accidental death of John Herlitz (“Ex-Chrysler design chief John Herlitz dead at 65,” March 31). I had the pleasure of working with John (as well as Bob Lutz, Tom Gale and Trevor Creed) on various international projects, including memorable Lamborghini design projects. I always had the greatest respect for John. His design skills were outstanding, of course, but to me his truest strengths came from his character. It is occasionally easy for executives to be ego-driven in this business. But I can never recall John Herlitz being anything but down-to-earth and considerate and certainly never full of himself. The man had integrity, style and understated class. I also remember his rather dry sense of humor, which often came through during otherwise serious Lee Iacocca/ Gerry Greenwald/Lutz design reviews. John Herlitz in a 1995 photo I always counted John as a truly good man in our business, and I consider it a great loss. JACK STAVANA Irvine, Calif. The writer, a former Chrysler executive, is now direct http://www.autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - April 14, 2008

Dealership jobs hit 8-year low GM is the wild card in axle war Service contracts: Hard-sell tactics plague dealers, customers TV auto ads shift to online, mobile venues At seminar, marketing execs to discuss new ways to reach customers Better get to know the Nano — it's set to change the world Veteran Detroit 3 dealer: 'The future is quite bleak' Poll: Dealers scrounge for cuts Locals closer to GM strike Scion xB price rises $100 Valeo CEO: No breakup Tata Nano changes low-cost development Hyundai tailors TV, Web ads for Hispanics Study: Ads focused on vehicle qualities won on Oscar night Post-Celine, Chrysler ad guru seeks right note Chrysler's quest for quality lured Nissan exec Betts Search starts for in-vehicle alcohol detectors After S. Calif. success, Honda may fund ad groups Computer images gain ground in TV ads Web TV offers automakers new ad, sales options BMW: X6 will bring brand new buyers Diana T. Kurylko Chrysler fields 'dream' ads Nissan seeks dealerships for trucks Honda will export Alabama-built Pilots to Russia Toyota, Subaru work on 'affordable' sports car Cadillac's ad agency savors the sweet life Some stores may not sell Chrysler hybrids GM hybrids get off to a slow start in first quarter Lexus adds a personal touch to pamper owners, prospects What they're buying — and what they're not The age of fuel innovation is here Approaches to r&d vary Nano brings credibility to Indian engineering Honda must revisit online dealer sales of service pacts Chrysler got it right Mandates, markets and buyer demand For Detroit, some things never change Buick: As Chicago goes, so goes the nation Auto industry has lost a good man Accentuate the positive Ex-Porsche CEO: Cayenne spiced up sales Green programs shape battle for engineering grads Tata rewards suppliers with ties to India Bill aims to set minimum sound levels for vehicles Industry lobbyists step up emissions fight Seeking wider market, Nissan equips sports car for snow New chief of SAE has D.C. skills China and GM's answer to Nano — sort of $2,500 car is Ratan Tata's personal quest NADA offers training in risky credit Donna Harris Deal's goal: Widen appeal of dent-repair coverage Title committee created Vehicle loan delinquencies rise from 2007 Suppliers to the 2009 Tata Nano Odd China combo: Fuel sippers, SUVs Pontiac Vibe: A sporty hauler with Toyota touches Dealers J.D. Power III named tracking company partner Toyota will buy back rusted Tacomas 100,000 Flex sales a year? Farley: 'Absolutely' Ford wants word-of-mouth campaign Small suppliers feel the pain of axle strike Plastech tries to sell 2 units TRW plant will build Ford gears Toyota plans 2nd India plant Dodge launch goes digital Toyota, GM recall 660,000 vehicles for window flaws Lear announces white-collar layoffs March output drops 23.6% New Ford ads tout quality improvements Tata dealers must be handy with a wrench Can the Greens slow down the autobahn? Racy scandal for race exec Echoes from the grave: Olds still has cachet The Final Say

Automotive News - April 14, 2008

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