The GM brand that nearly died and the unlikely buyers saving it

Brothers Matt and Andy Wonnacott of Livonia are young, single guys who choose to drive Buicks.

They are atypical Buick buyers given its reputation as an old-man sedan brand. But the Wonnacotts are unfazed.

“Look at them now, they don’t look like old people’s cars,” said Matt Wonnacott, 37, who described his 2015 Buick Regal sedan as fast, reliable and stylish. “I don’t care about perception, I just want what makes me happy.”

Andy Wonnacott, 32, has been so pleased with Buick, he is on his second Verano compact sedan in red. He said he’s “hooked” on the brand.

“They are nice looking, reliable and conventional cars,” said Andy Wonnacott.

The Wonnacotts exemplify a remarkable image change by General Motors.

Buick was the highest-rated U.S. car brand for dependability in J.D. Power’s ratings earlier this year. It is pushing up against Mercedes Benz for a top spot in consumer consideration as measured by Kelley Blue Book.

It is GM’s second-biggest selling brand globally behind Chevrolet. And, through stylish design, new SUV and crossover entrants and consistent advertising, Buick has done what GM’s luxury brand, Cadillac, has not — achieved a brand renaissance that drives increased new car sales and attracts younger buyers.

“Cadillac can learn a lot from Buick,” said Rebecca Lindland, executive analyst at Kelley Blue Book in New York. “Cadillac needs to have more SUVs and they need to be really nice.”

For its part, if Buick leaders want continued success, they must sharpen the marketing message to better articulate the reasons to buy a Buick, experts said.

“The advertising that says, ‘Wow, that’s a Buick?’ is ready to evolve beyond the apology,” Lindland said. “They don’t have anything to apologize for anymore.”

GM’s slow-rising star

At a glance, Buick’s success story is simple. Call it luck or genius, less than a decade ago, Buick’s marketing and product developers foresaw consumers’ evolving preference for SUVs and crossovers instead of sedans.

Under GM product boss Mark Reuss, designers and engineers moved swiftly to create hot-looking Buick SUVs. Buick’s advertising team rebranded it as hip and the business model locked it in a niche where it successfully toggles between luxury and mainstream.

Meanwhile, Buick has become integral to GM’s profits. It is GM’s biggest selling brand in China, the world’s largest car market.

That’s a remarkable feat considering that 10 years ago, Buick’s sales sputtered and the brand teetered on the edge of GM’s chopping block, along with the now-defunct Pontiac and Saturn brands.

Yet at the end of the first quarter, Buick was nipping at the heels of Mercedes Benz for consumer consideration, coming in sixth overall among 17 luxury brands, according to Kelley Blue Book’s BrandWatch quarterly survey.

Cadillac was in the seventh spot for consideration in the survey results, said Lindland.

For the first quarter, GM reported Buick’s global sales rose 9.2 percent to 332,321 vehicles. A decade earlier, in the first quarter of 2008, Buick reported it sold 122,412 units, a Buick spokesman said.

“Buick is capturing attention,” said Phil Brook, Buick and GMC’s vice president of marketing.

It caught the eye of 38-year-old Lauren Scott of Springfield, Mo. She traded in her Chevrolet Cobalt compact sedan for a Pacific Blue 2017 Buick Encore compact SUV last summer.

“I just really like Buick. My grandparents had Buicks, and the view of Buick was it was for old people,” said Scott. “But when you take it on the road it is like sitting on a couch. And it is really cute.”

Nimble and quick

Nearly three-quarters of Buick’s sales currently come from crossovers and SUVs, versus in 2013 when the bulk of Buick’s sales came from sedans, Lindland said.

“They moved very fast in that SUV space and they brought out very nice products,” Lindland said. “They’ve done that premium step that separates them from Chevrolet.”

Buick’s Brook characterizes the vehicles as affordable luxury. Year to date, Buick’s average transaction price for cars is $31,009. For crossovers, it’s $28,715, a Buick spokesman said. Buick’s new Avenir sub-brand, which represents about 20 percent of Enclave sales, is upscale and priced at $53,500 compared to $40,000 for an Enclave.

Kelley Blue Book’s estimated average transaction price for light vehicles in the U.S. was $35,285 in March 2018. For luxury compact SUV and crossovers, it was $44,497.

Buick’s position between volume and luxury presently gives it a competitive edge, said David Sargent, vice president J.D. Power’s global automotive in Los Angeles. But, he warned: “There is always a fear of a squeeze-out if true luxury brands come down market a bit,” and some volume brands go upscale.

Buick has locked in a reputation for quality, though. J.D. Power’s 2018 U.S. Vehicle Dependability Study, released early this year, ranked Buick third, topped only by Porsche and Lexus.

Chevrolet is ranked sixth, but GMC falls below the industry average as does Cadillac, which landed 27th out of the 31 brands. The study measures the number of problems per 100 vehicles original owners experienced during the past 12 months of 2015 model year cars.

Buick’s product unpredictability

The Enclave SUV, which launched in 2007, helped spark the brand’s transformation, Lindland said.

Brook said Buick leaders then looked for “white space opportunities” to make the brand stand out in the crowded car market. One of those was tiny SUV space made with Buick Encore in 2013.

“We had to create that (small SUV) segment. That wasn’t something that existed in the U.S. a few years ago,” said Brook. “Now everyone is rushing to get in it.”

The sporty Buick Cascada convertible coupe, which went on sale in 2016, drew new customers to the brand, Brook said.

“We really tried to break down the old stereotypes of what people thought,” said Brook.

Another “white space” product is the 2018 Buick Regal TourX hatchback wagon, he said.

“We think of ourselves as a big, small brand,” said Brook. “We have the resources of General Motors behind us making us big, but we’re small and agile enough to take advantage of trends in the markets.”

Buick has also served as a guinea pig to test new product and technology before GM takes it to other brands.

Last fall, Buick put the air ionizer, which purifies the air inside a car, in the 2018 Encore in China, U.S., Mexico and Canada and the 2018 Enclave in North America.