GM Ups Buick Investment

CHICAGO – General Motors Corp. is pumping more money into Buick’s revitalization effort beyond the $3 billion originally announced here at last year’s Chicago Auto Show.

“It’s up a little bit,” GM North America President Gary Cowger says. “It’s generally in that ballpark. It may be $3.2 (billion) or something like that. But it’s directionally right where we said.”

The supplementary $200 million spent on Buick is not for additional models, but rather mostly for technologies, such as the QuietTuning sound dampening used in several Buicks, Cowger reveals, including the ’06 Lucerne sedan unveiled here at the 2005 Chicago Auto Show.

“It’s mostly laminated steel, laminated glass, extra sound deadening,” Cowger says, “but it’s also technology in the engine, isolation of transmission-emitted noises, (vehicle) body-transmitted noises and isolation of road-transmitted noises. But it’s expensive; it’s not cheap.”

’06 Buick Lucerne

Since GM announced the Buick investment last year, Buick has started selling the LaCrosse sedan, Terraza minivan and Rendezvous Ultra cross/utility vehicle and dropped the Regal and Century sedans from its lineup. The Rainer SUV also joined Buick’s lineup in 2003.

“Fundamentally, Buick has a brand new showroom,” Cowger says.

More new products likely are on the way this decade, including a replacement for the Rendezvous and a rear-wheel-drive car.

GM is attempting to position Buick as “American premium luxury” – just a notch below its Cadillac luxury nameplate. That transition will be difficult. Buick has been a primary culprit in GM’s decades-long market-share decline, and the average age of its buyers is among the oldest in the industry.

Buick’s sales declined 8.1% in 2004 vs. 2003. But Cowger believes the brand is ready to turn the corner this year. “Perception is the biggest problem we have,” he admits. “We’re starting to see it (change). But perception doesn’t change overnight. Perception lags reality.”

Skeptics say GM needs a heavy dose of reality if the auto maker believes Buick’s repositioning will be successful. But Buick General Manager John Larson quickly denies the division’s future is in doubt.

“Absolutely not,” he says. “I think Buick has legs and a wonderful premium opportunity where we can make a lot of money.”

Larson says Buick will focus its marketing efforts on its quality scores – among the highest in J.D. Power surveys. “We’re not as relevant as we should be, given our products,” he says. “There are many competitors who wish they had the quality we do. Acura, Mercedes, BMW and Toyota (brands) are behind us in quality.

“We’ve got to make it very clear to consumers that our products are higher quality,” Larson adds. “Our actual performance is significantly above the perception of quality. We’ll start right there.”

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