Buick, GMC: 'This conquest train just keeps rolling'
Mike Bowsher: "We need to continue a strong lease program. The Experience Buick program has been big to get new folks in."
Last year, sales of both Buick and GMC lagged the industry's 13 percent industry growth, ending a streak of two years in which both brands picked up market share. Buick rose just 2 percent in 2012 to 180,408, and GMC rose 4 percent to 413,881.
That didn't faze Buick-GMC dealers, says Mike Bowsher, co-chairman of the Buick-GMC National Dealer Council. That's because dealers are pleased with the new vehicles that General Motors is shipping to their stores.
On the Buick side of the showroom, dealers look forward to this month's rollout of the Encore, a vehicle that GM believes will break new ground as a premium, compact crossover. On the GMC side, they're awaiting the early summer arrival of the redesigned 2014 Sierra pickup.
In the meantime, dealers will focus on bigger lease penetration and staff training on infotainment systems and other technologies, Bowsher says.
Bowsher, who sells Buicks and GMCs at three stores in the Southeast, spoke with Staff Reporter Mike Colias.
Both Buick and GMC sales trailed the overall industry last year. Are dealers concerned?
The second half of the year was much better than the first half, so we've got momentum rolling into 2013. We've got these additional models with Encore and the '13 Enclave, which should continue to attract import buyers. This conquest train just keeps rolling.
Dealers' concerns that the Buick Verano would erode Regal sales have come to fruition. What should be the future role of the Regal in the lineup?
Personally, I think Regal needs to continue to take more of the performance role. The GS model has been popular. I'm a big Verano fan, but I'll tell you, there are certain markets in the U.S. where Regal is very strong, like the north central region and in south Florida. Those dealers would have a big problem if Buick wasn't putting effort behind Regal. Each car needs to have its own space. I'm a proponent of pushing Regal toward the performance, sportier end of the lineup and letting the Verano be the entry luxury car that it is.
Is the Verano conquesting the way Buick envisioned it would?
Yeah. It's allowing us to reach a whole new customer, and it's a price point we needed.
The people who buy the car just absolutely love it. The average age has come down. It's heavy conquest. We've just got to continue the momentum and stay strong on that car because it brings us new buyers.
The Encore is a very small vehicle. Who will buy it?
I think it'll be a mix of empty nesters and young folks. A large part of the market wants an SUV. But they might not want something as big as an Enclave or an Acadia. We run into that all the time. They don't need it that big, but they prefer the SUV style. This gives us something to fight with. When you show somebody who's looking at a Verano that they can have an SUV for about 1,500 bucks more, that's a no brainer. This is going to open up a ton of opportunity for us. We can't wait for this thing. Our salespeople are pumped.
Buick has three sedans and now two crossovers. How many vehicles would dealers ultimately like to see in the lineup?
Do we have a halo car? I hope so. Is it some big, bad-ass luxury car? I hope so. Maybe we round out with six or seven different models. Are they going to build a Grand National? I don't know, but I think those are the questions dealers have. If we round out with seven models, including a halo car and one specialty model, that would be awesome.
We had been down to two models. You can't support the infrastructure of a dealership like that. I do think GM has been strategic on how they've added each model back in.
GM's pickup inventory has been running high for a year now. How have GMC dealers been managing that?
It's a funky deal because they're taking plants down to retool for the all-new truck. You can't get yourself short. I've been stocking up huge because I don't want to run short if they take down their plants. A big December right-sized my inventory.
This market is going up. Our traffic is crazy. Lots of dealers are going strong and they want to be in the earning position to get the new Sierra the fastest and in the biggest quantities. It's turn-and-earn.
What do dealers think of the new Sierra? I've heard good things as well as some complaints that it looks too much like the current one.
People who say that probably haven't seen it close up. They've got to touch it. This truck was engineered from a customer-focused point of view and for the first time ever a product advisory board made up of 15 dealers. Twenty-nine out of the 30 suggestions from dealers were implemented. So GM ran the show with input from the customer and the dealer. Before, we were never allowed in that holy realm.
What other products are dealers looking forward to?
The [reskinned] Acadia Denali is a smash. That thing is going to sell bigger than GM thinks. They're going to have to increase their penetration of Denali models on that. I think it could bump up against the Enclave a little bit because now people can pick from two really premium crossovers. The Yukon and Yukon XL look great. Every component you wish the current one had, it's got.
Anything missing in GMC's product lineup?
The Canyon pickup. But that's a '14 story.
Do dealers back GM's pickup strategy to stick with the Chevy Colorado and GMC Canyon when its rivals have left that segment?
They understand the errors of the past really well. When you get the whole picture of Canyon, you're going to get really quick how it fits. I see stocking 100 of them. Right now I might stock two of them. It's going to be a game changer.
Has Buick-GMC lifted its lease penetration? How high would you like to get it?
Absolutely, and we need to continue a strong lease program. The Experience Buick program has been big to get new folks in. The 24-month leasing has been a big hit. I'm leasing close to 60 percent of my Buicks, and that's helped increase my GMC leasing into the 30s. You're talking about the Southeast, where lease penetration runs about 10 percent.
Will GM keep that Experience Buick 24-month lease program in play?
The 24-month was the tip of the spear. What it did was generate a bunch of 39 months. It sells them on the car, and then many of them decide to forgo the free stuff that comes with the 24-month lease to get to the 39-month. We did a ton of them.
I am going to fight on national dealer council every day to keep the leasing going.
We have started a new subcommittee on life-cycle management with a focus on keeping leasing strong and transitioning customers back into lease deals. We are going to get very serious on life-cycle management.
The dealer council has discussed advertising standards. What's the status?
That is still on the docket. I wouldn't say we have anything structured yet. We're kind of self-policing ourselves to do the right thing. We can't have this quality, premium product and sell it like you're Costco or Wal-Mart.
The dealer council had discussed making a loaner program mandatory by this year. What's the status?
We made it mandatory for '13. Well, it's a mandatory component within Standards for Excellence. If you want to be in GM's SFE program, we made courtesy transportation mandatory for that program. We can't be putting service customers into some substandard import.
What is the Buick-GMC dealership-overhaul program doing for the image of these brands?
Sales are going up. Talk to anyone who's completed an image building and ask them if their sales have gone up. They'll all say yes. It's an investment in your brand, and it leads to an increase in your sales. I've done many of them, and my sales go up every time. Some dealers don't like them. We can't please everybody.
What do dealers think of Buick's and GMC's national marketing and advertising?
That's always up for debate. I would tell you this: Directionally, everyone likes the way we're heading. In terms of Terrain and Acadia, everyone is directionally fine with that. Buick -- every engaged dealer gets it and understands that we must attract this new customer.
What about Tier 2 advertising? Are local marketing groups embracing the national stuff?
The more we can tie in the local marketing associations, the better the return. One plus one turns into three.
I think most groups -- there might be one or two renegades -- but most understand the fact that we need that similar look. [Buick Vice President of Sales] Brian Sweeney has done a great job because his group goes around about every quarter for these LMA leader meetings to get their opinion before the creative is cut. So if you've got any complaints, get them out now.
What do Buick-GMC dealers think of GM's allocation system?
I've not heard about any problems in the last 12 months.
Are Buick-GMC dealers profitable?
Absolutely. If you're not, that's a problem.
Are they making money on new-car sales?
Yes. I will tell you we're making a lot more money in new cars now than we used to.
How has the factory support been for certified pre-owned?
That's big on our agenda for '13. Can't say much more than that.
Are dealers using the new GM Financial? Is it allowing them to finance more used-car and subprime buyers?
We have a lot of work to do on GM Financial as it relates to Buick-GMC. It's getting better, but still, the preferred partner for Buick-GMC dealers is Ally. There are some dealers seeing a little bit of success on leasing, but it's not broad enough to discuss.
What is the dealer council's biggest focus for 2013?
We've started two subcommittees this year. One is on training for all aspects -- leasing, technology, a bunch of stuff. I'd like to see not one or two technology experts per store, but every salesperson should be a technology expert. The second subcommittee is for life-cycle management and will emphasize the use of business development centers to set all the appointments and handle all phone calls and Internet leads.