Q&A: HENRY BROWN, BUICK-GMC NATIONAL DEALER COUNCIL

Buick-GMC expects fresh products to attract shoppers

Henry Brown
Age: 69
Dealer since: 1970
Dealership: Henry Brown Buick-GMC, Gilbert, Ariz.
Average monthly sales: 175 new, 100-120 used
Quote: "Buick is very committed to the leasing program. We're not about to lose the first customer."
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Buick-GMC dealers hope that several key additions to the brands' vehicle lineups will drive showroom traffic this year.

The product infusion will come on the GMC side of the showroom. Heavy-duty versions of the GMC Sierra pickup hit showrooms in January. The redesigned 2015 Yukon and Yukon XL, the first redesigns of the big SUVs in eight years, should go on sale by March. That will be followed by the launch of the 2015 GMC Canyon by late summer.

Buick gained market share last year, spurred by product launches, while GMC's share remained flat. The Buick Encore hit the market in February and quickly was established as an early success in the trend toward premium small crossovers, topping 30,000 sales.

The redesigned 2014 Sierra pickup has helped dealers' bottom lines by commanding transaction prices that were about $3,000 higher than those of the outgoing pickup.

Another factor could help Buick-GMC dealers increase sales this year: an influx of customers whose leases are expiring. General Motors expects a surge in off-lease customers across its brands this year, a byproduct of GM's resumption of high-volume leasing in the second half of 2010.

The Buick-GMC National Dealer Council has been working with GM on plans to keep those returning lease customers in the fold, says Henry Brown, council chairman and owner of Henry Brown Buick-GMC in Gilbert, Ariz.

Brown says the council also will encourage dealers to establish business development centers to increase sales. He spoke with Staff Reporter Mike Colias.

Q. How was 2013 for Buick-GMC dealers?

A. It started off with an absolute bang. We looked like we were going to be way ahead of the forecast. Then after September things got a little tough again. But overall it was a pretty solid year. We really did well on the leasing front with Buick.

Will Buick keep its momentum on leasing?

We got heavy into leasing on the Buick side last year. I think that's going to be our future. Most of these Buick customers, quite frankly, are the result of having to go out and do conquest sales. The brand took such a nosedive for a long time. It's been tough to overcome that. I think now it's a matter of getting exposure and getting people in to drive it.

Is GM committed to continuing the Experience Buick 24-month lease program?

They're working on the specifics, but in general I would say that they're very committed to making sure that we've got all of those customers.

There has been some heavy-duty planning to make sure we go recapture all those people. Buick is very committed to the leasing program. We're not about to lose the first customer. From a council standpoint, we've talked a lot about it and they've talked a lot about the best way to accomplish that.

There's a ton of effort that is going to be put toward it. I don't think you'll see leasing on the Buick side weaken at all.

On the GMC side, how has the Sierra rollout been going?

Awesome. We're a big believer in the courtesy transportation program. At my dealership we have put probably 30 Sierras into courtesy transportation. People are absolutely blown away. They rave about how quiet it is and the features. It gets back to basic selling. You just have to get them to demo the product.

GM seems to want to maintain price on the new trucks, while dealers want more incentives to stay competitive with Ford and Ram.

Dealers are dealers. You'll always hear them complain that they don't have a clear advantage. It's up to us to level the playing field and not simply sit there and wait for the biggest rebate to come along. We need to actually contact these customers and set an appointment with them so they come in to take a test drive and see how great these new trucks really are.

What type of buyer is the Encore attracting?

We totally misread the Encore at my dealership. When we first ordered those we thought it would be a cheap economy car, because we hadn't seen the pricing yet. The first ones we ordered were totally wrong. We ordered them as cheap as we could get them.

We didn't realize that was a compact luxury type of vehicle. Customers wanted the upper trim levels, a premium compact that is nicer than most of the smaller crossovers out there. We're seeing baby boomers or slightly younger. It's a nice second car. It's been a conquest car for us.

Is the Verano conquesting the way Buick envisioned it would?

I feel like Verano is ahead of where we thought it'd be. It's gotten into that younger market much better than any other Buick in the line. The young people love the IntelliLink system.

The Regal has struggled since the Verano's launch two years ago.

Yeah. You drive the car, and it's such a nice car. I don't know why that thing hasn't taken off. They refreshed it for the 2014 model year and did a great job. It's just a matter of getting people into it. We've just got to get that consideration.

GM executives have talked recently about how Buick could use a flagship. What sort of vehicle would dealers like to see?

It's funny. When you get a group of dealers together and they start talking about what Buick could use at the top of the lineup, everyone seems to have a different opinion. I think these manufacturers have a ton of research and intelligence on what consumers want and where the opportunities lie.

The research that GM does and the way they can predict how a consumer is going to react is remarkable today. As long as they continue delivering the quality product that they have been over the past few years, I don't think you'll hear many complaints from the dealer body.

Are there any holes in the lineup that dealers would like to see filled?

I think two holes already have been filled in the last two years with the Verano and the Encore. That gave us an entry level, premium sedan and a premium small crossover that are helping us to conquest customers. Sure, dealers always want more great product. But I think we're feeling pretty good right now.

Is the council encouraging dealers to establish business development centers as a way to chase sales leads?

Yes. General Motors overall has decided to get serious about pushing all of their dealers toward having a business development center. They've held all kinds of meetings encouraging dealers and a training component is included in the [Standards For Excellence incentive program] for 2014. GM would like to get dealers really committed to the process.

A lot of dealers think that once they sign up with a BDC vendor, life is good. But that's when the work really begins.

Getting people out of their comfort zone is important. They want to rely on floor traffic, but that's diminishing.

So it has become vitally important to learn how to contact your customers through your BDC. It gives the salesperson the ability to go out and make it happen, as opposed to waiting for that next customer to walk in the door.

Last year the council was putting in place a subcommittee on life cycle management. What's the status of that?

That committee is still up and running to help dealers capture the off-lease business that has started coming back to us. It's a matter of helping dealers to understand that selling the car is just the head of the process.

Once you've sold or leased that customer a vehicle, you really have to be involved in everything that happens after that, from maintenance to body repairs to tires. Making sure customers understand that we'll take care of all their needs.

The dealer council has discussed advertising standards. What's the status?

It's not much of a topic right now. The BDC concept came to the forefront. You can only attack on so many fronts, and we felt like there was a bigger need for that. And quite frankly, it's really hard to enforce advertising standards.

Has the loaner program become mandatory under Standards For Excellence for Buick-GMC dealers?

Yes. You need a minimum number. Once you get in the program and you do it right, it's just amazing what it does for you. If we're going to continue to have these customers through the life cycle, and make them not only loyal service customers but also loyal on leases and purchases, we need to have them in loaner cars.

That's why, when the new Sierra came, we put a bunch in the loaner service. We have a separate department that handles all of our loaner vehicles. That's one of the things they ask a customer: "What are you driving now? Would you like to drive a new Encore," or whatever. Then we follow up and see if they liked it, if they have any interest.

What is the dealer council's biggest focus for 2014?

I'd go back to the BDCs, for sure. The whole point of the BDC is to make an appointment and get the customer in to take a test drive. It gives you a much better opportunity to make a sale.

We have so much great product in Buick-GMC dealerships today, but there are a lot of people who might not know that. The BDC is the best tool to go out and bring them in to find out. Otherwise, all of your salespeople end up standing around bitching about how tough things are or how Ford has a better rebate than us.

You can reach Mike Colias at mcolias@crain.com.


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