Frank Bellavia is cheered by the early success of the Buick Lucerne sedan and is optimistic about the upcoming Buick Enclave crossover.
But such bright spots do not obscure the reality that these are dark days for Buick dealers, he says.
Bellavia, 54, is midway through a two-year term as co-chairman of the Buick Divisional Dealer Council. Buick General Manager Steve Shannon is the other co-chairman of the dealer council.
"It's a very challenging time to be co-chairman of the council," Bellavia says. He is the dealer principal at Arnold Buick-Pontiac-Saab of West Babylon, N.Y., and Arnold Chevrolet of West Babylon and Amityville, N.Y., and a minority partner in Bellavia Chevrolet-Buick of East Rutherford, N.J.
Sales data help explain the concerns of the more than 2,700 Buick dealers he represents. Americans bought 282,288 Buicks last year - down 8.8 percent from 2004, which saw a slightly up market, and less than a third of the peak year, 1984.
Despite the difficult times, Bellavia says he doesn't hear enough from other Buick dealers. His top personal goal is to get more of them to let him know about their needs and wants. He says the factory does listen and wants to help. Bellavia was interviewed by Staff Reporter Harry Stoffer.
Among the Buick models, what's hot?
I would say right now the Lucerne is hot. It's been very well received.
What's not so hot?
The Terraza and the Rainier are both challenges.
Would you eliminate any of the current models?
I don't know if they need to have the Rainier and the Terraza. The Rainier is kind of an overlap of other GM models. And so's the Terraza. Buick needs more distinctive products.
What's in the pipeline?
We have a new luxury crossover vehicle named the Enclave, and that's out in '07. It's absolutely gorgeous.
Since there's not a whole lot in the pipeline, would you say the Lucerne is a critical vehicle? And what percentage of sales should it be?
It's very important to Buick. I think the Lucerne should be about 40 percent of our sales because it replaces both the LeSabre and the Park Avenue.
What's the biggest challenge for Buick dealers in 2006?
The obvious answer is that the challenge for Buick dealers (who are not yet "channeled" with Pontiac and GMC) is to become and remain profitable. It's not as challenging and not as difficult to achieve if you have all three (franchises). It's more feasible. But the real challenge is for the dealers that are not channeled. You need to become channeled. That's the challenge.
Is the channeling strategy succeeding?
They have succeeded. But there are some difficult situations where you have dealers that are successful in their market that aren't channeled, and it's hard for one to give it up. They've handled the ones that have been the easy ones to do, the low-lying fruits, so to speak. Now they are working on the more difficult ones.
About 47 percent of our dealers are aligned with Buick-Pontiac-GMC. As the opportunities come up, they will try and combine more locations. But there is no due date for completion, and there's no plans for them to be 100 percent.
It's difficult for a single-point dealer to survive, especially with the limited amount of models.
Are some going out of business?
I don't know of any recently, but there is always that threat.
What is the dealer council's top priority for the coming year?
We always have the challenge with Buick, always looking for more product. Because that's the way they're going to revitalize Buick and have a renaissance of Buick is with product. We're always pushing for more product. And when Buick gets the product, they seem to do well, when they get the new type product. They have a good quality story.
Does GM listen to the council? Are you satisfied with the response?
Yes, they do listen to the council. They listen, but sometimes it's hard to implement everything that the council wants. GM is very open-minded. It seems they are easy to communicate with.
What has been your biggest disappointment?
One of the biggest disappointments that Buick dealers had this (past) year was they did not receive their halo car, the Velite. They felt that that would be a way to put Buick back in the limelight. It was a four-seater convertible.
That was the biggest disappointment.
How did you feel when you heard (GM Vice Chairman) Robert Lutz call Buick and Pontiac damaged brands?
I felt that it was actually devastating for Buick because the press was just relentless, and then the public picked up on it. And that's when Buick sales really declined. It's very difficult to turn that one around. And the only way we're going to turn it around is through product.
But it's very clear that our market strategy is about fewer models but not fewer brands. Buick is one of the brands that will be distinctive. And Lucerne is proving it.
Do you agree with that strategy?
No. I'd like to see Buick in more segments of the market. I'd like to see them in an entry-level market, and I'd like to see them in more segments of the market.
How does Buick's future look to you?
I think it really depends on the Lucerne. Lucerne's going to be a very key focal model of the future of Buick. Buick's going to be here. It's just going to have less models.
Are seeing younger buyers ?
A few. Not as many as we'd like. That's a challenge. And right now, although it's early in the game, most of the Buick dealers are doing well with the Lucerne, but it's (selling) to their previous Buick customers. Our biggest challenge is to have conquests.
In terms of positioning the brand, how do dealers feel about the effort GM is making?
Buick is going to be a distinct brand. It's going to stress quality and overall refinement, where Pontiac will be performance and handling. Of course, GMC Truck will be the "professional grade." (Buick's) going to be like a near-luxury vehicle, I guess. It's got the quality.
How are Buick's marketing and advertising?
Well, we've had some changes in our ad campaigns over the last three years. As you can see, we had Harley Earl, which (deep sigh, trailing off). We had the "dream up" campaign. Now we're on something about "precision." So, it's a new campaign. We'll see what happens.
Does it look OK for now?
Yeah, but the dealer body would like to see (them) stay with one campaign. Buick ranks among the top five in the industry for top quality, for long-term, ahead of Toyota and Honda. And that's what they got to stress, quality. They still have to get that message out more.
You've had employee pricing, Red Tag sales and all of that. What's the right approach?
I don't know the right approach. I know employee pricing was good for a while, but after we got off the program it was payback time. I think Buick needs to stick with sell-the-brand, sell-the-product, sell-the-value-of-the-product, more on the value-promise side. We can't have these monthly fire-sale drills. I think it hurts the brand.
That's what the dealers think?
That's some of the comments I've gotten from dealers. I try to stress the fact, as the co-chairman, e-mail me, call me on my cell phone, call me here (at the dealership). I need input from the dealer body, whether they are large or small. I don't care if a guy sells five Buicks a year or sells 200 a month. His input to me is as important. And I will bring it forward to the right people, and they do listen.
Are your dealers pretty responsive? Do you hear a lot from them?
Not as much as you would think. I think sometimes they feel it's frustrating for them and it's going to fall on deaf ears. But that's not the case. They do listen. Especially now with e-mail. It's so easy for me to get an e-mail from a dealer and forward it on to anybody at General Motors. (We need) more communication.
Is it possible to make money on new-car sales right now as a Buick dealer?
(Laughs.) It's challenging. (Most make it on) service and used, fixed operations, pre-owned. It's not easy.
You didn't mention the LaCrosse or Rendezvous. What do you think of those two?
LaCrosse is a fine brand, but it's just been OK. It took the place of the Regal and Century, and I don't think it's selling anywhere near what the Regal and Century sold.
I mean, it's got a great quality story, but it just could have been a little bit more - how can I say? - stylish, I guess.
But it's a nice car. And the Rendezvous has been out since '01. So that's getting a little old. But I think that's going to evolve into the Enclave, which is the crossover luxury I mentioned before.