Buick-GMC dealers pulled through a relative product drought in 2011 with respectable sales gains. Now, they're gearing up for an expanded lineup.
Buick's U.S. sales rose 14 percent last year, after Buick finished as the fastest-growing major U.S. brand in 2010. GMC rode a comeback in pickup and SUV sales to a 19 percent increase in 2011.
The focus for this year is improving the customer experience. General Motors is accelerating its effort to position Buick as an "attainable luxury" brand. And GM will try to move GMC more upscale by giving its vehicles content and features not found in Chevrolet showrooms.
The recently launched Buick Verano compact sedan and other new vehicles have luxury buyers taking the franchise seriously, says Mike Bowsher, co-chairman of Buick-GMC's National Dealer Council. But dealers must improve their customer service, he says.
Bowsher, who has three Buick-GMC stores in the Southeast, spoke with Staff Reporter Mike Colias.
Buick's momentum cooled last year after a big comeback in 2010. Are dealers fazed?
Our momentum continues to grow based on the product and being able to get it. Especially with the Verano coming on, assuming they can build a bunch of those. As we continue to add to the portfolio, 2012 should be another good year for Buick. The customer who three years ago said, "I can't drive a Buick, because that's what my grandpa drove," we're not hearing that anymore. We might hear that from one out of 100 people. We used to hear it from 50 out of 100. We're having 20-year-olds come buy our stuff now.
Do Buick-GMC dealers see themselves as luxury dealers?
You go to dealer meetings now and there's a groundswell of normal dealers out in God's country who want things like advertising standards and courtesy transportation. They know now that Buick is a luxury brand. They see the franchise value. A big majority of the dealer body sees the opportunity that we all have and wants the dealers as well as the factory to seize the moment. Because this door is open and it may not open ever again. And if we don't run through it, what are we going to miss?
The Verano is Buick's first compact in a long time. What do dealers think?
It's a great car. You've got a car that starts at $23,000 and goes up from there. It's a luxury car. It's a new segment for us and it's going to bring more buyers to the brand.
Some dealers have complained that the price difference between the Verano and Regal is too small.
That is an issue. I think as you take Regal up to more of a performance model, it might help define that a little more in terms of what role the Verano plays. If you stick with the turbo and Regal GS model and that sort of stuff, and carve out those distinct markets, I think we'll be OK. But it's definitely a concern. But from what I'm seeing right now, you'll have some Verano folks coming in saying that it just isn't quite large enough, so we'll have the Regal for them.
At what point does the Regal become Buick's performance nameplate?
I think it's got to. You've got two cars sitting real close. It only makes sense to push one out on the performance side. And honestly, the car's got the capabilities. You look at the GS. That car will snap your head back. What we're challenging dealers to do is define Regal as performance, and Verano as entry-level luxury.
What do dealers think of the new Buick Encore that was shown at the Detroit auto show?
I think you'll get some young, maybe newly married professionals into it. But I would tell you that it should appeal to empty nesters who don't need the big car. The Enclave is a large vehicle. Encore brings them down and gives them great fuel economy. And it looks awesome. We can't wait.
How are customers receiving the new IntelliLink infotainment system?
We've got it in Terrain and Verano. Right now it's new to market. We need to make sure our folks, service advisers as well as our salespeople, are well-trained on that. One of the biggest challenges we have as dealers across the board is technology training. We've got to get everybody trained up. I've got news for you: That's going to be a big differentiator against the competition. It's where it's all going.
Is GM giving GMC enough attention and resources?
We're tooling right along. But it's like anything else: About the time you start taking something for granted, you get your rear end handed to you. We have stuff coming. The Denali line continues to be extremely successful in both the pickups and SUVs. The Denali Acadia -- you still can't keep it in stock. You can't get them. As we round out the Denali line, that's an opportunity for us. It's a money maker for dealers big time. It's become its own brand. Are there other things we can do with that? It's something we should look at.
Is anything missing from GMC's lineup?
I'd like to see one exclusive GMC model. I'd like to see one vehicle that you have to come to a GMC dealership to buy, that our sister divisions don't get. Just one.
What about Buick?
We're getting the Verano and Encore. I think they've got a great plan laid out. There's more stuff coming. This franchise is on a roll and GM knows it. They're going to continue to support it.
How far along is a loaner program for Buick?
The national dealer council unanimously has asked that GM work toward making it a mandatory program in 2013. I'd say we have half of our volume in it now. Not half our dealers, but half our volume. We need 100 percent of our volume in it. We've moved the needle quite a bit, but not fast enough.
Our biggest opportunity is customer experience. Courtesy transportation is not a game-changer. But it helps us close the gap. You've got Lexus, BMW, Mercedes all with mandatory courtesy transportation. We can't have our luxury customers being put in substandard imports.
What about facilities? Are dealers behind GM's Essential Brand Elements program, which pays them quarterly bonuses to help renovate their stores?
If you're McDonald's, put the damn arches up. I'm sure there will be some fallout, but the vast majority is signed up and headed in that direction. The two-year extension through 2016 was a game-changer. The math worked for a lot of people after they did that. Look at where Buick was and where it's heading now. The vast majority of dealers see that and want to seize the moment. Dealers aren't waiting for GM to tell them. There are some pretty smart dudes out there who say, "If we don't get these things in place now, we're going to miss out."
Should Buick dealers be able to land some of the former Pontiac, Saturn and Saab customers? Are they?
Oh yeah. GM has done a fairly decent job of trying to show the love to these discontinued franchise owners. There are millions of them. We need to embrace them, as we're doing, and continue to show the love. They're there, they're our customers, and they're being picked to death by the competitors. So we can't take them for granted.
Have dealers found advantages to a post-Pontiac world?
The first year and a half was violent. Many Buick-GMC dealers wanted to continue to be Pontiac-type dealers. I would tell you that the majority of Buick-GMC dealers today are outselling themselves as solely Buick-GMC dealers, without Pontiac. If you're not, it's your fault.
Those of us still trying to hold onto the Pontiac days probably won't be around in the future. The franchise has changed for the better. If you haven't drunk the Kool-Aid, you won't be around long.
Does Buick's marketing that emphasizes "accessible luxury" resonate?
I think so. We're seeing these new customers come in. Let's just stay the course and don't get away from what's brought all these import buyers in our stores. I think Buick is in a great spot. Most people who buy Audi, Mercedes and Lexus are still in a spot where they can afford those. But they're also like, "Ya know, I almost bit it three years ago in the financial crisis. I'm not sure I need to do this big-dog stuff anymore." So they come down a notch, and that's where Buick sits. I think it's a really smart play.
How has the new GM been on allocation?
The question continues to be where this market may head in the next two to three years. If it goes to 16 million, can they build our fair share? But this leadership is very well in tune of getting more out of less. What they've done to get us more Terrains is a good example. Nobody ever gets enough of the hot stuff. Can we build enough to keep up with the surge that could be heading our way in the next 24 months? That's something dealers have to trust GM to handle.
What do dealers think of the leadership team at the brand and corporate level?
It's the best I've ever seen it. This dealer council works great with Brian Sweeney [vice president of sales and service for Buick-GMC] and Tony DiSalle [Buick-GMC vice president of marketing]. As for GM's leadership, common sense prevails. These guys -- especially [GM North America President] Mark Reuss -- they operate like, "If it makes sense, we do it. If not, we don't." Dealers understand him. He makes sense to us.
Are Buick-GMC dealers profitable? Do you expect to be profitable in 2012?
Are they making money on new-car sales?
I think all new-car departments for every manufacturer continue to be a big challenge with the competition and margins involved. But without new-car sales, you can close all of us, regardless of the manufacturer. I'll tell you this: We are way more profitable in the new-car department today than we were three or four years ago.
How has the factory support been for certified pre-owned?
Good. They revamped the program this year to make it way more competitive. They added free maintenance, extended warranty. They're doing a way better job online. But certified pre-owned is something we all need to focus on continuing to grow.
Are dealers using the new GM Financial? Is it allowing them to finance more used-car and subprime buyers?
GMF needs to continue to explore more ways to do more business with Buick-GMC dealers. Verano and Terrain offer a lot of opportunity. But competition is good, whether it's between GMF and Ally Financial or whoever, dealers are benefiting. But we need to do more business with GMF, whether it's leasing or whatever.
What is the dealer council's biggest focus or concern for 2012?
The No. 1 thing is customer experience. We've got to answer the call of these luxury buyers. The faster we get courtesy transportation programs or maybe 24-hour roadside assistance or other standards that these luxury buyers expect, the better we are.
Dealers care about one thing: franchise value. That's what's going to make it worth something. Let's prove to the luxury buyer that we can answer the call and their luxury expectations after the call.