Buick to rival Lexus; Cadillac takes on BMW – Will it work?

Some auto-industry experts, as well as some staff members here, have openly questioned the need for General Motors to have even four brands remaining in its lineup. After decades of watered-down, rebadged products, it’s hard to see what defines a Buick or GMC and makes them essential in the brand portfolio. Plus, why does GM need two upscale car divisions positioned above Chevrolet?

At one time, GM expected buyers to progress from Chevrolets to Buicks and Cadillacs, with stops in Pontiacs and Oldsmobiles along the way. But for myriad factors, the market no longer works like that. Today, most automakers succeed with just two or three channels divided along mainstream and luxury models.

It’s pretty clear that GM argued, and the government agreed, to keep Buick and GMC because they make money. But do they make sense in the long run?

GM executives have recently made it clear what Buick and Cadillac will stand for and what will set them apart.

In a Web chat on Monday, GM product and now marketing czar Bob Lutz said, “Cadillac needs to display the characteristics to permit [it] to rival the German luxury brands. It will be Buick's task to take on Lexus.”

The next day, GM VP Global Design Ed Welburn described GMC’s design mission as “industrial precision.” We’re not sure why Chevrolets shouldn’t benefit from looking precisely manufactured, but maybe that’s just us. At least, turning a Chevrolet into a GMC doesn’t cost a lot of money. As to Buick, it may have lost its luster stateside, but it’s a hit in the growing Chinese market.

What is clear is that BMW and Lexus vehicles cater to different groups of upscale buyers, though there is some market position  overlap. With the CTS, Cadillac has shown it can be competitive with BMWs. And Buick’s upcoming LaCrosse looks promising. But the question remains: can a single company go after the two sides of the same segment, without competing with itself? Likewise, is there enough to distinguish Chevrolet from GMC?

Post your thoughts in the comments section below.

—Eric Evarts

Comments

[jg]

I believe there is a strong need for Buick for the following reasons:

1. If you have the money to upgrade to a Mercedes, BMW or Lexus....what do you buy? You knock the Lexus off your list because it doesnt have the history or prestige or cache of BMW or Mercedes. So have Buick compete with Lexus and Caddy take on the other two with bolder styling.

2. Buick quality. It rates pretty high and regularly beats ACura, Infiniti, Range Rover and other luxury brands.

3. All Buyers dont know who owns what. The world would be better off without Kia or Suzuki than Buick.

4. With the current economy people might want to buy American so their money goes to American workers spending here in America and fueling an economic comeback. Most Lexus models are made in Japan. How does buying one help the economy?

[jg]

What is wrong with offering consumers more choices? Buick and Caddy look totally different. I'm in my 30s and would buy the new LaCrosse and Enclave but would never buy a Caddy. I see it as Sopranos/rappers and in your face.

Do we really want the whole world driving Camrys? The fewer choices for consumers the fewer different cars we will see on the roads.

[Bob]

GM cars are overpriced and no one should buy them.

[Kyle]

I think it is possible to differentiate between Buick and Cadillac. Where I worry is continuing the use of front wheel drive architectures for Cadillac. Making Cadillac fully rear wheel drive and completely oriented to performance handling is the way to go. The difference becomes clear. That way it is not simply a style difference it is a clear performance and handling difference.

As for GMC what matters is it makes money. It is the brand engineering super hero. People buy them and it costs general motors little. It makes perfect economic sense and they should keep doing it.

[Derrick G]

I think much of Buick's success in China hinges on an outdated idea in China that Buick is still a symbol of having arrived in the middle class in the USA. The doctor's car image. Killing Buick in the USA would paint the car as a failure in China and kill GM's luck with it in China. That alone probably makes Buick worth saving in the US. Overall, it probably makes sense to keep something between Chevrolet and Cadillac, especially with Cadillac going after a much more sporting part of the luxury market.

[paul]

Eric, You fail to make a compelling argument for GM to terminate Buick.

In 2008, with only 3 models, Buick still outsold many brands including Audi, Infiniti, Lincoln, Mercury, Saab, and Volvo. You could make an argument that it is time for Volvo to pull out of the U.S. It is losing money and its dependability isn't very good anymore. Does Ford really need it?

Buick is the GM brand that consistently places above other GM brands in the JD Power surveys and the only GM brand to have models consistently make the recommended list at Consumer Reports.

Buick looks more like a Lexus than it does a Cadillac, so why not give people a choice? Consumer Reports could make a compelling argument that Hyundai should abandon the U.S. market. Many of its models look just like Toyota's lineup. Do we really need a Camry, a Sonata, a Maxima, etc?

Buick is also GM's oldest brand. Why get rid of it?

Do we really need 31 flavors of ice cream? Why not? Give people a choice. In this case it is clear more people chose Buicks than brands that mightb be better choices for forced retirement.

[Tom]

Re: Cadillac as BMW-fighter, the sad part about that is that GM already has the roots of a BMW-fighter in the Pontiac G8 that they're not even going to make anymore.

[Danny K.]

I think the author is missing an important point here. Car buying isn't just an exercise in buying an appliance, it is also a fashion-buying exercise.

Everyone knows that a GMC is basically a rebadged Chevrolet, but for some reason the subtle styling cues of a GMC really hit the sweet spot versus a the tacky oversized gold bow tie of a Chevrolet. Furthermore, you are missing the snob appeal aspect of owning something that isn't as ubitiquous as the Chevrolet. Indeed, the typical GMC buyer is said to be wealthier than the typical Cadillac buyer and tends to value understated luxury.

Which gets me to my next point. GM had a good strategy with Buicks and Oldsmobiles (which, to me, were essentially the same car), providing a "bridge" product, but it was poorly executed. A well-executed bargain-lux line will indeed appeal to the people who don't want to plunk down $60k for a Caddy, but don't want to drive a Chevy or shop in a Chevy environment.

This argument reminds me of the Acura/Honda distinction, where it is often recommended you get a V6 Accord rather than spending the money for an Acura TL. As the owner of a TL, I can tell you I greatly appreciate the subtle differences in the cars. it was worth every penny to me.

[Charlie]

To me, there isn't much difference in GM models. While GM might make money from having more brands, they tend to follow the "squeeze every last drop from it" ideology by making a car and designing a slightly different exterior for each brand.

Even still, another argument: Why does GM need two luxury/upscale brands, when their goals are so similar? (Compete with Lexus and BMW).

Also, addressing the topic "American cars are made by Americans, so they're better than imports". Under NAFTA, it is cheaper for GM to manufacture and/or assemble parts in Mexico than in America. 60% of that new GM car was probably made by Juan Pablo, not Joe Smith. Most parts of imports are made and assembled in America, such as Toyotas, due to that it saves the company shipping costs.

My last comment: While Buick might outsell some car brands, consider which ones those are- posted by Paul- "Audi, Infiniti, Lincoln, Mercury, Saab, and Volvo". Of those 6 brands, 5 are actual luxury brands, with prices far exceeding Buick's. It's obvious that expensive brands don't sell as many cars.

(Quick and to the point due to time restraints)

[Ian]

Buick is for old people.
and Cadillac cant even compete with bmw or lexus or benz. i own all 3 and i would never buy any american cars because Everyone knowns American products fail.
i own a BMW x5
Lexus is-f and LS
Benz-c class
i would mostly recommend those who are shopping for luxury go test drive a bmw or lexus. since those two are the best to shop for the benz are kind of getting uglier.