Buick in deep shit

[bigpoppanils]

Will Another Five Years of Tiger Woods Save Buick?: Doron Levin

Feb. 12 (Bloomberg) -- The world's most recognizable male athlete drove to the Torrey Pines Golf Course near San Diego on Monday in an unrecognizable new Buick.

The prototype of a future convertible that General Motors may or may not build drew attention and stares -- or maybe it was the driver, Tiger Woods. GM public relations people hoped the stunt might generate some buzz for Buick, a division that has just limped through its worst sales year in half a century.

Woods, who has been under contract to General Motors Corp. to promote Buick since 1999, was scheduled to tee off this morning at Torrey Pines in the Buick Invitational, which he won last year.

Woods has been rated the world's No. 1 golfer for 235 straight weeks. Yesterday he signed for another five years with GM at an undisclosed sum, which advertising professionals estimate could be more than $25 million.

Last week in Chicago, Gary Cowger, GM's president, announced that the No. 1 automaker will invest about $3 billion over the next five years for new Buick models, perhaps including the convertible.

Declining Sales

Buick's six models sold 336,788 units in 2003, down 22 percent from 2002. Only the Buick Rendezvous, a cross between a car and a sport utility -- the model Tiger drives in television commercials -- made a respectable showing. Rendezvous sales were up 18.2 percent to 72,683.

Buick's weakness was the single biggest factor behind GM's overall U.S. market decline to 28.5 percent last year. GM executives had been hoping to increase that market share to at least 29 percent. Cadillac, GM's luxury division, and Chevrolet, its largest division, gained share in 2003.

For years Buick was a stalwart, positioned as a premium brand just below Cadillac in price and above Chevrolet and other GM brands. The Buick Park Avenue sedan was a particular favorite of graying physicians, who were wealthy enough to afford Cadillacs and wanted to avoid ostentation.

Some critics have remarked, only half jokingly, that the Buick Century is the only car in the world to have been named after its target demographic group.

`Clean Slate'

Despite the oldster image, some recent Buick models have earned top quality ratings in J.D. Power & Associates initial quality surveys and by Consumer Reports. The average age of Buick buyers has risen close to 70, suggesting a doggedly loyal following that's disappearing because it isn't being replenished by young buyers.

GM has wrestled with Buick's decline for some time, though it deemed the revival of Cadillac and the restoration of Chevrolet, its volume division, more pressing.

To reinforce Rendezvous's sales momentum, GM has begun manufacturing a more powerful 245-horsepower engine, in addition to the standard 195-horsepower engine. Last week in Chicago, the automaker unveiled the Buick LaCrosse, a midsize sedan meant to replace Century and Regal sedans, available later this year.

``Buick is doing what it needs to do,'' said Jim Hall, vice president of AutoPacific, an automotive consultancy. ``Generation Y, those in their mid-20s, have no image of Buick. It's a clean slate.''

120 Per Franchise Annually

Also later this year, dealers will get Terraza, a Buick version of GM's minivan that's to be sold as the Chevrolet Uplander, Saturn Relay and Pontiac Montana SV6. The automaker is calling the new models ``sports crossover vans,'' reflecting styling changes to make them look more like sport utility vehicles.

``Our dealers tell us that customers keep coming in and buying. After buying four Centuries, some are saying, `What else have you got?''' said Pete Ternes a GM spokesman.

GM dealers I know are restless, skeptical that creating Buick clones of models already being sold will do much more than create greater competition among themselves. (The Buick Ranier sport utility closely resembles the GMC Envoy and Chevrolet TrailBlazer; the Rendezvous is a more attractive Pontiac Aztec.)

The 2,800 U.S. Buick franchisees are selling an average of only about 120 vehicles annually, which provides little financial incentive to invest in their operations. (The 200 or so Toyota dealers nationwide, by contrast, each sell an average of about 8,000 vehicles a year.)

The prototype that Woods drove this week almost certainly was a new GM architecture, code-named Zeta, the basis for several new rear-wheel-drive models around the world, including a replacement for Buick's Park Avenue.

It's unimaginable that GM's pitchman, with all the cars that are in his garage, actually would choose to drive a Buick when he's at home, away from cameras and the eyes of his adoring fans.

If General Motors can convince him one day to drive a Buick without paying him millions, then the automaker will have pulled off something impressive.