For Buick, China market outshines U.S.

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General Motors Corp. CEO Rick Wagoner and SAIC Inc. chairman Hu Maoyan present the Buick Riviera coupe concept at the Shanghai auto show. GM China designer James Shyr said the model offered luxury and elegance.

DETROIT - Buick may be shrinking in the United States, but it's thriving in China.

Last year, for the first time in its history, the brand that boasts golf celebrity Tiger Woods as its chief spokesman sold more cars in China than in the United States. And that gap is likely to widen now that Buick is one of China's top-selling car brands, General Motors Corp. chief executive officer Rick Wagoner said last month in Shanghai.

Buick, which has whittled its U.S. lineup to three vehicles, sells eight models in China and has more on the way to feed demand from a growing Chinese middle class of what GM executives and analysts call aspirational car buyers.

"The vision in China for Buick is the premium, yet attainable, brand for the upper-middle-class customer," said Joseph Liu, GM China executive director of vehicle sales, service and marketing. "Buick is for China's new generation of elites in pursuit of success, who want grand, elegant, contemporary design."

Sales of Buick in China already are a bright - and profitable - spot for GM, which still is working to return its North American auto operations to profitability. Those operations lost $85 million in the first three months of the year, but a $127 million profit in China helped boost the company to an overall profit of $62 million for the quarter.

Buick in China played a big role, with sales of the brand growing to 303,150 last year from 110,763 just four years earlier, in pace with GM's overall growth in China in the same period and even outpacing industry expansion in the world's fastest-growing market. U.S. sales of Buick shrank to 240,657 last year from 432,017 four years earlier.

By most accounts, the future of the Buick brand in China is bright and likely to become brighter.

Buick is aiming its marketing and lineup not just at the current upper middle class, which the research journal McKinsey Quarterly estimates at 10 percent - or 130 million - of China's 1.3 billion people, but at the 520 million up-and-comers whom McKinsey expects to make up the upper middle class by 2025.

Buick's China lineup includes hatchback, sedan and wagon versions of the Excelle; the Regal and LaCrosse midsize sedans; two minivans; and the new $65,000 Park Avenue sedan, launched earlier this year, which the company defines as mid-luxury.

"The Park Avenue interior is really incredible," said IRN Inc. auto analyst Erich Merkle. "And the GL8 minivan over there is a status symbol in the business community."

Many businesspeople in China use minivans or roomy sedans for escorting associates and clients during the week and then use them to drive family members on the weekend, Merkle said.

Buicks in China range from as much as $65,000 for a Park Avenue to $13,900 for an Excelle.

Chinese Buick customers see themselves as hip, successful and increasing in power and accomplishment, Liu said.

Buick is focused on service and offers a program called Buick Care that invites owners to join a club that gives them access to cultural events and invitations to movie premieres. It provides 24-hour towing service; appointments for vehicle service; service hours from 8 a.m. to 10 p.m., 365 days a year, and four annual free inspections.

The new luxurious and futuristic Buick Riviera coupe concept shown at the Shanghai auto show last month embodies what the modern Chinese Buick customer is looking for, GM China designer James Shyr said: luxury and elegance.

GM China also is working on a hybrid Buick sedan for the China market.

Although GM has no current plans to expand its Buick line in the United States, the efforts spent appealing to the Chinese middle class with fine interiors and designs, such as those of the new Riviera and Park Avenue, could make their way into U.S. Buicks, Wagoner said.

"Because we're developing and growing in China, we need a broader product portfolio to support it," Wagoner said last month in Shanghai. "Some of those products can be used in the U.S. I don't necessarily mean imported, but once they're designed and developed, if all you have to do is tool it up to build it in the U.S. or Canada, that's a much lower-cost proposition.

"So I think actually a stronger Buick here actually helps the Buick brand in the U.S.," he said.


Where the Buicks Are

In the United States

Three 2008 models planned: Enclave crossover SUV, LaCrosse sedan and Lucerne sedan.

Sales in 2006: 240,657.

Sales in 2002: 432,017.

In China

Eight 2008 models sold:

Excelle (hatchback, sedan and wagon models).

Regal midsize sedan.

LaCrosse midsize sedan.

Two minivans.

Park Avenue mid-luxury sedan.

Sales in 2006: 303,150.

Sales in 2002: 110,763.

SOURCE: General Motors Corp.