Which of General Motors' (NYSE:GM) brands scored the biggest sales gains in 2014?
Given the truck-heavy nature of auto sales lately, you'd be excused for assuming it was Chevy, or maybe GMC, both of which had new-for-2014 pickup trucks. But the correct answer turns out to be a brand that hasn't received a lot of attention in the U.S. lately: Buick.
Now, with GM's overhaul of Cadillac hitting its stride, Buick could be next up for an interesting makeover.
Quietly, Buick has been posting some nice sales gains, and not just in the U.S.
Buick has just five models in its U.S. lineup, but one of them -- the small Encore crossover -- has turned out to be a big hit. Sales were up 53% last year, helping the brand to an overall year-over-year sales gain of 11.4% in the U.S.
Globally, it was an even better story. Buick has long been a powerhouse brand in China, now the world's largest auto market, and it posted a 13% gain in the Middle Kingdom last year despite a slowing market. As rival Ford has happily discovered, there's a strong market in China for vehicles that have premium features and a premium "feel," but that aren't ostentatious -- a formula that has served Buick well.
Buick itself isn't a truly global brand, but GM's current organization pairs it with the German Opel brand. The two brands share several models, including the Cascada convertible that GM rolled out as a Buick this past week.
That allows GM to effectively run the two as one brand from a product-development perspective, allowing for economies of scale that make Buick and Opel cost-competitive with rivals. That has helped reduce Opel's massive losses in Europe while giving Buick something of a new lease on life.
And now, the old brand could be posed to take another big step forward.
Two new Buicks in Detroit, and one was a big surprise
Buick showed off two cars at the North American International Auto Show this week. The Cascada was no surprise -- the Opel version has been on the market since 2013, and there are versions sold under GM's regional Vauxhall (UK) and Holden (Australia and New Zealand) brands as well.
But the other, the Avenir sedan, was a big surprise. The Avenir is a big full-size rear-wheel-drive sedan that incorporates and updates a number of classic Buick styling themes. It doesn't break a lot of new stylistic ground, but it's a very good-looking car in person -- one that could make a strong flagship for the Buick brand.
Will GM build it? Officially, the Avenir is just a concept, meaning GM did not announce any plans to build it. But it's easy to see a business case for the big Buick.
For a while now, GM has sold a version of the Australian-built Holden Caprice (marketed in the U.S. as the Chevy Caprice police car) as a top-of-the-line Buick sedan in China. But that car is a dated model, ripe for replacement -- and with its understated elegance and roomy back seat, the Avenir looks tailor-made for the Chinese premium market.
Mechanically, the Avenir is said to share a platform with the upcoming new Cadillac CT6 sedan -- meaning it would not be terribly expensive for GM to put the car into production, and its added sales volumes would help amortize the platform's development costs.
But would such a car sell in the U.S.? That's harder to gauge. On one hand, its pricing might put it in competition with existing models like Cadillac's XTS. But on the other hand, even if the Avenir didn't sell in huge numbers, it could serve as a strong "flagship," helping to put the Buick brand on the shopping lists of more buyers.
The upshot: Buick might be about to get very interesting
GM investors have been paying a lot of attention to GM's efforts to revive Cadillac, for good reason: A strong luxury brand can make hefty additions to the annual bottom line, as companies like Volkswagen have discovered in recent years.
But with Cadillac under strong new leadership, and with a big new product plan approved and in process, it's starting to look like GM's brass is turning its attention to Buick. If the brand's quiet success in 2014 is any sign, Buick could start to get very interesting before long.
John Rosevear was very glad to see that the Avenir sported the classic tricolor Buick badge. He owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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