Buick struggles to find new customers as sales have dropped for seven straight months

Article by Christian Andrei, on May 30, 2012

Buick is on a 7-month losing streak and doesn’t have new or refreshed vehicles on the way in order for sales to pick up. This ties Buick with Cadillac for the most months of declines among the 41 brands available in the U.S. But then, Cadillac is likely to get a boost from its two nameplates that will arrive this summer.

Since Buick was able to stay alive past GM’s restructuring 2009, it has been on track for a comeback. Buick now has to figure out if the decline is indicative of more serious troubles or just growing pains now that GM is serious about Buick being a rival to entry-luxury brands like Acura and Infiniti. One of the major reasons for the decreasing sales is caused by Buick’s move to raise the brand's image and improve residual values.

For instance, GM has lessened Buick sales to rental-car companies. For many years, this practice has eroded the brand's value. In the first four months of 2012, Buick sales to fleet customers (most of which are rental-car companies) fell by two-thirds compared to the same period the previous year. This is a significant change in Buick’s strategy, which has historically depended on rental-fleet sales.

For instance, fleet sales made up about 15% of Buick's sales in the pre-recession and pre-bankruptcy year of 2007. A GM spokesman said that this year until April, fleet sales were at 7%. In addition, Buick has cut back on consumer incentives. This may hurt sales in the short term but GM hopes that it will result to dividends soon for a better image and higher prices. According to TrueCar.com data, Buick's incentive spending dropped to 10.1% of its average transaction price per vehicle through April after recording 11.5% in the same period last year.

Topics: buick, sales

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