What Would Buick Look Like Without Opel?
“Buick revealed its Cascada convertible, an elegant four-seater that will go on sale in the USA in the first quarter of 2016. This marks another example of the two brands’ successful collaboration, which already includes the jointly-developed Buick Encore and Opel Mokka, the Buick Verano and Opel Astra notchback as well as the Buick Regal and Opel Insignia,” proclaimed Opel in January 2016, just ahead of the Cascada’s reveal in Detroit.
One paragraph. Four products that intrinsically link Opel and Buick.
It’s no surprise, then, that General Motors’ possible sale of Opel to Peugeot has those in and out of the RenCen wondering: What of Buick?
Hit up Google and you’ll find multiple thinkpieces from journalists on both sides of the Atlantic regarding where the chips will fall once a deal is done … if it’s done. GM dumping Opel on the French after nearly 88 years of ownership is bound to have massive ramifications, most of all in Europe where Opel has plants in multiple countries throughout the continent.
The more things stay the same, the more they change
Opel, by most accounts, is thought of as a feeder for Buick product. You’d be forgiven for taking this approach to understanding General Motors’ global product as many of Opel’s nameplates predate their Buick cousins, and Opel in Europe easily outsells Buick in North America by a factor of four. But flip that on its head by placing Opel in the “Buick Junior” position and you’ll have a better understanding of the dynamics at play within GM.
In 2016, Buick was GM’s second-largest global brand with 1,432,679 sales. Only Chevrolet, with its massive footprint in the Americas (North and South) sold more vehicles — 4,177,484 units over the same period. Opel and Vauxhall combined don’t even make it on the podium; the third place spot goes to Wuling of China with 1,359,638 global sales. Instead, Opel/Vauxhall placed fourth with a combined 1,180,645 sales in 2016. (If you’re wondering, Cadillac is second last, leading Holden by approximately 200,000 sales.)
“Buick is GM’s second-largest international brand with 1.4 million sales in 2016. Our product line has never been broader or fresher, with seven introductions between last year and this year. Our customer base continues to grow and we’re confident in the brand’s future momentum,” said a Buick spokesperson.
So it’s Buick, and not Opel/Vauxhall, that’s driving more volume. And it’s Buick, not Opel/Vauxhall, that’s returning a profit.
Still, this sales counting by brand ignores the east/west balance of power Opel/Vauxhall provides Buick. Combining Opel/Vauxhall sales with Buick’s North American sales gives us a total of 1,429,329 units versus 1,229,804 units sold by Buick in China. Take those million-plus Opel/Vauxhall sales away from the western side of what’s possibly General Motors’ most global trio and you’re left with a Buick that’s distinctly Chinese, and the brand’s decision-making power moves to Shanghai as a result.
With that in mind, taking Opel out of play may not change Buick’s model line much in North America, but it could seriously upend where those products come from.
Going, going, gone (almost)
Stroll up to a Buick dealership today and you’re likely to find at least one or two Veranos languishing on the lot. Cars.com shows over 5,000 brand-new Veranos in inventory as of this writing. But make no mistake, the Verano, once built at GM’s Orion Assembly, went out of production in October.
It’s too bad, too, as the Verano was Buick’s best-selling model in Canada at the time.
So let’s cross Verano off the list for Buick’s 2018 roster.
The other compact in the Buick lineup, the Cascada, is a niche player without domestic production. Surprisingly, the Cascada sells more often in America than in Europe by nearly 2 to 1, but it exists in America because Buick saw an opportunity to bring it from Poland without major investment. It would be a fool’s errand to produce it here after an Opel sale sees global volume halved for a next-generation model.
So that’s gone, too, sometime in the near-ish future.
Safety in numbers
Have you heard? Crossovers are so hot right now. And to say Buick’s crossovers are safe in America would be an understatement considering the brand derived 63 percent of its volume from vehicles not called Verano, Regal, LaCrosse, and Cascada in 2016. (That’s up from 53 percent the year before.)
Buick’s largest people mover, the long-in-the-tooth Enclave, is due for a makeover any minute, and it’ll keep its larger-than-segment proportions, as did the redesigned Chevrolet Traverse. When the Enclave first arrived in 2007 for the 2008 model year, GM couldn’t make enough to satiate demand. Since then, demand and GM’s ability to meet it has only increased. Only last year, in its ninth year of first-generation production, did Enclave volume drop off significantly. To make up some of the difference, GM shipped a few hundred Enclaves to China, the only model that makes an Asia-bound trek across the Pacific.
Envision, thanks to its Chinese production location and America’s hunger for more crossovers, will be completely unaffected by a Opel sale to Peugeot. However, it does represent a shift eastward in power within the brand. It’s the first vehicle GM has ever imported from China, and — unlike the Enclave — it currently isn’t produced at any of GM’s domestic or global plants.
Which brings us to Buick’s smallest crossover of the bunch, the Encore — the brand’s sales leader in America.
The Encore and its Chevrolet/Opel/Vauxhall siblings are built in nearly every country you can find an electrical wall socket. However, it’s GM Korea that supplies all the Encores sold in America. (Another plant in China supplies that market.) After a deal is made with PSA, and considering the latest labor developments from Bupyeong, GM could move Korean Encore production to China as had been rumored in the past.
And why not? A Chinese-produced Encore would likely return higher profit margins, thanks to lower labor costs and other economic advantages, for a brand that’s much stronger in China and has no presence in Korea.
What is a car, anyway?
If you haven’t noticed, cars — and sedans in particular — aren’t in vogue anymore in America. Thankfully, Buick doesn’t have many of those left anymore.
The Hamtramck-built LaCrosse sedan found just over 27,000 owners in America in 2016, a stark contrast to the 92,000 LaCrosses Buick sold in America in 2005. Granted, 2016 saw a brand-new LaCrosse and 2017 will be its first full year of sales, but January’s LaCrosse sales tally of 1,307 units isn’t confidence inspiring.
It’s a different story in China. The Chinese bought LaCrosses at the same rate Americans bought Impalas, accounting for over 80,000 sales there last year. And guess what? Not a single one of those LaCrosses was built in America. Not. A. Single. One.
Granted, engineering is done on the LaCrosse and it can share plant space with the Impala domestically, so it’s unlikely to go anywhere anytime soon, but don’t hold your breath for a next-generation LaCrosse.
Regal introduces the most confusion to Buick’s domestic lineup.
With under 20,000 sales in America last year, it was outsold by the LaCrosse, Encore, and the now-nine-year-old Enclave in 2016. Adding to the confusion, the current Regal is built in Oshawa for North American consumption, and it was widely rumored the next Regal would be built in Rüsselsheim. A sale of Opel to PSA throws these rumors into disarray. And midsize sedan sales are dead. So why bother?
Again, China comes to the rescue.
Buick pushed almost 70,000 Regals out the door in China in 2016, and that was the worst year for Regal sales there since 2008. Both 2014 and 2015 saw over 100,000 Regals finding buyers in China.
If General Motors is committed to selling the Regal in North America — and that’s a massive “if” — tooling up a domestic plant for its production makes little sense considering dwindling midsize segment volume and the Regal’s historic inability to carve out a significant slice of the midsize segment’s pie. Instead, bringing a Regal from General Motors’ Shanghai factory, which already produces the Regal for that market, is a sound business decision, and will likely make it Buick’s second Chinese import.
[Images: General Motors]
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