Buick Death Watch 2: Dealers Don't Need Buick
In the tradition of TTAC’s august founder, it’s time to do some old-fashioned myth busting about General Motors. Specifically, we’re going to talk about a myth that many of you were perpetrating in the comments of our first installment in our new Buick Death Watch series — specifically the fallacy that Buick GMC dealers “need to have Buick to have cars to sell,” or that “dealers would sue GM if they killed Buick.”
Not even, man.
I mean, if they had ever sold that bad-ass Avista pictured up there, then maybe, but Buick’s car lineup has left much to be desired in the eyes of consumers and dealers. I’ll explain a component of General Motors’ dealer compensation called “Standards For Excellence” to you, and then we’ll look at charts and numbers and data and stuff. Ready to have your preconceived notions challenged? GO!
First, let’s talk about Standards For Excellence, or SFE, as most GM dealers call it. SFE is a program that pays significant bonuses to GM dealers based on a number of ever-moving targets. I haven’t seen a PDF of the 2018 dealer program (although the employee program appears to be another humiliating kick in the crotch) so there may be some differences from 2017 that I’m not aware of.
However, for the last couple of years, it’s been like so: dealers are required to meet OEM targets for each brand they sell. For example, a Chevrolet dealer only has to meet Chevrolet targets, but a Buick GMC Cadillac dealer has to meet three different targets — a Buick target, a GMC target, and a Cadillac target. These used to be quarterly targets, but GM switched them to monthly targets a couple of years ago, meaning a dealer couldn’t make up for a bad January with a good February. Then, the company made a further change stating that a dealer had to sell one more vehicle than they did in the same period as the previous year to qualify — if you sold 15 Buicks in February of 2016, you had to sell 16 Buicks in February of 2017. Capiche? Good.
K, now imagine that you’re a Buick GMC dealer, and you have to hit both a Buick and a GMC target every month. The GMC targets aren’t so bad — after all, GMC is a popular brand with the horse racing and oil baron set in flyover country, but Buick is a tough nut to crack. In fact, it’s amazing how many GMC Acadia intenders end up buying Enclaves or Envisions instead on the last weekend of the month (thanks to some industrious dealers). I won’t name names, but I’ve been told by several dealers that they flip GMC customers to Buick CUVs all the time, as incentives are typically higher on Buicks.
Wouldn’t those customers largely be better served and be happier with the GMCs they want to buy instead of the Buicks they are convinced to buy? But what about the cars, man? GMC dealers have to have cars, right?
I did some digging into the registration data of my home state, Kentucky. These are publically available numbers, btw, in most states. I took them and I threw them into a data visualization program. Keep in mind, Kentucky should be prime Buick territory — very little brand snobbery, high “buy American” quotient, and most of the money is “old money.” Here’s all the Buicks registered in the last 12 months of sales in KY:
A quick tabulation will show you that cars accounted for only 17 percent of Buick sales in the Bluegrass last year — the rest were CUVs, and almost half were the decidedly non-premium, staring at $22,900, Buick Encore.
So, assuming you could rebrand those CUVs as GMCs and likely gain sales volume due to the superior perception of the GMC brand, do Buick dealers really need cars to sell? Let’s see how the top performing Buick dealers in the state did in volume in the last year.
Ouch. This is the Buick registration data from the top Buick dealer in Kentucky. They had a couple of months where they didn’t even break double digits in total Buick registrations. Now, let’s see how they did if we make it just cars, and exclude all CUVs.
You’re reading the data correctly — there was only one month where they hit double digits, and there were a couple of months where they sold one. I looked at every Buick GMC dealer in Kentucky, and I couldn’t find another dealer that registered more than four passenger cars in any month.
These are the Buick car registrations for the second, third, and fourth highest volume Buick dealers in KY. I think we could call these “not very good.”
So, no, GMC dealers don’t need cars to sell, because they’re not actually selling any. In fact, they probably groan every time they sell a Buick car, because now it means they have to sell one more than that to get their bonus next year. The only Buicks they are selling could easily be relabeled as GMCs. Call the Encore the “Activia” and get Jamie Lee Curtis to promote it. GMC could even go upmarket with an Activia Denali for $35k and it would be a smash hit.
Let’s consider this myth busted, shall we?
[Image: Steve Fecht for Buick]
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First, badge engineering is simply unacceptable nowadays and it has been for years. Anyone with a web browser and 15 minutes of time knows which models have badge copycats and it immediately evaporates any notion of authenticity or value. How General Motors can continue to kid themselves about this reality is beyond me. Second, GM *must* retire the Buick and Cadillac and build a new premium brand that successful people in my generation desire.
I'd like to see a ten-year plan adopted in which Chevrolet and Cadillac expand their lineups to make Buick/GMC redundant. Then kill off the latter two brands for NA, leaving Buick China-only.