General Motors (GMGMQ) has now sold 2 million Buicks in China. In the United States, however, Buick does a fraction of that business (although in America Buick only sells three models, while in China it sells five).
I worked with Buick for a while and always paid attention to the Chinese market. The story was that Buicks were big there because ages ago the emperor had favored the brand. That made sense from a cultural resonance perspective, but there was a more hard-and-fast business reason why Buicks were popular among the Chinese.
In the United States, Buick has for more than a decade now endured both brand and product erosion. The cars have usually scored high on reliability indexes, but the perception of the product was that it lagged behind its Asian competition. A LaCrosse just isn’t as good as a Toyota Camry. The brand itself, despite its long association (recently ended) with Tiger Woods, was considered stodgy.
So both the product and the brand had problems. (At one point, GM product czar Bob Lutz described Buick as “damaged.) In China, it didn’t. Over there, Buick was marketed as a luxury brand with a number of models. In the United States, it was offered as “mid-luxury,” with fewer models—a stop on the way to Cadillac.
What’s interesting here is the status that a product-brand package can have in one market vs. another. In China, Buick is the cornerstone of a global strategy and receives attention accordingly. It’s totally disconnected from the old-folks mobile its considered to be at home. Compare this with Mercedes or BMW, brands that are developed for and marketed to similar customers in Germany and the United States.
When GM emerges from Chapter 11, it will still have Buick in the United States, but it will continue its slide into niche-ification. It will be a placeholder, supported to a degree but far less important than Chevy or Cadillac. Meanwhile, in China, it will thrive. This will always be an awkward situation for GM to manage, but there’s a lesson in the struggle: Brand and product must always be carefully conjoined.
