Bellwether Buick

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“This is not your father’s Oldsmobile” ran the slogan General Motors used in vain to revive that dowdy brand before finally pulling the plug eight years ago. Earlier this week, GM released Tiger Woods as sponsor of the equally dated Buick, whose sedans typically attract buyers a little over twice the golfer’s age, or old enough to be his father. The 105-year-old marque, long positioned as an entry-level luxury car behind Cadillac, today epitomises both the challenges and opportunities of its parent.

American carmakers will soon return to Congress with plans to utilise billions in government loans to restructure themselves without declaring bankruptcy. Congressmen mulling this request might want to visit their local Buick dealership. They should have no trouble finding one, with 2,751 nationwide the last time the National Automobile Dealers Association counted, more than double those selling Toyotas. As a result, only 88 Buicks a year are sold per dealer versus 1,821 for Toyota, whose sales are spread across fewer brands. Barring Chapter 11, multiple brands and excess dealerships can only be remedied with billions in dealer buy-outs due to state protection, as seen with Oldsmobile.

On the other hand, Buick epitomises much that GM has done right lately. For one, it is a leading brand in China, its big growth market, where it outsells the US and earned cachet from being driven by the last emperor and being the first car to enter the Forbidden City. Back at home, it recently won awards for quality and has begun luring slightly younger drivers with its Enclave crossover, while consolidating four sedan models into two new ones. Buick has even considered introducing a model designed for China to the US.

Cash constraints today make it hard for GM to realise this global vision or to cull its bloated line-up. Buick may be worth keeping, but bankruptcy would allow it to weigh the costs and benefits properly.

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