And why wouldn’t it?
By Brendan Moore
10.30.2008
Sources within GM state that there are some executives advocating the sale of Buick to SAIC (Shanghai Automotive Industry Corp) of China, their current joint venture partner for Buick in-country. Such a sale would solve two problems for GM; it would get them some desperately needed capital and it would also address the issue of having too many brands to support by jettisoning one of the brands.
It seems far-fetched to think that Buick would be sold by General Motors, but it also seemed far-fetched that GM would merge with Ford or acquire Chrysler, and it tried to do a deal with Ford several months ago, and is currently trying to buy Chrysler as I type this.
The sale of Buick actually makes more sense than either of those two moves. Buick sells more vehicles in China than the US, its down to three models here in North America, and SAIC would most likely be a willing buyer, thereby ensuring a decent sale price. Buick is a prestige brand in China. Not so much anymore here in the States, and its going to take a lot of marketing money and product to turn the perception around. It’s not looking as if GM is going to have much of either of those to spare for Buick in the near future. If GM is successful in buying Chrysler LLC, then there is even less money for Buick going forward.
From the buyer’s perspective, they get a brand going great guns in the home market of China and they get a fully-formed dealer network and a brand with at least good recognition in North America.
What’s not to like in this scenario? Its no wonder that some GM executives might be pushing for consideration of this idea – I would be as well. Desperate times call for desperate measures, and there is no more desperate time for GM than this moment currently. It would certainly bring them a lot more money than selling Hummer.
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Already saw this being knocked around on a blog a couple of days ago. And it was being dicussed earlier this year by GM as far as I know. This isn’t news and neither is the speculation about it at this point. But GM should do it because Buick is just dead weight in the American market and it doesn’t sell any cars anywhere else except China, so it should just go away imho.
The idea of Buick not under the GM banner and owned by a foreign automaker does not exactly sit well. But I can’t argue with the logic. GM could even make some more money in the interim with agreements for parts and assembly contracts with SAIC for vehicles sold here.
Nifty idea….thing is…is GM comfortable then importing & re-selling Buicks in North America on behalf of SAIC? Because if I were the Chinese then I’d want this sort of arrangement built into the sales terms.
Perhaps GM can ‘sell’ the Pontiac brand to Holden under similar terms….then Holden (and through them, HSV) manages their own importing & marketing into North America themselves rather than working to the behest of Detroit.
GM could of course ‘sell’ the Pontiac brand to Opel or Vauxhall under the same sort of conditions.
It would only surprise me if they WEREN’T considering it. Buick is used up here and is a big deal in China so they should sell it while they can still extract value for it and focus on the brands they have left. If they get Chrysler they’ll have even more brands that are have little value. If (when) they get Chrysler, it should be
Chevrolet
Jeep
Cadillac
Pontiac
Saab
Saturn, Chrysler, Dodge, Buick, Hummer and GMC need to find new homes or be put out of their misery.
This might make financial sense for GM, but it’d bring them a lot of bad PR and likely would be a bad move for SAIC in North America.
It’s no secret that Buick’s clientele is extremely “traditional” in the US. I can’t imagine many of them would be cool with Buick suddenly becoming an import brand. Nor do I see a Chinese-run Buick having any better luck growing their customer base — Buick’s image is far too old and stuffy no matter who owns them, and there will be inevitable questions about quality until Chinese car companies prove themselves here.