GM looks to Encore small crossover to expand Buick's reach

Tue Jan 22, 2013 12:58pm EST
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By Ben Klayman

BIRMINGHAM, Mich (Reuters) - General Motors Co (GM.N: Quote) is counting on the new Encore small crossover vehicle to bring more new customers to its premium Buick brand.

The Encore, which went on sale in U.S. show-rooms last week after launching last fall in China, is the fifth vehicle in the Buick brand, joining the larger Enclave crossover and the LaCrosse, Regal and Verano sedans.

Buick's U.S. sales rose 1.6 percent last year to 180,408 vehicles, a six-year high for the brand. But LMC Automotive senior analyst Joe Langley says it has a tough road ahead.

"Buick still remains a small player in the market and faces many challenges," he said. "While a good strategy to try and have Buick serve the entry luxury market, it will come under pressure as well-established brands with far greater prestige enter the space over the next several years, such as BMW (BMWG.DE: Quote), Mercedes-Benz (DAIGn.DE: Quote) and Audi(VOWG_p.DE: Quote).

"Buick is already having a difficult time carving out a place in the market and the down-market push by the German luxury brands will make that mission that much more difficult," Langley added.

LMC expects GM to add another small crossover and a compact hatchback within a few years, with the Encore's annual sales hitting about 30,000 vehicles. The brand's overall U.S. sales are expected to top 280,000 vehicles in 2017, according to LMC.

Buick executives did not reveal what sales volume they expect the Encore to generate, but they anticipate it will help further boost demand at Buick.

"There's a lot of momentum in this brand," Tony DiSalle, Buick marketing vice president, said at an event outside of Detroit.   Continued...