Cram a lot of horsepower under the hood of a car and strap on some comically large tires, and auto critics will drool over it -- even if sales are likely to be limited to Silicon Valley royalty and a few oil sheikhs.
That’s why the new Ford GT and Acura NSX supercars have dominated media coverage of this year’s Detroit auto show. But the most important car at the show may be one that got far less attention: the Buick Avenir sedan.
The Avenir is a “concept car” Buick isn’t manufacturing yet, but the concept alone reflects a major shift in the way Buick’s parent General Motors (GM), and other big automakers, are bringing cars to market. “It was probably most important thing at the auto show,” says analyst Dave Sullivan of consulting firm AutoPacific. “General Motors isn’t thinking of the U.S. with the Avenir – it’s thinking of the Chinese market.”
That’s right – China. GM didn’t pitch the Avenir as a Chinese play at the Detroit show, but Buick is one of the most popular brands in China, thanks to the brand’s debut there in 1911 and several Chinese leaders, including post-World War II premier Zhou Enlai, who rode proudly in Buicks. Many analysts believe Buick — a sleeper brand in the U.S. market — would have been killed following GM’s reorganization following bankruptcy in 2009, if not for one thing: it’s GM’s best chance to target China’s nouveau riche and its booming middle class.
[Get the Latest Market Data and News with the Yahoo Finance App]
GM is one of the strongest automakers in China — with about 14% market share — due to its long presence in the country and the shrewd choice of local partners. Of GM’s U.S. brands, Buick sells the most in China, followed by Chevrolet and Cadillac (the GMC truck division doesn’t operate in China).
China, in fact, has become indispensable to GM. The automaker and its joint-venture partners sold 3.5 million vehicles in China in 2014, the most ever for GM. In the United States, GM sold just 2.9 million vehicles in 2014. GM’s domestic market is more profitable, partly because the pickup trucks and SUVs popular in the U.S. cost more and have much larger profit margins. But auto sales in China are growing much faster than in the U.S. and other mature markets, which is why automakers are vying bumper-to-bumper for traction in China.
The Avenir, if Buick decides to build it, would be the flaghip vehicle atop the Buick lineup, perhaps landing in the $45,000-$60,000 price range and competing with models such as the Mercedes E Class, the BMW 5 series and the Lexus ES or GS. While it might earn some street cred for Buick among critics, it probably wouldn’t be a huge seller in the U.S., since it would be an arriviste in a crowded field taking on some of the most prestigious brands around.
The reception in China could be a lot different, though. “The Avenir would be a type of chauffeured vehicle for Chinese business people, and would probably sell like mad,” says Sullivan. “People there have been salivating for a car like this.” It helps that GM came up with distinctive styling that evokes the land yachts of yore, with a few exotic curves. In a market like China where Buick is already a hit, buyers seem likely to reward innovative design.
While all the big automakers are focusing on China, Chinese-made vehicles may soon sneak into the U.S. Analysts have been waiting for a Chinese automaker such as BYD or Chery to be the first to export cars to America, but Volvo — owned by a Chinese concern since 2010 — now seems likely to be first, with plans to export the Chinese-made S60 sedan to U.S. showrooms sometime this year. Made in China, sure. But China is becoming more like the United States every day.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
