Just days after Fiat Chrysler outlined plans to phase out several of its passenger car models and shift production to its SUVs and pickups, reports have surfaced indicating General Motors’ Buick will drop the small Verano sedan model as the brand shifts its own focus to a growing line-up of sport-utility vehicles.
The move would not surprise industry observers who have been observing more and more American motorists walk away from traditional passenger cars in favor of utility vehicles, pickups and other light truck models that, in recent months, have accounted for as much as 60% of new vehicle sales in the U.S.
The shift has forced manufacturers to rethink both manufacturing and product development strategies. And, in some cases, it has led them to cut back or even idle production at some of the plants producing slow-selling sedan and coupe models, such as Fiat Chrysler’s Sterling Heights Assembly Plant and the Orion Assembly Plant that produces the Verano.
Buick officials have termed reports about the Verano’s demise — first discussed by TheDetroitBureau.com in early April — “speculation,” adding that they have no current announcements regarding the small sedan’s future.
But sales of the Verano have been sliding in recent months as buyers continue to shift to light trucks. Despite the U.S. auto industry hitting an all-time record, and Buick posting its own sharp upturn, Verano sales slipped to 31,886 last year, a 27% decline.
“The world is swinging away from sedans and coupes to crossovers of all sizes and shapes,” said Joe Phillippi, head analyst with consulting firm AutoTrends, Inc.
(Light truck surge pushes April US sales to record levels. Click Here for the latest.)
The boom in light truck sales is not entirely a bad thing for Buick, however. The brand is, if anything, experiencing a strong surge in demand for its own fleet of car-based crossover-utility vehicles. The Enclave, in fact, has continued to grow sales every year since its introduction, bucking the traditional trend towards declining volume as a vehicle ages.
An updated version of the Enclave is set to reach showrooms this coming year. Buick also showed off a remake of its compact Encore utility vehicle at the New York Auto Show in March. That model, by contrast, gained 38% last year, sales surging to 67,549. It is now the Buick brand’s most popular model.
But it could face competition for the brand’s sales crown with the 2017 model-year launch of the new Buick Envision. That small utility vehicle will go into the record books as the first mainstream model imported from China. (Niche player Volvo is already importing a small number of stretched S60 sedans from the People’s Republic.)
Envision is already an unexpectedly solid success in China, more than doubling Buick’s original sales expectations – something that shows the light truck boom is becoming a global phenomenon and not just a quirk of the American market. Buick officials are hoping that Envision delivers similar momentum in the U.S.
Even before its debut, crossovers have been generating about 66% of the brand’s total U.S. sales, but that could soon take another major jump. “I believe utility vehicles will represent 70% or more of our sales in the U.S.” once all the updated models are available, Aldred told TheDetroitBureau.com during an interview at the New York Auto Show.
Though light trucks have been playing well for the Buick brand, the shift in market demand does create some challenges. Declining sales of both the Verano and the Chevrolet Sonic have already forced GM to curtail production at the Orion Assembly Plant in suburban Detroit, eliminating a shift and cutting 500 jobs.
And it has made it difficult for the maker to come up with an acceptable business plan to put into production two widely hailed concept vehicles, the Avenir and Avista, that Buick has showcased over the last two years.
“It’s always hard (making a business case) with what would be a low-volume vehicle, said Aldred, but even harder in a market where sedans and coupes are losing traction. Nonetheless, he said, “We’ll still keep looking at the numbers.”
Buick is by no means alone in having to cope with shifting market demands. As TheDetroitBureau.com reported Monday, Fiat Chrysler Automobiles will shift production of its big Ram pickup to another suburban Detroit plant currently producing the slow-selling Chrysler 200 model, the latter set to be phased out by the end of this year. And another plant in Illinois will drop the Dodge Dart in favor of several Jeep models.
(For more on FCA’s shifting production plans, Click Here.)
And domestic makers aren’t alone in having to cope with the light truck boom. Honda, which has traditionally been a passenger car-heavy brand, is about to reintroduce the Ridgeline pickup it pulled from the market two years ago.
Noting the surge in light truck sales, Honda brand chief Jeff Conrad said, “We’re trying to fortify our truck line-up. We don’t want to miss out on that.”
(First Drive: 2017 Honda Ridgeline. Click Here for our review.)