Buick smart to trade up from Verano to SUV – Detroit Free Press

I like the Buick Verano a lot, but I also like reports that Buick will stop building the compact luxury sedan in the U.S.

It’s a simple case of return on investment. Dropping the Verano frees Buick to pursue bigger game: crossover SUVs.

GM won’t talk about the Verano’s future, but a usually reliable Mike Colias writes in Automotive News that General Motors will not replace the current model at the end of its life cycle next year.

Buick dealers and buyers aren’t likely to notice the loss. The brand is in the midst of an historic transformation.

A full two-thirds of Buick sales this year are SUVs. That proportion will swell further this summer when the Envision compact SUV reaches dealerships.

Buick will probably sell many more Envisions — at considerably higher prices — than it does Veranos. The Envision is a better use of sales and marketing resources.

Consider: Buick sold 10,624 Veranos in the first four months of this year, compared to 23,808 Encore subcompact SUVs. The Encore also sells at higher prices — MSRP $25,385-$31,285 vs. $21,990-$28670 for Verano.

Buick hasn’t announced prices for the Envision yet, but it will cost many thousands of dollars more than the Encore. You do the math: Buick is better off emphasizing hot-selling crossovers.

The picture gets even brighter for Buick next year, when it replaces the big Enclave family SUV, the brand’s oldest — but still most profitable — vehicle. Buick is GM’s fastest growing brand. It posted 1.2 million sales last year, second only to Chevrolet within GM.

In addition to the popular SUVs, Buick’s success owes to GM’s decision to link its passenger car development to Opel, GM’s German brand. That’s how Buick got its first legitimate modern sport sedan, the all-wheel-drive Regal GS, and the Verano. Opel could provide another small car from Europe in the future, as it does with the new Buick Cascada convertible.

There’s no chance the Verano will be replaced with a car from Buick’s Chinese operations.

The workers who build the Verano in GM’s Orion assembly plant just north of Detroit should hope they’ll get a snappy little crossover when Verano production ends. They’ve done a fine job making the Verano compact and Chevrolet Sonic subcompact, but small cars have fallen out of favor with American buyers, replaced by crossovers. Orion got a well-deserved kudo when GM decided to build the vital Chevy Bolt electric car there. It deserves a second vehicle  likely to be a strong seller to provide some job security.

The Verano will probably live on through the end of the 2017 model year in late summer, 2017. Sharp shoppers should put it on their watch list as a potential good buy. Prices generally fall for vehicles that are being discontinued, even solid ones like the Verano, and particularly the perky Verano turbo, which beats luxury compacts like the Mercedes-Benz CLA 250 and Audi A3 on price and power.

Get one while you can.

Contact Mark Phelan:  313-222-6731 or mmphelan@freepress.com. Follow him on Twitter @mark_phelan.

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