Buick to drop Verano after short 2017 run – Automotive News

DETROIT — The Buick Verano will stay in production for an abbreviated 2017 model year before being phased out this fall.

General Motors, in a statement Thursday, said Verano output at its Lake Orion plant in suburban Detroit would wind down in October. Automotive News reported this month that GM had decided to end the compact sedan’s run in the United States, even though the nameplate will live on in China.

The move spotlights how automakers are rethinking product portfolios amid what many executives and analysts believe is a permanent shift toward crossovers and SUVs.

“The decision underscores the changing consumer market dynamics where there is a growing demand for SUVs in North America,” a Buick spokesman said in a statement. GM notified plant workers on Wednesday and dealers were told of the decision during national meetings in Austin, Texas, this week.

Low gasoline prices and improved fuel economy have encouraged many consumers to give crossovers, SUVs and pickups — largely abandoned during the 2008-09 financial crisis — another look.

U.S. demand for cars is off 5.5 percent through April this year while light truck deliveries have climbed 11 percent.   

“One of the underappreciated risks to the U.S. auto space is the emergence of the sedan recession, in which excess supply and weak demand for sedans is likely to yield added price pressures,” Barclays analyst Brian Johnson said in a report this month.

Buick positioned the Verano as a premium small car priced in the mid-$20,000s upon the nameplate’s late 2011 launch, above mainstream players such as the Honda Civic and Ford Focus but below the Lexus IS 250 and other luxury small cars. It rang up more than 40,000 U.S. sales in 2012, its first full year on the market, siphoning away demand from the sportier midsize Regal sedan.

Deliveries peaked at 45,527 in 2013 but never reached that level again, though, as Buick shoppers increasingly opted for the Encore subcompact crossover, which has become the brand’s top seller since its early 2013 debut.

Buick chief Duncan Aldred acknowledged in January that crossovers will account for more than 70 percent of Buick’s U.S. sales once the Envision compact ramps up sales, starting in June.

U.S. sales of the Verano slid 27 percent last year to 31,886 and are down another 12 percent this year through April to 10,624. There were about 10,000 Veranos on dealer lots or en route to stores as of May 1, a 113-day supply, according to the Automotive News Data Center.

GM introduced a redesigned Verano for China last year. It shares its underpinnings with the recently redesigned Chevrolet Cruze.

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