This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

GM's Buick Encore, With Unique Niche, Is in Short Supply

Stocks in this article: F GM HMC NSANY TM

DETROIT ( TheStreet) -- As U.S. light vehicle sales head toward a fourth consecutive year of growth, the shortages of the Ford (F) Fusion are drawing attention, but Fusion isn't the only vehicle for which demand is exceeding supply.

GM's (GM) Buick Encore compact luxury crossover is down to a 15-day supply. "Initial demand was greater than expected," said Buick spokesman Nick Richards. "I wouldn't call it a shortage right now. (Encore) is just selling extremely well.

"We're currently tracking about a 15-days turn rate," Richards said. "We have more arriving every day, so dealers are seeing inventory improve. We're also seeing customers order a greater percentage of high-content vehicles than originally forecast. The top two trim levels account for more than 50% (of sales), with the feature rich 'Premium' top trim level turning the fastest."

Through July, Encore sales totaled 15,428, including 3,176 sales in July, its best month ever. Overall, Buick sales rose 14% to 16,393 in July, when total light vehicle sales rose 14%. Through July, Buick sales rose 12% to 117,230: during the same period, light vehicle sales rose 8.5%.

A recent headline in Automotive News proclaimed "GM moves to ease shortage of 'red hot' Encores." The trade publication reported that: "GM underestimated initial U.S. demand for the Buick Encore when it was launched in January and says it recently boosted output of the crossover at a plant in South Korea."

Encore's success is due largely to its dominance of the subcompact luxury crossover market, where it is in fact the only competitor. Encore "combines subcompact size, luxury amenities, fuel economy and price," Richards said. "There really aren't any other competitors that offer this combination right now."

Independent Boston-based auto analyst John Wolkonowicz said the Encore's secret is that "it looks like a miniature version of the Buick Enclave," a full-sized luxury crossover that signaled the re-invention of Buick when it came to market in 2007.

"A lot of people would love an Enclave, but they said 'I don't need a vehicle that big,' " Wolkonowicz said. "There is a market for small premium crossovers and there are very few of them. Buick has taken a very successful vehicle and scaled it down into what is another very successful vehicle, a darn good-looking little crossover."

Encore is slotted between lower-priced subcompact crossovers, such as Nissan (NSANY) Juke, Mitsubishi Outlander Sport and Suzuki SX4, and the higher priced Mini Countryman, BMX X1 and Land Rover Evoque. "We see a lot of the customers coming from compact crossovers" such as Toyotas (TM), Hondas (HMC) CRV and Ford Escape, Richards said.

Automotive News called the Encore "a pioneer in the nascent market for small premium crossovers," but said "Audi, Lexus, Lincoln and Cadillac all are likely to throw their own small premium crossovers into the fray over the next two years."

Kelley Blue Book analyst Karl Brauer said Buick "is doing all the right things (as) it continues to recover from the stigma of being for older people, but it's a long trip back." The brand survived brand consolidation at GM, he reminded, only because of its popularity in China. GM said last week that China sales rose 11% in July as Buick deliveries rose 26% to 66,208.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs