Buick Bets On a Hybrid To Broaden Its Appeal

By JOHN D. STOLL
With a big hand from the government, General Motors Co. plans to launch a gas-electric hybrid Buick in 2011 that owners will be able to recharge by plugging into an electrical outlet.
GM originally intended to release the hybrid technology in a Saturn model, but it is selling that brand. Its decision to make the hybrid a Buick -- a brand that historically produced large sedans favored by older drivers -- illustrates the big challenge GM faces as it slims down after its exit from bankruptcy last month.
The crossover vehicle will use a gasoline engine aided by a battery and electric motor to boost its fuel-efficiency and -- unlike current hybrids -- should see a greater increase in gas mileage when owners charge up the battery pack, GM's new product chief, Tom Stephens, said Thursday. He declined to disclose a price for the new Buick or expected sales.
The technology is different from that GM is developing for the Chevrolet Volt, a compact car due next year. The Volt will be powered all the time by an electric motor and plug-in batteries, with a small gasoline engine used to recharge the batteries when they run down.
The Buick hybrid is expected to achieve in excess of 40 miles per gallon of gas, double the performance of a similarly sized model such as the Chevy Equinox in city driving.
The Volt, because it is supposed to drive up to 40 miles on battery power alone before the gas engine helps out, is expected to travel about 1,000 miles on a tank of gas.

To create the new Buick, GM said it will tap government funds aimed at jump-starting an electric-car industry. GM is 60% owned by the government after its bankruptcy reorganization.
The auto maker is in the process of shedding Pontiac, Hummer, Saab and Saturn and will go forward with Chevrolet, Cadillac, GMC and Buick.
To make the new formula work, GM will have to inject more excitement into Buick, expanding its appeal and widening its range of models to attract younger customers.
Along with the hybrid, which will be part of a new line of Buick crossovers, GM also now plans to produce an upscale compact car that will be sold as a Buick. The compact would put Buick into a segment of the market where it would compete with other premium small cars, such as the BMW 1 Series and Acura TSX.
The company plans to apply for a loan of about $500 million from the Department of Energy's $25 billion program to fund the production of more fuel-efficient vehicles. Most of that loan would be devoted to the Buick project, GM said. It will be GM's fourth application under the program and bring the total GM is seeking from the program to $11 billion.
The auto maker released a sketch of the new Buick at an industry conference in northern Michigan, and said the Energy Department would take the first 69 vehicles it produces.
GM and battery supplier Compact Power Inc. also plan to tap about $400 million in stimulus money the Obama administration has set aside for advanced battery production.
Mr. Stephens said government funding is "very important" to the production of the yet-to-be-named Buick and referred to the government as "our partner" on the project, saying the relationship will help minimize expected losses on the vehicle.
GM has offered hybrid systems on several models but none has generated significant sales. The Buick will go up against other plug-in hybrids and electric cars headed to the U.S. market.
Toyota Motor Corp. has been working on a plug-in version of its Prius hybrid. Nissan Motor Co. is aiming to launch an electric model called the Leaf that is also benefiting from federal loans.
Mr. Stephens and other GM managers are under pressure from the company's new board to rush the introduction of vehicles to try to halt a decades-long market share decline. He said GM's recent bankruptcy and the government's capital injection have allowed the company to speed up funding for new-product programs.—Sharon Terlep contributed to this article.
Write to John D. Stoll at john.stoll@wsj.com