Buick News: GM Seeks An Exemption To Exclude Buick Envision from Tariffs

[William Maley]

The Buick Envision finds itself in a tough spot. General Motors has been exporting the model to the U.S. since 2016. But with the on-going trade-war between the U.S. and China, it means the Envision could smacked with a 25% percent tariff. That is why GM is asking for exemption on the model.

In a statement provided to Reuters, GM said that it filed the exemption request on July 30th to the U.S. Trade Representative. In the request, GM makes some sound arguments as to why the Envision should be excluded.

Price is major factor. If the vehicle is hit with a 25 percent tariff, GM would be forced to pull it from the U.S. unless it wants to a take serious loss on each model.

Why not build it here? The Envision has been a target of critics of Chinese-made goods, including leaders of UAW. GM explains that the sales volume of the Envision doesn't justify moving it to the U.S. Last year, Buick only sold 41,040 Envisions in the U.S. In China, Buick moved about 210,000 models. In addition, the current Envision is reaching the end of its current lifecycle before the company could make the preparations to build the model here.

GM also makes the argument that the loss of the Envision would put them in a distinct disadvantage against foreign competitors such as Acura and Volvo.

You can check out GM's request on regulations.gov website, which is tracking requests for exclusions from the Section 301 tariff.

If the Envision does get hit with a 25 percent tariff, GM has already taken some steps to relieve some of the pain. Before the higher import tariffs went into affect, GM shipped in a six-month supply of Envisions that would be hit with the much smaller 2.5 percent tariff. This should keep dealers happy in terms of stock and not having to deal with a higher price. 

Source: Reuters, Regulations.gov

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[David]

Thank you GM for thinking ahead and bringing in a supply while this stupidity of Tariffs gets sorted out. 

Edited August 4, 2018 by Drew Dowdell
Removed political comments

[smk4565]

No, No, No.  If there are 25% tariffs then it should punish GM just as much as it punishes Toyota or Honda.  First off I believe there should be no tariffs on anything, but if there is a 25% tariff then everyone should get screwed.

[Suaviloquent]

This same company got bailed out by taxpayers, is now rewarded with the Trump tax cuts.

 

The Envision is pathetic and the competition is light years ahead. I know what you would say to that @dfelt

 

Tax that thing out of existence I say, it’s a burden on our society and here’s the case where an import tax will ensure that the domestic make isn’t being incentivized to be mediocre cause it’s protected.

[A Horse With No Name]

The Stupidity of our ruling class grows by the day.

[David]

11 minutes ago, Suaviloquent said:

This same company got bailed out by taxpayers, is now rewarded with the Trump tax cuts.

 

The Envision is pathetic and the competition is light years ahead. I know what you would say to that @dfelt

 

Tax that thing out of existence I say, it’s a burden on our society and here’s the case where an import tax will ensure that the domestic make isn’t being incentivized to be mediocre cause it’s protected.

WOW, You make me have to question if you have really ever been in an Envision. They are NOT mediocre to the competition. Way better than most.

[riviera74]

Somebody needs to tell @Suaviloquent that without China, Buick is as dead as Olsdmobile since 2004. 

While imposing a 25% tariff on Chinese goods is bad policy, China is NOT going to defend America's IP with any consistency.  An open market for any particular good ensures competition actually improves product, as opposed to protectionism which maximizes mediocrity.  Why would China ever change its policies to compete in a global market based of accepted rules rather than pursue the mercantilism that has pulled them from the abject poverty of 40 years ago?  The only mistake GM made is to build the Envision and the Encore in or near their largest market.  No one anticipated the tariff escalation tit-for-tat that has come from this president.

If you wish to buy a midsize (now compact) crossover NOT made in China, buy an Equinox or a Terrain (made in CANADA), or better still a Cadillac XT5 (Spring Hill, TN).

[Suaviloquent]

I actually have nothing against Buick, it’s just that the Envision is class average at best. It’s comparable to a Lexus NX. That’s faint praise if any. 

I’d much rather get an XT5. Not that much more expensive but you just get a much better auto.

but it truly is nowhere in the league of GLC 300 or RDx or XT5. But yeah you can crow how at 25% off MSRP or 84 month notes it’s a steal. That’s fine. 

[ocnblu]

GM is getting what it deserves.  Build it here, you morons.  The only thing "idiotic" is the idea that a Buick should be built anywhere else but the USA.  Or at least North America... at the VERY LEAST.

Yes, the Buick Envision is a completely invisible product with no design flair, nothing at all special to distinguish it as a Buick... it is a cheap Chinese knock-off of a "Buick" and I said that from the moment I saw it.

Also I GUARANTEE you that between its forgettable design and execution, PLUS the fact it is widely known to be an "All-American" Buick made in CHINA are YUGE reasons why it is not selling well.  Duh.

Edited August 4, 2018 by ocnblu

[Drew Dowdell]

2 hours ago, ocnblu said:

GM is getting what it deserves.  Build it here, you morons.  The only thing "idiotic" is the idea that a Buick should be built anywhere else but the USA.  Or at least North America... at the VERY LEAST.

Yes, the Buick Envision is a completely invisible product with no design flair, nothing at all special to distinguish it as a Buick... it is a cheap Chinese knock-off of a "Buick" and I said that from the moment I saw it.

Also I GUARANTEE you that between its forgettable design and execution, PLUS the fact it is widely known to be an "All-American" Buick made in CHINA are YUGE reasons why it is not selling well.  Duh.

That ignores reality. Three out of every four Buicks sold are sold in China. It makes more sense to build all of them there and import them to the US. That's the basic premise of build it where you sell it.

[ocnblu]

2 hours ago, Drew Dowdell said:

That ignores reality. Three out of every four Buicks sold are sold in China. It makes more sense to build all of them there and import them to the US. That's the basic premise of build it where you sell it.

Well then, Obama's team should have "leveraged" GM to kill Buick and let Pontiac live.

[William Maley]

4 hours ago, ocnblu said:

Also I GUARANTEE you that between its forgettable design and execution, PLUS the fact it is widely known to be an "All-American" Buick made in CHINA are YUGE reasons why it is not selling well.  Duh.

There is actually a bigger reason. Allow me to pull some quotes from Reuters.

Quote

“The previous price point was too high” on the 2018 Envision, said Casey Clark, sales manager at Serra Buick GMC Cadillac in Washington, Michigan, in an interview. “That put off some customers.”

Quote

GM had lowered prices by as much as $2,500 on the 2019 models, which it started shipping in late April. That means Buick’s 2,000 U.S. dealers should have lower-priced Envisions to sell well into the fall.

 

[Drew Dowdell]

11 hours ago, ocnblu said:

Well then, Obama's team should have "leveraged" GM to kill Buick and let Pontiac live.

And right there is the reason you're not CEO.

Pontiac, at the time, was not global. It offered little to nothing over a Chevy or Toyota. It was entirely GMs fault for letting it get there, but that was still the reality of the situation at the time. There totally should have been a new Bonneville, Grand Prix, Grand Am, heck even a new Vibe, Torrent, and a real honest to goodness crossover Montana... But there was no money. 

Buick had sales both here and in China, Pontiac did not and the sales here just weren't profitable.  

Trust me, I know how you feel. Olds was the most technically advanced division outside of Cadillac at the time of its demise. But if sales and profitability aren't there, gotta be a businessman and make the tough call. 

 

[regfootball]

On 8/3/2018 at 6:07 PM, dfelt said:

WOW, You make me have to question if you have really ever been in an Envision. They are NOT mediocre to the competition. Way better than most.

The Envision is a good vehicle, the MSRP's are far too ambitious, but just if you judge it as a Buick its pretty good.

Buick has been kept alive here because of China, and GM benefits from selling mondo vehicles in China.  It's not unrealistic to expect them here to import something from China....

IF

they export from the US to China too.....

Buick doesn't need to sell more than 40,000 Envisions because they shouldn't be playing so much in the compact class anyways with the Terrain in the showroom and the Enclave being what most Buick buyers are really looking for anyways.  Buick should have an Edge competitor, like the Enspire concept to compete with Lexus RX etc.  Buick needs to add models to gain US volume more than it needs to have more than 40,000 Envisions.

I'm not one for big auto tariffs but overall China benefits a lot more from our trade than we do from theirs.  That's not any kind of endorsement for anyone's trade strategy.  It should be noted that GM is more and more shifting their production of a lot of US sold vehicles to be made across the world.  Gradually and sneakily since the 2009 era they keep moving production to other countries.

Biggest challenge for the Buick products is to determine global design.  The Envision looks like a 2012 retread (the 2019 updates do clean it up some) and with the Opel deal gone, Buick may have to decide if they are committed to producing any of these white space vehicles in the US the next model cycles...... IMO for example the Regal should be revised to be made on the same line as the Malibu since they are bed buddies.

What else is kind of interesting, the Envision doesn't seem like it's been here long, and there are not many of them out there.  But already now they have established 4 separate model years of the vehicle here in the states.  Pretty crazy.  That is how the import brands establish a model, sneak it into the market and build the nameplate brand.  So now it is becoming an established nameplate for Buick and building the Envision brand name.  Shoppers now will be more confident buying the nameplate because its been around 'for awhile'.

Edited August 5, 2018 by regfootball

[regfootball]

12 hours ago, ocnblu said:

Well then, Obama's team should have "leveraged" GM to kill Buick and let Pontiac live.

Then Pontiac would have also been selling 1.4 and 1.5 litre turbo cars too, to bow to the gods of CAFE like Chevy has had to.  Lots of CVT equipped next ever G6's......

May have been best that Pontiac was let to die rather than the 'first ever G2' crossover....... or more Vibes

Edited August 5, 2018 by regfootball

[regfootball]

12 hours ago, William Maley said:

There is actually a bigger reason. Allow me to pull some quotes from Reuters.

 

GM's strategy on everything the last few years and surely for awhile back even now is to pump up the MSRP's to ridiculous levels compared to the competition and incentivize the hell out of them.  Gives the marketing types a reason to keep their jobs, keep changing the incentives twice a month, between regions.  They can sit and look at sales spreadsheets on their office computer screens while they sip their mochas.  "Oh this month we need to move the GMC Sierras!". and then 'all Sierras 22% off MSRP!'  And the other models sit and rot on the lots until they get their turn at special month of incentives.

 

3 hours ago, Drew Dowdell said:

And right there is the reason you're not CEO.

Pontiac, at the time, was not global. It offered little to nothing over a Chevy or Toyota. It was entirely GMs fault for letting it get there, but that was still the reality of the situation at the time. There totally should have been a new Bonneville, Grand Prix, Grand Am, heck even a new Vibe, Torrent, and a real honest to goodness crossover Montana... But there was no money. 

Buick had sales both here and in China, Pontiac did not and the sales here just weren't profitable.  

Trust me, I know how you feel. Olds was the most technically advanced division outside of Cadillac at the time of its demise. But if sales and profitability aren't there, gotta be a businessman and make the tough call. 

 

The way Cadillac is going, it may be the next to go, and then we will be glad that Buick is the last remaining premium GM car brand.....because of how well Buick does in China.

 

Edited August 5, 2018 by regfootball

[balthazar]

20 minutes ago, regfootball said:

GM's strategy on everything the last few years and surely for awhile back even now is to pump up the MSRP's to ridiculous levels compared to the competition and incentivize the hell out of them.  Gives the marketing types a reason to keep their jobs, keep changing the incentives twice a month, between regions.  They can sit and look at sales spreadsheets on their office computer screens while they sip their mochas.  "Oh this month we need to move the GMC Sierras!". and then 'all Sierras 22% off MSRP!'  And the other models sit and rot on the lots until they get their turn at special month of incentives.

Pretty wild theory- have a list handy that illustrates that?

[riviera74]

I personally doubt that Cadillac will actually disappear at all, unless GM itself goes under.  Only exception to that rule would probably be the Corvette.

As for raising MSRPs and then creating incentives, GM has not backslid to the "move the metal" era that led to BK nine years ago.  I agree that the whole "incentive a month" plan is long-term stupid and that needs to actually end, especially since we have reached peak auto sales in the last two years.  As long as ATPs are up and stay up, profits and cash flow will follow.  Of course, GM will have to trim back production somewhat so that the specter of "move the metal" does not return with a vengeance.

[ocnblu]

19 hours ago, William Maley said:

There is actually a bigger reason. Allow me to pull some quotes from Reuters.

 

OK your point is taken.  We will see if this pricing strategy makes the Envision suddenly appear on customer radar despite its hypocritical manufacturing point and its entirely boring design.  They did the same thing with the South Korea made Encore (South Korea being a bit less scary than China).  Did Encore sales discernibly uptick at the moment the prices were dropped, or have they been on a steady uptick that cannot be attributed to a price drop?

[Drew Dowdell]

Pricing on the Envision is still too high.  It's hard to make a good case for it when the Terrain sits in the same lot and has a better base powertrain while feeling roomier.  I'm a Buick guy and I'd still probably pick a Terrain Denali over an Envision due to the pricing of Envision.

[regfootball]

7 hours ago, ocnblu said:

OK your point is taken.  We will see if this pricing strategy makes the Envision suddenly appear on customer radar despite its hypocritical manufacturing point and its entirely boring design.  They did the same thing with the South Korea made Encore (South Korea being a bit less scary than China).  Did Encore sales discernibly uptick at the moment the prices were dropped, or have they been on a steady uptick that cannot be attributed to a price drop?

The last 2-3 years the Encore has been Buick's entry model and often is sold at prices around the 20 grand mark....more optioned at 20-25k.  I don't have numbers for Buick as a whole but the salesguy I talked to recently at a BGMC dealer said the Encore is by far the most popular (Buick) seller at their dealership.  Pricing is the big reason.  What that says to me, Buicks cannot support European level pricing.  So that's why we have 52,000 LaCrosses that they can't even mark down to 40k and move.  So to Balthazar's point go look at just about any Buick dealer website anywhere, the ones that post their prices if they have to mark it off 10 grand off sticker, that's an overpriced sticker.  GM's tendency the last few years is then advertise 15, 18, 20, 22, 30% off MSRP in national and regional ads and on their own websites.  What the hell more proof do you need.  It's ridiculous to say they don't have the incentives they used to.  That's wrong, they have just as many or more.  They haven't blasted the incentives on the Envision as much on the Buicks until about the last 9-12 months or so. Buick has a huge problem with not selling through their model year inventories.  There is always a lot of dealers that have still 2017's that are new.  By this time next year there will still be tons of 2018 new Buicks rotting on lots everywhere.  Why?  TOO HIGH MSRP vs what people willingly pay.  Buick's terrible at leasing too.  2018 Regal comes out of the gate with a 24 month residual of less than 50%.  What does that tell you.  People that analyze the market say the MSRP is too high too!

So partially the Encore takes some of Envision's sales if the pricing is too close.  When the Encore is cheap, why step up to the Envision if it's 10-15 grand more?  Unless you like horrible dash PLOOD.

Buick's sales would explode if they created great leasing for all their vehicle lines.  Buick is perhaps among the most lease averse brands out there.  The Encore and Enclave are the only ones that get good lease support, that's why they sell so well.  Admittedly the Enclave is such a good product in such a hot segment that it may not need incentives as much as the rest of Buick.  But the Encores are heavily subsidized.

Edited August 5, 2018 by regfootball

[regfootball]

5 hours ago, Drew Dowdell said:

Pricing on the Envision is still too high.  It's hard to make a good case for it when the Terrain sits in the same lot and has a better base powertrain while feeling roomier.  I'm a Buick guy and I'd still probably pick a Terrain Denali over an Envision due to the pricing of Envision.

I like the Envision a lot, but the terrible plood on the dash might even be a deal breaker for me on that, even if it were a steal on pricing.

[balthazar]

So that's why we have 52,000 LaCrosses that they can't even mark down to 40k and move.  So to Balthazar's point go look at just about any Buick dealer website anywhere, the ones that post their prices if they have to mark it off 10 grand off sticker, that's an overpriced sticker.

I might value anecdotal over hyperbole, tho ultimately I'd prefer empirical.

My local Buick dealer current has (1) '18 La Crosse. It's sticker is $50,985 and its advertised price is $48,690, a difference of $2295. Guessing that would slot it under "well priced".
They also show a brand new '17, MSRP: 48,995, advertised price: 45,390, a diff of $3605.

I mean, I'd LIKE to believe 🙄 Buick has thousands of unsold LaCrosse's sitting there at $10K off sticker, I just am not finding anything close to that with a random cursory glance.

[regfootball]

this is random with a little time on autotrader and google and not at all uncommon from what i see browsing from time to time

http://www.everettbgmc.com/VehicleSearchResults?offer=76455410&search=new&year=2017&make=Buick&model=LaCrosse&trim=all&cs:o=76455410

even without the stupid 'dealer trade discount' that is still fairly typical of what you see if you look around at competitive dealerships

 

 

Edited August 5, 2018 by regfootball

[regfootball]

this was back from 6 months ago when i emailed my mom regarding regals.  you walk into the dealership and not at all shy about it.  Now that Regal body was newly outgoing, but the point is why did they need to move 2017's in the first place.  and its not atypical for this to go on on any Buick at any time depending on how the mocha sippers behind the screen in the Buick marketing department like to selectively stockpile seen and unseen incentives at will.  That particular month they had a slew of Regal Sport tourings all were MSRP 32k and above and they were selling them starting at 18 grand. 

 

still sucks my mom didn't take advantage of this.  Regal Sport Touring with moonroof nice tan leather, 18 grand.

 

Edited August 5, 2018 by regfootball