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GM Seeks An Exemption To Exclude Buick Envision from Tariffs

By William Maley

· 2,615 views

  • That 25 percent tariff could really hurt the Envision

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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    Newbie

    ocnblu

    Members

    Somebody out there compiles a chart outlining "average number of days on lot" per vehicle model.  We've all seen it referenced.

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    • Grand Master

    Drew Dowdell

    Editor-in-Chief
    8 hours ago, riviera74 said:

    I suspect that Honda has high dealer inventory turnover because Honda tends to make too few vehicles (given demand) in order to support those MSRPs.  Same with Acura, I suspect.

    This is true... Honda intentionally under-produces to avoid a situation with excess inventory.  They brag about having the lowest rental fleet sales in the industry partially for that reason.  I don't think they care about winning the volume war, they aim for per-unit profitability, thus aim to keep margins high, not just the lights on.

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    • Like 1
    Grand Master

    G. David Felt

    Members

    Latest story on auto's that the American Public do not want. Dated April 17th 2018

    https://247wallst.com/special-report/2018/04/17/cars-americans-dont-want-to-buy-3/

    #15 Buick Envision Avg days on lot 161.8

    #14 Cadillac ATS Avg days on lot 164.9

    #13 Cadillac XTS Avg days on lot 165

    #12 Buick Cascada Avg days on lot 167.3

    #11 Hyundai Genesis Avg days on lot 169.2

    #10 Cadillac CTS Avg days on lot 172.3

    #9 Buick LaCrosse Avg days on lot 175.9

    #8 Jeep Patroit Avg days on lot 176.0

    #7 Buick Regal Avg days on lot 177.7

    #6 Toyota Yaris Avg days on lot 178.4

    #5 Nissan Quest Avg days on lot 185.1

    #4 Chrysler 200 Avg days on lot 187.4

    #3 Volkswagen CC Avg days on lot 189.4

    #2 Dodge Dart Avg days on lot 207.8

    #1 Buick Verano Avg days on lot 223.6

    Buick was the top slow selling auto line in 2017. This they state is due to Americans having lost their love of sedans and coupes.  Buick Envision is the only CUV on the top 15 list and they believe this is due to inventory issues based on a lack of diverse versions as the bulk of them are fully loaded high priced models that get large discounts at the end of the year.

    Interesting point made is that the Cadillac ATS is the only car to be on the list since 2015 and is a head scratcher as they say it is a superior driving machine compared to BMW. 

    This was compiled based on 2017 data from Kelley Blue Book. They took the average number of days a model sat on the dealer's lot before being sold.

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    • Haha 1
    Grand Master

    G. David Felt

    Members

    This is the data as of 2016, I could not find any newer but it shows the average number of days in dealer inventory by segment, make and manufacturer.

    2016-10-dtt.xls

    Would love to get a 2017 version to compare.

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    • Veteran

    ccap41

    New Member

    My local dealer has on 2017 LaCrosse.

    Buick.PNG

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    • Veteran

    ccap41

    New Member
    12 minutes ago, dfelt said:

    This they state is due to Americans having lost their love of sedans and coupes. 

    Oh yeah because Buick was the world's leader in coupe sales just a year or two ago. 

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    • Haha 1
    Grand Master

    G. David Felt

    Members

    Story is a year old, but I have to say has some valid points made.

    https://www.cnbc.com/2017/04/25/cars-are-sitting-on-the-lot-longer-even-as-dealers-sweeten-the-offers.html

    They talk about how the average MSRP from all auto companies is now based on a 10.5% incentive level in the suggested retail price. This tells me that instead of selling a solid auto at a reasonable price, they are jacking up the price to then tear it down with huge incentive to artificially make one think they are getting a great deal.

    I would rather have them sell a few less auto's at higher ATP than be the volume leader.

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    • Agree 1
    Grand Master

    G. David Felt

    Members

    Searched every Buick dealer in Washington state, found one Verano on the lot, otherwise it would seem the dealers here do a better job of managing inventory than the east coast.

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    • Rising Star

    riviera74

    Members

    Move the metal is what brought GM to BK nine years ago.  Never forget that lesson.  GM generally (and Buick in particular) really needs to cut back on production just so dealers can clear inventory.

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    • Like 1
    Grand Master

    Drew Dowdell

    Editor-in-Chief
    15 hours ago, Guest Potluck said:

    why should Buick get an exemption but VOLVO or Ford not?

    Because 'Merica.

    But you have a decent point... would this change Ford's idea of building Focus in China. 

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    • Mentor

    smk4565

    Members
    On 8/4/2018 at 10:26 AM, ocnblu said:

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

    Uh, no.  The Chinese auto industry is bigger than the American auto industry.  Buick is here because of China and I think GM sold more cars in China than it did in the USA last year.  GM would have gone bankrupt again if Obama took away their Chinese business.

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    • Haha 1
    Mentor

    smk4565

    Members
    (edited)
    2 hours ago, dfelt said:

    Latest story on auto's that the American Public do not want. Dated April 17th 2018

    https://247wallst.com/special-report/2018/04/17/cars-americans-dont-want-to-buy-3/

    #6 Toyota Yaris Avg days on lot 178.4

    #5 Nissan Quest Avg days on lot 185.1

    #4 Chrysler 200 Avg days on lot 187.4

    #3 Volkswagen CC Avg days on lot 189.4

    #2 Dodge Dart Avg days on lot 207.8

    #1 Buick Verano Avg days on lot 223.6

     

    Interesting point made is that the Cadillac ATS is the only car to be on the list since 2015 and is a head scratcher as they say it is a superior driving machine compared to BMW. 

    Wait, Toyota still has the Yaris on sale?  

    That list is littered with Cadillac and Buick’s because they over built and the sales were dismal.  You don’t see any BMW, Audi or Mercedes or Acura or Lexus sedans on that list so it goes beyond “people just don’t buy sedans anymore.”

    The ATS all around isn’t a good enough product to drive demand, plus it doesn’t say BMW on it, so people don’t want it.   Cadillac’s biggest problem is image.  Take away the product and say “I drive a Cadillac” “I drive a BMW” or “I drive a Tesla” and which seems like the most envious statement?  

    For the most part, people don’t want Cadillacs, they buy them because they “got a deal” and can feel some sense of victory in getting $10,000 off sticker.

    Edited by smk4565

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    • Veteran

    ccap41

    New Member
    (edited)

    Yeah, when my Escape got wrecked my rental was a Yaris. It was a big ole POS. 

    Edited by ccap41

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    • Grand Master

    Drew Dowdell

    Editor-in-Chief
    7 minutes ago, ccap41 said:

    Yeah, when my Escape got wrecked my rental was a Yaris. It was a big ole POS. 

    I think that would have been the old Yaris... you're not wrong about it being a POS, but it's not the better Mazda built one available today. 

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    • Agree 1
    Newbie

    Suaviloquent

    New Member

    they sent 6 mos of Envision stock and Envisions stay about 5 1/3 mos on the lot before selling.

    Talk about over production. The car is over produced in China, and I believe now the real reason why the Envision came to U.S. market is because it didn’t sell as well as GM had hoped. 

    The Envisions competitors in China are the same as here.

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    • Newbie

    ocnblu

    Members
    (edited)
    6 hours ago, smk4565 said:

    Uh, no.  The Chinese auto industry is bigger than the American auto industry.  Buick is here because of China and I think GM sold more cars in China than it did in the USA last year.  GM would have gone bankrupt again if Obama took away their Chinese business.

    Duh smk... the plan is to build cool Pontiacs for North America and for export/manufacture to China simply affix them with waterfall grilles, simulated wire wheel covers, ventiport hoods, crushed velour interiors, landau roofs and non-straked taillights for the Chinese.  I do not care one bit if China gets a rebadged "Buick" that could be sold as something more desirable here.

    Edited by ocnblu

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    • Rising Star

    riviera74

    Members
    36 minutes ago, ocnblu said:

    Duh smk... the plan is to build cool Pontiacs for North America and for export/manufacture to China simply affix them with waterfall grilles, simulated wire wheel covers, ventiport hoods, crushed velour interiors, landau roofs and non-straked taillights for the Chinese.  I do not care one bit if China gets a rebadged "Buick" that could be sold as something more desirable here.

    WOW. 1985 called: they want their old GM back.

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    • Haha 3
    Community Regular

    regfootball

    Members
    23 hours ago, Suaviloquent said:

    they sent 6 mos of Envision stock and Envisions stay about 5 1/3 mos on the lot before selling.

    Talk about over production. The car is over produced in China, and I believe now the real reason why the Envision came to U.S. market is because it didn’t sell as well as GM had hoped. 

    The Envisions competitors in China are the same as here.

    EXCITEMENT!!!!!

     

    image.png

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    • Haha 1
    Newbie

    ocnblu

    Members
    On 8/7/2018 at 7:34 PM, riviera74 said:

    WOW. 1985 called: they want their old GM back.

    Ah, subtlety is lost on our boy Riv...

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