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Thread: U.S. Denies GM Request for Tariff Relief on Buick SUV

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    U.S. Denies GM Request for Tariff Relief on Buick SUV

    Source: AutoVerdict
    June 5, 2019
    by Nick Saporito


    The Trump Administration has denied a request by General Motors to exempt the Buick Envision SUV from recent tariffs imposed on Chinese goods. The denial means GM will continue paying a 25 percent tariff tax on all Envisions imported to the U.S.*

    GM filed the request for exemption nearly a year ago, but only got an answer on May 29th. The U.S. Trade Representative's office refers to the Envision as a product that is "strategically important or related to 'Made in China 2025' or other Chinese industrial programs."

    On Tuesday GM told*Reuters*the automaker has been paying the tariff on the Envision since July. To date, GM has not increased the sticker price of the Envision to account for the 25 percent tariff. The Envision starts around $35,000.*

    Buick Envision sales have been on decline in the U.S. for the last two years. In 2018 sales dropped 30 percent, while sales are off an additional 21 percent in the first three months of 2019. GM notes it shipped in a six-month supply of Envisions just prior to the July 2018 tariff being implemented.*

    GM's argument to the U.S. Trade Representative stemmed from the fact that the company sells 200,000 Envisions a year in China, meaning two production locations for the SUV make little sense given its significantly smaller volume in the U.S.*

    Volvo Cars has also had its application for exemption be rejected with regards to its XC60 SUV, which is also imported from China.*

    Read full article at AutoVerdict

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  2. #2
    Senior Member Tone's Avatar
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    We'll, that's not sustainable. I have to imagine at this point Buick will simply stop selling the Envision in the US as they have to be losing money with a 25% tariff.

    If this continues, I imagine you'll see simplified product lines in the US as lower volume stuff won't economical to produce and low margin stuff won't be profitable. Trucks, volume CUVs and luxury/premium price vehicles seem to be all that will make sense. Maybe the lower end of the market becomes 2-year lease returns with a factory warranty?

    Seems like at this point there will be uncertainly around US trade for years before anything gets reliably settled. Not great from a business planning perspective.

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    Senior Editor nsaporito's Avatar
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    Quote Originally Posted by Tone View Post
    We'll, that's not sustainable. I have to imagine at this point Buick will simply stop selling the Envision in the US as they have to be losing money with a 25% tariff.

    If this continues, I imagine you'll see simplified product lines in the US as lower volume stuff won't economical to produce and low margin stuff won't be profitable. Trucks, volume CUVs and luxury/premium price vehicles seem to be all that will make sense. Maybe the lower end of the market becomes 2-year lease returns with a factory warranty?

    Seems like at this point there will be uncertainly around US trade for years before anything gets reliably settled. Not great from a business planning perspective.

    I agree. I can't see the Envision hanging around on the U.S. market much longer, assuming the tariff nonsense continues.

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