Being one of the automobile manufacturers that is directly under fire due to the ongoing U.S.-China trade war, General Motors has requested the Trump administration to exempt its subsidiary company Buick’s Envision crossover from import tariffs.
GM sold 210,000 Buick Envisions in China as against 42,000 in its home market. The low sales volume does not justify setting up a manufacturing facility in the U.S., but GM still needs to sell the small crossover to have a complete product portfolio. Rivals like Audi, BMW, Lexus, etc have a comprehensive product lineup and GM needs to fill every product gap it has with a car. The Buick Envision is a key player for the company in the small crossover segment, which is why GM is urging the government to ease off the heavy tariffs levied on all imported vehicles.
Carmakers around the world are filing similar requests so as not to face the brunt of the U.S.-China trade war. GM also warned that it might have to scale down U.S. operations and cut jobs if the import tariff is not lifted. “While the volume of Envisions sold in the U.S. is small, it is strategically important and essential to the Buick brand,” GM said in its request. “A 25 percent tariff on the Envision may eliminate the vehicles from Buick’s U.S. offerings.”
Sales of the Envision in both domestic and overseas markets ultimately lead to profit for the American automaker, allowing it to invest in U.S. manufacturing and development of new technology for its future products. In its own words, “Sales of the Envision in China and U.S. both lead to significant repatriation of funds.”