Rumorpile: General Motors Moves Forward With Buick Envision Import Plans

I'm not happy when GM imports models in general (with rare exception: Chevy SS), I'm borderline-offended that they would import from China.

We're exporting Enclaves from the US to China and have been for a few years now... so it's an even swap.

And it makes sense... Buick will sell more Envisions in China than in the US and they sell more Enclaves in the US than they do in China.  Build 'em where you're going to sell the most of them.

If the build quality is there then I guess you have to do it. But it is a bit troubling to see the last bit of manufacturing that North America has a decent grip on begin to slip away.

If the build quality is there then I guess you have to do it. But it is a bit troubling to see the last bit of manufacturing that North America has a decent grip on begin to slip away.

yes, that would be troubling if that were the case, but it's not.

Since the BK, and even before the latest round of UAW agreements, all three of the big three have re-expanded production in the US.  The UAW agreements recently reached ensure that trend will continue.  GM is doubling the size of Arlington and they made huge investments in their Michigan facilities. 

Hyundai/Kia have been expanding their manufacturing in the US. 

Subaru is increasing the capacity of the Indiana plant by something like 30% (don't quote me, but it's a good chunk) to build the Impreza and the new 3-row crossover.

Mercedes just contracted with AM General to use the former Humvee plant to build R-Classes to sell in China.  The R-Class isn't even sold in the U.S.

The Volvo built in China will be a one-and-done.  When the new platform arrives, production will swing to the new plant they are building in South Carolina where most US sold Volvos will thenceforth be built.

American Auto Manufacturing is very much alive and growing again.

Back when energy prices soared at the end of the last administration, all manufacturers got caught with their pants down... but auto manufacturers especially.  Seemingly overnight, their shipping costs jumped 100% or more.  After that, there formed an understood but unspoken policy of "If you have the capacity, build it on the continent where you're going to sell the most of them... if you don't have the capacity, build the capacity."

And like the Volvo, if this Envision takes off in the US, I can see GM moving production to North America for North American bound units.

Oh.

Must be a Canada thing then

Maybe that's why Oshawa is getting the Delta Platform Equinox?

Pretty sure it's Ingersoll, but I'd be thrilled to be wrong on that.

A Chinese built car will be a hard sell.

I do think this opens up the slippery slope of build more and more in China where labor is cheap, and send those manufacturing jobs over seas.  Most car companies build vehicles where they get sold (with the exception of low volume), but if GM can get super cheap labor in China, they don't need the UAW factories anymore.  

Yeah I'm kind of a dumba$$ where it comes to Canadian GM facilities. Must be that Markham plant subliminal messaging trying to subvert any knowledge of GM and Ford.

Well, the Encore and Traxx are built in South Korea, and they sell surprisingly well.

GM still builds its compacts here. But yeah, I'd say it's fair to say that for the most part, more vehicles from America are exported to China than the other way around.

I do know that the previous gen Honda Fit was made in China for Canadian consumption. It was an utterly well built tin can that destroyed people's ear drums while they were driving it.

Also, Mexico is the new automotive assembly jurisdiction of choice. Can't avoid that NAFTA. *Grumble (but uor jerbs!!!)*

A Chinese built car will be a hard sell.

 

I do think this opens up the slippery slope of build more and more in China where labor is cheap, and send those manufacturing jobs over seas.  Most car companies build vehicles where they get sold (with the exception of low volume), but if GM can get super cheap labor in China, they don't need the UAW factories anymore.  

Chinese labor isn't as cheap anymore and there is the huge uncertainty of energy costs involved in shipping cars.

If I had to guess.... Buick needed this car in the US three years ago, but with all of the other stuff coming, there isn't a place to build it, so they're just going to build it in China until they can find a place.

This is the deal. The Buick will be here before the Nox. That being the case there is no plant yet set up to build this model.

I read Buick the first year expects only 30-40K to be imported. This sounds to be the same deal as the Regal when the first year was imported from Germany and them moved to Canada.

Quality is not an issue as these products are made to a standard and it matters little where the plant is.

The bottom line is if they plan to expand production over the small number they have stated they will need to move it here and by then the Nox and Terrain line should be up and the Buick could easily joint them.

Also this sends a signal to the UAW that they have options so negotiate in good faith

Trust me on this: build quality varies quite a bit from country of origin to country of origin. Even within a single company.

A Chinese built car will be a hard sell.

 

I do think this opens up the slippery slope of build more and more in China where labor is cheap, and send those manufacturing jobs over seas.  Most car companies build vehicles where they get sold (with the exception of low volume), but if GM can get super cheap labor in China, they don't need the UAW factories anymore.

Labor and shipping is not as cheap as you thing. Now in a case of lower volumes as this will be in the first year it is cheaper but expand volume it will be moving here.

As for hard to sell the majority of the public have no idea they no longer put a spare in most cars let alone where it is made. Hell they can't even name who is Vice President.

The UAW will squawk a little but it will die down.

Have you seen an out cry for the Tesla 3 moving to China for production. Has anyone really noticed the Jeep Renegade is from Italy? Not really. It is a different market today.

GM would build everything here but then people won't buy if the price is too high too.

Everyone wants to make a million dollars but they all want to shop at Walmart. Think about it. The Viscous Cycle.

The last part of your post pretty much echoes what I was saying during the Takata mess: Wal-Mart nation gets what Wal-Mart nation deserves.

This is the deal. The Buick will be here before the Nox. That being the case there is no plant yet set up to build this model.

 

Thanks Hyper, that was the gist of what I was getting at but with more detail.

The last part of your post pretty much echoes what I was saying during the Takata mess: Wal-Mart nation gets what Wal-Mart nation deserves.

It is not so much that. Everyone thinks if we stop buying Walmart they will be enriched. That is still a dead end just as if we continue to pay lower prices.

The key to getting ahead is to improve your life and not rely on just the cost of items or hand out from governments.

The path of improvement is shown by many who come to this country with nothing and have nothing given to them. To do this you must educate yourself or attain a solid needed skill few have and work hard.

The problem today many in this country grew up with everything and have had many things handed to them. Then they get out of school and expect to have it all handed to them and live like their parents who worked 50 years to get what they had.

Lets face it so many younger people today want the fancy car and the big house at 24 years and still not show up everyday at work because the new Call of Duty game just came out. I see it often at very good paying jobs.

I worked near a Cambodian community years ago. They were in a bad neighborhood and most came here with nothing after the war in the 70's. They took nothing from the government but were a tight family based community that worked hard. They got their kids educated and started business. That group today is one of the most successful groups of people for miles around. They should be used as an example of what can be done. Yet we have so many people going around wanting things given to them just look at the latest round of mess at the universities.

The bottom line here is the path of prosperity is not from stop shopping at Walmart, the government giving you free collage or the union that demands more and more wages for the same amount of output. That is just all parts of the viscous circle that continues to repeat and repeat.

If people want to advance they must break out. While I did do all the Cambodians did here I did work my way through collage and I worked some crappy jobs to get where I am at today. I may not live in Malibu but I do have it well and earned what I have as no man gave it to me.

While the depression did a lot of damage it taught a lot of people how to survive and thrive on their own. We have lost that today. I can not get people to show up to work daily and they lose their job. I had one woman who got drunk and ran over of all things a cop. It is just getting hard to find people with what it takes anymore.

Sorry for the rant but when I see the full on attacks on Walmart I am not defending them but just pointing out they are just a symptom of what greater is wrong here. Too few know about it and even many who do they don't want to hear that it is on them not Walmart or the government to enrich their own lives.

Sorry for the off topic but I was painting some rooms tonight and listening to the TV and Paris and I really worry about my family and my teen. What will he contribute and what kind of a world will he face. I will prepare him but it is up to him if he makes it or not. I had some expectations too but I learned I had to do it myself and did. I hope he does too.

This is the deal. The Buick will be here before the Nox. That being the case there is no plant yet set up to build this model.

 

Thanks Hyper, that was the gist of what I was getting at but with more detail.

Sorry back on topic.

No problem. I have been reading post all over the web on this and too few can see the big picture. Too many micro analyze things like this and do not get the whole thing of timing, volume and that one product often is tied to another product.

GM could hold up a year or two an just build this in Canada but then they get trashed for taking too long and some saying why did China get it and not us.

Eve a few here have no idea of the big picture as either they do not consider it or just don't know how things work internally.

I got what you said and was happy to see it. I just thought some needed the rest filled it to get it.

I'll be more open to the situation if the goal is to move production stateside.

i worry the styling isn't good enough.  the interior looks ok, but the exterior is lacking, in a way like the Captiva is awkward compared to the Equinox.  and i don't like so much what i've seen from the new Verano, LaCrosse and Regal teasers and spy shots.  The Avenir looks American. But that's just a concept.

Eh, It'll do fine. It looks like a Buick. By that I mean it looks really like nothing else. If anything, being original atleast means that Buick is solidifying its identity.

Has anyone seen the teasers for the new Lacrosse to be shown on the 18th?

It's the first time I've ever been excited for a Buick. That's a lot to say about folks of my generation.

I am with reg on his opinion of the Envision.  There is something about it that is all "parallel universe" in its design.  It is off-putting.  I also agree with those that say a vehicle like this should have been here a while ago from Buick... at the very least for Rendezvous customers who love their vehicle, but need to replace it.  I just hope that any future dedicated N.A. version gains a more traditional Buick design aesthetic.  This is GM being caught flat-footed in their home market.

#1 Who says it looks like this. Chevy has made major changes for their cars sold in Asia vs. here. What you see here may not be what you totally get. Lets just see what we get before we throw in the towel.

#2 This one is not bad looking in the photo's and if you look around at the others GM could do much worse.

#3 GM was not caught flat footed like Chrysler has been. They did store up many models before the chapter 11 to buy them some time after the dust had settled. While some of the models ages till they got them out they at least did have something and are not trying to sell mild refreshed old models as new. GM has a lot on their plate and there are few companies that could have done as much product and new platforms as fast they have. Sometimes you just have to make do with what you have and they have done well. Buick in the US market is not as important as it is in China and as Opel will be in Europe and Australia.

#4 My real interest is how they will add new SUV models at Buick dealers and not damage sales of the GMC line or even not compete with them. Lets face it 90% of the Buick dealers have GMC in the same showroom. How do you make a similar product Work at the same dealer. The two larger SUV models have not competed as the Enclave is a clear step up. But with this model the Denali Terrain and the XT5 are in similar price range of this vehicle. That should be more of a concern. How to keep them from hurting each other. I expect GM has a plan but I am curious.

One assumes the interior of the Envision will be a big step up from the Terrain..... But I'm not a fan of the Terrain/Nox interior, so that shouldn't be much of a hurdle for them.

One assumes the interior of the Envision will be a big step up from the Terrain..... But I'm not a fan of the Terrain/Nox interior, so that shouldn't be much of a hurdle for them.

I expect the Nox and Terrain to be a step up from what they are now. Being oldest in the segment they are showing what was prime years ago.

What some have said in reference to WHY GM is doing is I believe spot on. In truth... if we are going to have this stance of "I'm not ever buying a GM vehicle again because they are importing ONE vehicle from China.. I have to call BULL$h! and ask U how does one remotely stomach the purchase of a BMW, VW, Benz, Toyota, Nissan, Hyundai, Honda, or etc? The country of origin for all of those companies have literally at one time or another go on historical records as KILLING AMERICANS. 

As a result of Germany and Japan going NUTS. and trying to take over the world in WWII American lost 419,400.

As a result of Germany just being dicks.. in WWI we lost 116,516

Fighting the Koreans.. 36,516

Yet we have no ill will towards them. Buy their vehicles and products in droves. 

I'm not defending GM in this.. but I do think that they are doing exactly what is proper for the sake of business. In truth.. it is the American people who set the stage for this years ago. Buying from Japan, Germany, Korea.. and even more from China.. just a different type of product

And Just like that Bob Lutz is saying the same thing;

http://video.cnbc.com/gallery/?video=3000453628

In truth Buick may become the first real global brand from GM. It will be Designed, engineered, built and sold globally and in the end may be one of the most profitable cars GM sells.

The I will not buy GM again people are often people who have not bought a car recently or were going to by this model anyways.

Just looking around FCA is going major off shore with their products and Ford as of next year I believe will only build the Mustang and Conti here. All other car models will be built overseas or in Mexico and Canada. Only trucks and SUVs. Yet few know or care.

moving to the future with cars becoming too expensive for many affordability will be key and controlling cost. With many gains here there will be losses in other areas. Consolidation of products to one plant will be seen more often and shipped globally, Some will be here some will be else where.

This is a new global world and if you want it all here you will have to pay for it if not it will go to where ever it is cheaper to build.

Buick is GM's second biggest selling brand globally.  It beats out Opel/Vauxhall, Holden, Cadillac,  and GMC... some of them combined.

It already is a global brand. 

Buick is GM's second biggest selling brand globally.  It beats out Opel/Vauxhall, Holden, Cadillac,  and GMC... some of them combined.

 

It already is a global brand.

To a limited degree but not to the degree it will be.

The white noise is coming globally or so I am hearing.

I am surprised that story is not here yet as it could spark some real debate on some real new models and the same old GNX, GN tired wishes.

Buick is GM's second biggest selling brand globally.  It beats out Opel/Vauxhall, Holden, Cadillac,  and GMC... some of them combined.

 

It already is a global brand.

To a limited degree but not to the degree it will be.

The white noise is coming globally or so I am hearing.

I am surprised that story is not here yet as it could spark some real debate on some real new models and the same old GNX, GN tired wishes.

Sorry I misspoke I meant to say White Space. Here is what I was referring to. I find it quite exciting as this could lead to some really interesting models Buick and GM would have never approved for a business case. Now think outside the box and not the same old GN GNX kind of thinking. Think interesting models that Opel, Holden and Buick could do in limited numbers that would appeal in all their markets sold at lower volume or even just models outside the norm for them. Things like a OPC hatch that could compete with the GTI. A Regal that could compete with the CC, a sports car that could compete with a Audi TT.

Think global and significant in image.

Could the coming Monza based Opel be a white space car?

Here is the story.

One could say Buick’s current strategy has been quite the gamble. Products like the Buick Encore and Buick Cascada have been born from an idea of “white space“, the idea of filling niches as seen fit by parent company General Motors.

We recently had the chance to ask Duncan Aldred, Buick Vice President of Sales and Marketing, a few questions about Buick’s current attitude towards the market and its image. Frankly, it’s an intriguing strategy.

Aldred quickly gave us a history lesson, noting how the strategy has been extremely successful with intelligent marketing research to see what truly fits into a new, redefined Buick lineup. Products filling Buick’s white space include the incredibly successful Encore, Verano and the upcoming 2016 Buick Cascada.

But, Aldred was kind enough to let it slip there is more coming in terms of white space to the Buick brand. He discussed whatever product is on the horizon will follow the 2017 Buick LaCrosse. Aldred spoke highly of the 2017 LaCrosse, calling it “very much so a flagship sedan.” But, he also noted it’s not white space. Instead, it’s meant to be a volume play, and a well executed one at that.

We didn’t receive any specifics on this upcoming product but, if we had to take an educated guess, we feel the 2016 Opel Astra would fit right in to the Buick lineup as a Buick Verano hatchback.

Read more: http://gmauthority.com/blog/2015/11/we-hear-more-white-space-coming-soon-from-buick/#ixzz3rwEZcmcZ

^^^ I agree with his assessment of white space fillers of niche auto's that can be global in sales and profit at lower quantity.

its a no-brainer. If the vehicles are engineered they should be engineered from the get go to be global. If I can buy an Astra hatch in UK.. in Germany.. in Latin America... I should be able to buy it in the US

Well it is a no brainer but they still will need to match volume product to specific markets. Some model would play globally even in limited numbers but others would not pay much at all.

Case in point. while we got the Regal GS at $42,000 the US market may not have accepted the Opel OPC version too well at the price they were charging for it in Europe. It was right at $60K with the TT V6. But with that said there are still many limited models that could really help Buick here as well Opel and Holden in smaller numbers to really set these divisions apart.

Also you still have safety and emissions issues to all markets. This is part of why GM drivetrain is pushing hard for global emissions regulations. In light of the VW deal people may actually listen. The only hang up will be the radical green people who just do not want to work with much of anyone.

Burn the radical Greenies and pass a Global Emission and crash standard so you build an auto that can sell everywhere.

The Envision is already on GM Powertrain's 2016 NA product list. It gets the same 2.0 L Turbo as the Regal and new Malibu. The Chinese version is rated at 256 hp, but GM powertrain is predicting 252 hp in SAE testing with lower octane US fuel. Both fwd and awd versions get the 6T50 shared with the old Verano (there's a bigger new one coming on the American Cruze platform), but the Chinese Envision has Start Stop integrated (the 2.0 L is awd only in China). Chinese models also get the new 1.5 Turbo shared with the new Malibu paired with a Shanghai-GM 7-speed DCT in both fwd and awd. It's not as small as the Escape, Rav4 and CRV — about 4 inches longer than the biggest of those three — so not in the sweet spot for compact crossovers. It's more lower-midsize like the old Rogue, CX-7 and Mitsubishi Outlander. It's even a bit bigger than the Cherokee, but it is smaller than the Terrain.

The Envision is already on GM Powertrain's 2016 NA product list. It gets the same 2.0 L Turbo as the Regal and new Malibu. The Chinese version is rated at 256 hp, but GM powertrain is predicting 252 hp in SAE testing with lower octane US fuel. Both fwd and awd versions get the 6T50 shared with the old Verano (there's a bigger new one coming on the American Cruze platform), but the Chinese Envision has Start Stop integrated (the 2.0 L is awd only in China). Chinese models also get the new 1.5 Turbo shared with the new Malibu paired with a Shanghai-GM 7-speed DCT in both fwd and awd. It's not as small as the Escape, Rav4 and CRV — about 4 inches longer than the biggest of those three — so not in the sweet spot for compact crossovers. It's more lower-midsize like the old Rogue, CX-7 and Mitsubishi Outlander. It's even a bit bigger than the Cherokee, but it is smaller than the Terrain.

Thanks for those updates. 

The Buick is closer to the size of the Coming Nox where it will be smaller outside but about the same inside with better packaging.

I am not sure about the Terrain. I suspect it may go to a larger platform like the Cadillac. Just call it a hunch? I think this is how they will offer the GMC and Buick at the same dealer and not overlap. I have heard things but could never confirm them.

Maybe the Terrain could use the short wheelbase Chi platform like the XT5. It's bit a bigger than the Delta used for crossovers, so it might fit GMC product differentiation targets from Chevy and Buick more.

I'd like that even, because GMC then gets an Edge and Murano competitor, but more importantly it'll be sitting in an a more upmarket dealership. And two row midsize crossovers are all about the marginal increase in size over compact crossovers for a more than commensurate increase in price.

And since there's little chance of a GMC competing against a Cadillac in the same showroom, I'd say it's totally worthwhile to consider this.

 

The last part of your post pretty much echoes what I was saying during the Takata mess: Wal-Mart nation gets what Wal-Mart nation deserves.

It is not so much that. Everyone thinks if we stop buying Walmart they will be enriched. That is still a dead end just as if we continue to pay lower prices.

The key to getting ahead is to improve your life and not rely on just the cost of items or hand out from governments.

The path of improvement is shown by many who come to this country with nothing and have nothing given to them. To do this you must educate yourself or attain a solid needed skill few have and work hard.

The problem today many in this country grew up with everything and have had many things handed to them. Then they get out of school and expect to have it all handed to them and live like their parents who worked 50 years to get what they had.

Lets face it so many younger people today want the fancy car and the big house at 24 years and still not show up everyday at work because the new Call of Duty game just came out. I see it often at very good paying jobs.

I worked near a Cambodian community years ago. They were in a bad neighborhood and most came here with nothing after the war in the 70's. They took nothing from the government but were a tight family based community that worked hard. They got their kids educated and started business. That group today is one of the most successful groups of people for miles around. They should be used as an example of what can be done. Yet we have so many people going around wanting things given to them just look at the latest round of mess at the universities.

The bottom line here is the path of prosperity is not from stop shopping at Walmart, the government giving you free collage or the union that demands more and more wages for the same amount of output. That is just all parts of the viscous circle that continues to repeat and repeat.

If people want to advance they must break out. While I did do all the Cambodians did here I did work my way through collage and I worked some crappy jobs to get where I am at today. I may not live in Malibu but I do have it well and earned what I have as no man gave it to me.

While the depression did a lot of damage it taught a lot of people how to survive and thrive on their own. We have lost that today. I can not get people to show up to work daily and they lose their job. I had one woman who got drunk and ran over of all things a cop. It is just getting hard to find people with what it takes anymore.

Sorry for the rant but when I see the full on attacks on Walmart I am not defending them but just pointing out they are just a symptom of what greater is wrong here. Too few know about it and even many who do they don't want to hear that it is on them not Walmart or the government to enrich their own lives.

Sorry for the off topic but I was painting some rooms tonight and listening to the TV and Paris and I really worry about my family and my teen. What will he contribute and what kind of a world will he face. I will prepare him but it is up to him if he makes it or not. I had some expectations too but I learned I had to do it myself and did. I hope he does too.

 

You're fine...agree with a bunch of that with my son...

Believe it or not, I'm more worried about production in mexico than china....

At today's exchange rate the export version of the Buick Envision (2.0T Sport AWD) retails in China for $53,400. A base 1.5 T fwd is $33,560.

I saw one of these on Monday.

The size was smaller over all but the usable interior was not much different than my Terrain.

It is spot on in size for the segment it is in.

I just do not understand how pricing will work with the GMC right there in the same show room. I am sure the GMC will see a price cut like the Acadia but then again that also may be why GM only plans to sell 40K units.

 

And since there's little chance of a GMC competing against a Cadillac in the same showroom, I'd say it's totally worthwhile to consider this.

The local Cadillac/Buick/GMC dealer recently built a separate showroom across the street for Buick and GMC to separate them from the Cadillac showroom (for the last 5 or so years, they were sharing the same large showroom space, after the Cadillac dealer bought the Pontiac/GMC/Buick dealer). 

At today's exchange rate the export version of the Buick Envision (2.0T Sport AWD) retails in China for $53,400. A base 1.5 T fwd is $33,560.

After President Trump adds his tariff on Chinese made goods, the Envision will have the same price as an Escalade.  

 

At today's exchange rate the export version of the Buick Envision (2.0T Sport AWD) retails in China for $53,400. A base 1.5 T fwd is $33,560.

After President Trump adds his tariff on Chinese made goods, the Envision will have the same price as an Escalade.  

 

You can't do a direct Forex cost on cars sold in China.  The Enclave sells for $77k base, Verano is $20k base, and Encore is $20.8k base.   They're all over the map.  The initial shipments of Envisions will be only premium AWD models and base in the very high $30s to low $40s. 

 

 

At today's exchange rate the export version of the Buick Envision (2.0T Sport AWD) retails in China for $53,400. A base 1.5 T fwd is $33,560.

After President Trump adds his tariff on Chinese made goods, the Envision will have the same price as an Escalade.  

 

 

You can't do a direct Forex cost on cars sold in China.  The Enclave sells for $77k base, Verano is $20k base, and Encore is $20.8k base.   They're all over the map.  The initial shipments of Envisions will be only premium AWD models and base in the very high $30s to low $40s. 

 

Not if you're trying to assess cost of production, or (given that there are probably high tariffs on the Enclave — which has an MSRP of over $99,000 for the awd version) gross margins. But that's not my point. All I'm saying is you pay a lot for an Envision in China.

When it comes down to it, GM has a choice between selling an Envision for $53,400 in China, where the market for crossovers is finally taking off in a big way, or spending thousands per vehicle on shipping and selling them for $15-20K less in the US. Bear in mind also that GM's venture partner gets a 50% cut of every dollar of distributed profit from the export price of the Chinese-built Envisions. GM is never going to put much effort into selling Chinese-built Buicks, in the US. It's a nice supplement, both to the US lineup and the capacity utilization in China, but unless (like Honda) you build a wholly-owned plant just for exports, you're not going to import a popular model from China long-term (given exchange rate risks, shipping losses, supply problems etc. there's a reason only Honda has bothered even with that). If you have to add capacity to supply demand, you add it in the market that demand is in. As soon as GM tools up to build a Chevy or GMC in the US on the same platform, they'll make sure they include extra capacity for the Envision.

GM said that exports do not fall under the operating profit sharing rules of the joint ventures.

Take it as you will.

 

 

 

At today's exchange rate the export version of the Buick Envision (2.0T Sport AWD) retails in China for $53,400. A base 1.5 T fwd is $33,560.

After President Trump adds his tariff on Chinese made goods, the Envision will have the same price as an Escalade.  

 

 

You can't do a direct Forex cost on cars sold in China.  The Enclave sells for $77k base, Verano is $20k base, and Encore is $20.8k base.   They're all over the map.  The initial shipments of Envisions will be only premium AWD models and base in the very high $30s to low $40s. 

 

Not if you're trying to assess cost of production, or (given that there are probably high tariffs on the Enclave — which has an MSRP of over $99,000 for the awd version) gross margins. But that's not my point. All I'm saying is you pay a lot for an Envision in China.

 

When it comes down to it, GM has a choice between selling an Envision for $53,400 in China, where the market for crossovers is finally taking off in a big way, or spending thousands per vehicle on shipping and selling them for $15-20K less in the US. Bear in mind also that GM's venture partner gets a 50% cut of every dollar of distributed profit from the export price of the Chinese-built Envisions. GM is never going to put much effort into selling Chinese-built Buicks, in the US. It's a nice supplement, both to the US lineup and the capacity utilization in China, but unless (like Honda) you build a wholly-owned plant just for exports, you're not going to import a popular model from China long-term (given exchange rate risks, shipping losses, supply problems etc. there's a reason only Honda has bothered even with that). If you have to add capacity to supply demand, you add it in the market that demand is in. As soon as GM tools up to build a Chevy or GMC in the US on the same platform, they'll make sure they include extra capacity for the Envision.

 

Assuming the Envision takes off, production will move likely to the US with the next generation model.  The problem for Buick is that they needed this vehicle 5 years ago, so getting it from China is a stop gap.

I think the Buick Envision will do really well.

It might actually take a few people out of an Encore, but that's what they want anyways. Moving up into the range when the time comes to return the dealer is exactly what the entry level luxury cars are supposed to do.

They are the bait, get people hooked on them, then reel in the catch 12/24/48 mos later.

We already have Drew sold on the Buick Envision afterall...

Yes if the sales are good here the sales in China are doing so well they really can not spare more to export here.

Until the new Nox and Terrain arrive there is no place to build these yet.

GM said that exports do not fall under the operating profit sharing rules of the joint ventures.

 

Take it as you will.

That would only apply to the profits GM makes selling in export markets. GM must still pay the JV a fair contractual price for the export vehicles it produces, from which they can be expected to make a profit. Most of the profit will go back into the JV in future capital investment, but the rest will be split between SAIC and GM. Build a vehicle at a GM plant in Europe, America, Thailand etc., and GM keeps all the profit (GM Korea may still have some minority institutional shareholders from when it was still GM Daewoo). That's one reason GM makes more money in the US than China. Likewise Shanghai GM makes money selling imported vehicles such as the Enclave, which is then shared by SAIC and GM in the agreed disbursement of dividends, but GM makes additional profits in selling those vehicles to Shanghai GM.

So it's a special order type deal.

CM is lower, but you use up idle capacity based on projected home market (China) growth in sales that leaves some capacity leftover for exports.

Yeah... when the fixed costs become relevant again, then GM should not be importing from China, they would indeed have more profit by selling the units back in China.