In June, we reported on the possibility of GM discontinuing the Buick Envision in the U.S. market as a result of an incoming 25 percent tariff targeting products made in China and imported in the U.S. The General is putting up a fight, and has asked the U.S. government that the vehicle be excluded from any import duties. But GM isn’t the only automaker looking for this kind of exemption, as Volvo has also made a similar plea with the U.S. government to exempt the China-built Volvo XC60 crossover from the import tariffs.
Volvo originally built the second-generation XC60 in Sweden and exported it to the U.S. But recently, it started supplying the U.S. market with models assembled China. Notably, Volvo’s parent company – Geely – is Chinese.
Volvo said it could eventually build the XC60 in its new plant in Charleston, South Carolina alongside two other models the S60 Sedan and the XC90 crossover. However, the automaker said that to do so would take time, and that until that happens, it will likely pass along the additional cost of any tariffs to consumers.
Unlike GM, which doesn’t appear to have a backup plan to build the Envision in the U.S., Volvo seems to have a plan that involves building the XC60 Stateside. Even so, the stakes for Volvo are significantly higher than they are for the Buick.
First and foremost, The XC60 is vital to Volvo’s strategy to grow sales and revenue in the U.S. market, as the vehicle is a very competitive model in a market hungry for crossovers. XC60 sales totaled 19,854 units in the first eight months of 2018, which represents 30 percent of Volvo’s U.S. sales volume.
By comparison, U.S. Buick Envision sales totaled 41,040 units in 2017 and just over 16,000 units in the first six months of 2018, representing 18 percent and 14 percent of overall Buick sales, respectively, during the same time periods.
If the Trump administration’s tariffs come to pass and GM chooses to continue importing the Envision into the U.S. from China while also passing the full amount of the increased cost to consumers, the compact crossover will see its prices increase by as much as $8,000, bumping the $32,000 base price of the 2019 Buick Envision to just over $40,000.
Luckily, Buick has imported a six-month supply of Envisions into the U.S., which should last dealers until the end of the year. So at least it has that going for it.