General Motors and, subsequently, Buick, have been on the offensive regarding the decision to build the 2016 Buick Envision in China, and import the midsize luxury crossover to North America.
We’ve laid out why the decision was made, and why it makes the most sense, but General Motors CEO, Mary Barra, has gone on the record with Yahoo Autos to help consumers understand the sense behind it.
The United Auto Workers have paraded around the “build where [GM] sells” quote, something Barra reiterates in the report. But, GM is doing just that. Buick expects to sell well over 200,000 Envisions in China. It’s forecast for the United States? Only 45,000 units.
“When you look at the significant number of Buicks that we sell in China, to what we sell in the U.S., this to me is about providing customers with an opportunity. The business case wouldn’t be there to tool up the vehicle in North America.”
“Our general philosophy is build where we sell, and that’s what we’re going to do, but there might be times where a vehicle is very successful somewhere else and we can leverage that capacity,” she added.
Combine this with the booming crossover market, and Buick dealers’ repeated calls for the crossover to grace U.S. lots, and it only makes sense to leverage the capacity Barra speaks of.
As for quality, she also underscored that the 2016 Buick Envision was completely engineered in Michigan alongside many other solid GM products. Quality and craftsmanship should not be a concern amid perceptions of poor quality from Chinese-built products.
As for continued backlash? Barra isn’t too concerned, even though a dicey 2016 Presidential campaign could easily draw this decision into its crosshairs.
“I don’t see it becoming a political issue, because once you know the facts it’s a very customer-focused decision.”
Comments
That should put to rest this issue. I still believe that production will shift to the U.S. when Equinox and Terrain models make it to market.
Mary’s comments reiterate that the decision was simply the best business case to bring a much needed model to the Buick lineup as efficiently as possible.
“I still believe that production will shift to the U.S. when Equinox and Terrain models make it to market.”
What evidence is there to believe that? If that was the case, Barra would say that. She has had many, many opportunities to do so, but has not.
The response has been consistent — since GM expects to sell 5 times more Equinoxes in China and the amount in the US will be less than 50k, it will be made in China for the foreseeable future.
You are right there has been no official statement saying that production will shift. It is my belief that it will based on the reversal of economies of scale when production of the Equinox/Terrain begins.
When they are already building 250-300K units of Equinox/Terrain then what is another 50-60K units?
I also believe that the Envision will also also offer FWD and a less powerful engine as a base model which will push volume north of 60K units annually. At that point importing makes less business sense.
Even if it does not shift it is difficult to build so few vehicle at a price people would pay and still make a profit.
Sorry but it is the ugly side of global production.
On the other hand it may just bring in the hatch and wagon to Buick that they can not do here
I think they will eventually build it here. But again this is going to depend on the demand on the envision. if they have a high demand, they’ll probably add a shift here in the U.S.. if not, well…. There’s that
Envision will selk far more than 45,000 yearly in North America.
Did Buick loose money off Verano and Regal tooling?
No, we would have heard about it.
I don’t believe Envision will be shifted here or Barra would have been thrilled to say that this is only temporary.
In other news, the Chinese Navy practiced sinking US subs–wouldn’t you rather have a Buick?
This “business case” is the very reason why it’s very likely that several other Buick models will ALSO be imported from China in the foreseeable future. The Encore, Regal and Verano are likely candidates. Also, the idea that the Envision will “eventually” have NA production if it “takes off”, is also a joke. Remember a few short years ago when the Encore was rolled out, the BS commentary was the same………”if it sells well enough, we will consider NA production”? Guess what, the Encore has far exceeded sales projections and yet……..there is (and never was) any thought of NA production.
I do not disagree with you on the Encore so far not moving production to NA but it always difficult to make money at small car when produced in NA. This would be different as the Envision/Equinox/Terrain will all be priced north of $25000.
I understand how this works from an accounting perspective, based on everything that Barra is saying, but I still think this decision has more risk that GM is letting on.
For example, her response about the political landscape borders on naive. When the Envision gets brought over here in summer 2016, the Dems and Repubs will likely have picked their candidates. The Dems will surely bring up their support bailout in key states like Michigan, Ohio, etc — and the Repubs will surely bring up the fact that GM decided to “repay” the bailout by having this Buick made in China.
I’m not going to argue, here, whether the bailout was or was not a good idea or whether certain attacks are “fair” or not — it’s a fact of life, though. The Envision’s assembly location is not going to float under the radar like it might have in a non-presidential election year — we’re going to hear “GM is sending their jobs to China” about a million times in the summer/fall. I have no idea how that will impact sales, but potential buyers will know the Envision is a “Chinese” car (unlike, say, the Encore where I would guess most have no idea where it built and/or don’t care perhaps b/c their neighbors don’t care).
If one takes an agnostic position on this topic, there is something Barra could ask of any critic: what do YOU drive? If the critic doesn’t answer American, she can say, “So what exactly is your point?”
I’m a big fan of the Mirage Resort in Vegas. I enjoy their dolphin zoo in the back. Aquatic rights types believe those pools are cruel and potentially lethal to dolphins which should otherwise be free to swim in the oceans.
Uh huh. But the same issue arises. Inside that hotel is any number of restaurants serving FISH. And so only vegans have the right to lodge this complaint, which from their POV is perfectly valid.
– I drive a GMC Acadia — assembled in Delta Twp, MI.
– I guess I get your point about the Mirage, but dolphins aren’t fish, they are mammals. More to the point, if someone ate dolphin in the Mirage and then complained about these pools, I could see the hypocrisy. But that’s not what is happening under your scenario.
Production may move to NA if the sales warrant it and there is capacity somewhere . She probably hasn’t mentioned it publicly yet because GM Canada is likely to use it as a bargaining chip in the 2016 contract negotiations with Unifor (CAW). The future of Equinox terrain and envision, along with ingersoll and Oshawa will be big bargaining topics. GM has kept pretty quiet about product investment in Canada IMHO because of the upcoming contract ( especially considering the large investment announcements made for US plants recently)
If Buick’s Envision is a success and that they sell over 45,000 units, you can bet that General Motors will do two things; they will spend the money to build a factory and manufacture the Envision in the United States (or possibly in Mexico) as well as build versions for GMC and Chevrolet.
Is any of the GM vehicles sold in China built in NA? or are all GM vehicles sold in CHina manufactured in CHina?
does any one have info on this?
Most of the product is built in China or they get a heavy tariff. Nice huh?
So basically selling a lot of vehicles in China doesn’t do much for the United states workers.
They can keep the lame Envision.
Barra is a tool.
The article clearly states the vehicle was designed in Michigan.
Those are the high value jobs and do benefit this country.
Not to mention profits made go in to designing and building better products right here in the good ole USA.
Everyone wants and hopes that the Buick Envision is a success that sales for the CUV hits near 10K units per month which will force General Motors’ hand into opening a new facility or retooling the Lansing Delta Township Assembly plant, in Delta Township, Michigan; but if Buick only sells 1,000-1500 Envision CUVs then it wouldn’t be worth the investment as General Motors is expecting to sell over 100,000 Buick Envision CUVs in China.
I make products that are sold to Tier 1, 2 and other automotive & aftermarket companies in America. Notice I did not say the US – as the line between Canada & the US remains friendly and fuzzy and the fence between Mexico and the US should be likewise. China buys virtually no product from me that would contribute to my employment.
While I like the appearance & size of the Envision I will go back to looking at a new Outback – as it is pieced together by people like me who live closer to me. US factories have provided good employment and income for many of us ‘average intelligence’ folks. I work hard for my money and appreciate the good compensation I receive (& I’m not pro- or anti- union – altho good management practices would make unions unnecessary). I want my neighbors to stay employed – and buying a Chinese vehicle crosses the line for me.
And will there be a Chevy equivalent eventually? Where will it come from? I had a problem buying a 2008 with its Chinese V6. Hello Subaru – of Lafayette Indiana…