GM is producing popular car in China, exporting to US

By Ed Zwirn, New York Post, July 2,2017

China’s hottest auto export to the US is a Buick, and that may not sit well with the Trump administration.

General Motors produces the Buick Envision exclusively at a factory in Shanghai, mainly for the Chinese market. About 32,000 of the vehicles, which sell at a base price of $34,065, have been sold in the US since the company introduced the compact SUV to the US market last summer.

“It was a simple business decision to import the Envision into the US from China,” GM spokesman Daniel Flores said. “It was not economically feasible to produce the vehicle in a second manufacturing facility at the projected volumes.

“The Envision did not replace an existing US-made model or eliminate any jobs in the US,” he noted.

And GM, although it is the first of the Big Three automakers to produce a Chinese import, is not alone in exploiting this latest tweak to the global auto supply chain. Earlier this month, Ford announced that it would be moving production of the Ford Focus entirely from the US to China, where it already makes the cars for Chinese buyers, starting in 2019.

But while these production shifts make perfect business sense for US automakers — enabling them to lower production costs and at the same time locate production closer to a huge market — they risk incurring political blowback.

President Trump’s administration has said it would try to level the playing field with China and its treatment of US automakers. They pay 25 percent import taxes to reach Chinese consumers, while foreign carmakers pay just 2.5 percent to access the US market.

At the same time, US automakers who outsource work have become a special target of presidential ire.

“Any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its products back into the US without retribution or consequences is WRONG!,” Trump tweeted in December.

Buicks are hugely popular in China, and, according to some industry analysts, that is one of the reasons the brand has survived in the GM lineup.
The Envision was responsible for 228,257 sales last year in China, according to Flores.

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About Ed Zwirn

Ed Zwirn is a journalist/editorial professional with a focus on financial trends and practices. He lives out in the woods in Bethel, NY, not far from where the Woodstock Music and Arts Festival was held in 1969. As a financial writer, his work has appeared in The Wall Street Journal, The New York Post, CFO Magazine and news services including Dow Jones Newswires and Informa Global Markets. Ed also spent three years in Ukraine, where he ran an English-language news service. He now divides his time between his freelance journalism, song and poetry writing, and barbequing and lawn-mowing on his 2.5 acre property.