BUICK ENVISION

The made-in-China Envision is now on sale in North America.

The Buick Envision has arrived, the third crossover in this tri-shield brand’s portfolio. Only you wouldn’t know that without closely examining US auto sales data for May 2016.

Tucked within that information are the 89 Envisions sold in the US last month. As promised, Buick said the Envision would go on sale in the second quarter of 2016. However, instead of the customary fanfare accompanied by TV ads and a media push, the Envision has quietly gone on sale.

Political Posturing and a New Crossover

Why the quiet debut? Buick told Automotive News the Envisions now on sale are high-trim level 2016s. In a few months, the full range of Envisions will be made available and sold as 2017s. Its an unusual approach, but it may signal an internal decision to avoid political theater.

Indeed, the Buick Envision is made in China and it might receive unwanted attention from the presumptive Republican presidential nominee, Donald Trump. Trump has harshly criticized US manufacturers for shipping jobs overseas or importing products that could just as easily be built by Americans.

Just last week Trump criticized the PGA Tour for its decision to move a tournament from the US to Mexico. The WGC-Cadillac Championship has been played at the Trump National Doral near Miami and will shift to Mexico beginning in 2017. Cadillac’s sponsorship was ending and will be replaced by Grupo Salinas, an assemblage of media companies.

NAFTA and Imports

Notably, Cadillac and Buick are GM brands and just this week Trump blasted the automaker for its investment in Mexico. GM now joins the Ford Motor Company, Carrier and Nabisco, as companies the presidential candidate has attacked.

While campaigning, Trump has suggested a 35 percent tariff on vehicles imported from Mexico. Of course, that recommendation ignores NAFTA (North American Free Trade Agreement), a trilateral agreement the US made with Canada and Mexico to do away with numerous tariffs.

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2016/2017 Buick Envision

Political posturing aside, the Chinese-made Buick Envision fills an important hole in the Buick product line. Prior to its arrival, Buick offered the subcompact Encore and midsize Enclave crossovers. The Envision provides a natural step in the product line for Buick customers.

Visit the Buick.com website today and you’ll find no information about the Envision on its home page. Click the “All Vehicles” tab and a model list is shown. Cast your eyes on the “SUVs” category and you’ll spot the 2016 Envision tucked neatly between the 2016 Encore and the 2016 Enclave.

You’ll also spot a sky-high price for the Envision, starting at $42,070 or $3,005 higher than the Enclave. Click the “explore” tab, then “view specs” and you’ll find two trim levels featured. Both are fully-loaded all-wheel drive versions, the only models marketed in the 2016 model year.

Head back to the “all vehicles” tab and you’ll spot the 2017 Envision and a note explaining its fall 2016 availability. Click “explore” and a list of five trim levels will appear. The base price for the standard Envision is $34,990 with Preferred ($36,795), Essence ($38,645), Premium ($43,245), and Premium II ($45,885) models offered.

Front-wheel drive and a 2.5-liter, four-cylinder engine are standard. All-wheel drive or active twin-clutch all-wheel drive are available. A turbocharged 2.0-liter, four-cylinder engine is offered with the two top trims only.

The Buick Product Line

Buick’s model line is expanding and they’re using cars built in Michigan, Ontario, Kanas, and China to draw customers to the tri-shield brand. It is doubtful whether most customers care where their cars are built.

And as for American jobs, dealer and service level positions are keeping people employed and tax coffers are replenished no matter where the new car was manufactured.

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New Cruze, No New Verano

The front-wheel drive Buick Verano is underpinned by the same platform powering the Chevrolet Cruze, itself updated this year. The Verano’s main competitors are the Acura ILX and Lexus IS 250, and nearly 32,000 American consumers bought the small Buick last year.

Nevertheless, Buick sees its future following the consumer shift to SUVs, and is bringing the compact Envision SUV from China to augment the subcompact Encore and the midsize, three-row Enclave SUVs. Further, because most Buick and GMC dealers are sold under one roof, customers also have easy access to two lines of pickup trucks as well as four lines of GMC SUVs.

With customers no longer having access to the Verano, Buick dealers will have their work cut out for them when leases renew and owners trade in. Entry-level Buick shoppers may be redirected to the tiny Encore or the midsize Envision, the latter expected to generate 50,000 sales per year. Come 2018, the smallest sedan will be the Regal. The Buick Cascada is similarly sized, but it is a niche 2+2 convertible.

Wholesale Shift to Trucks & SUVs

GM’s decision to walk away from the Verano follows April’s sales figures release. Last month, Verano sales fell by 18.8 percent and are down by 11.7 percent through the first four months of this year. Sales of its large LaCrosse sedan are down by 21.7 percent, but Regal volume is up by 13.5 percent.

Buick’s strength remains in SUVs as the Encore is by far its best selling model, followed by the Enclave. Looking forward, Buick expects SUVs to generate 70 percent of its volume, enabling the brand to meet customer demand, but not without some risk.

That risk is based largely on fuel prices, what plays a significant role in consumer purchase decisions. When fuel prices are high, new car buyers avoid large SUVs and consider smaller models, including compact cars.

Sales Mix Among American Manufacturers

Indeed, among the traditional American manufacturers — GM, Ford and Fiat Chrysler (FCA)— car sales fell by 11 percent in 2015, while demand for pickup trucks and SUVs surged by 15 percent according to the International Business Times.

In 2015, FCA truck/SUV sales surged by 22 percent, while car sales plunged by 19 percent. GM, including Buick, realized a 16 percent increase in truck/SUV sales to a 14 percent drop in car sales. Ford has the narrowest change of all as truck/SUV sales rose by 8.3 percent, while car sales fell narrowly by 0.9 percent.

The Fuel Price Factor

In recent months, fuel prices have slowly, but steadily risen. That ascent may be seasonal as gas prices routinely rise as the summer driving season begins. The US Energy Information Administration has forecast an average price of $2.04 per gallon for the summer driving season (April-through-September) compared with $2.63 per gallon last year.

Both numbers are far lower than the $4.11 per gallon peak reached in July 2008. By January 2009 fuel prices averaged $1.84 per gallon, rising and falling since.

A big advantage for Buick lies in its ability to shift products quickly, if needed. Given that the second-generation Verano is sold in China, readying that model for the US market shouldn’t take long if consumer trends shift. That means we may not have seen the last of Buick’s smallest model as well as perhaps an all-new flagship sedan based on the Avenir concept.