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DETROIT (Reuters) – General Motors’ Buick brand experienced a significant surge in sales, reporting a 39% increase in the first quarter, thanks to a revitalized lineup of compact SUVs such as the Envision, Encore GX, and the Envista, which is one of their most competitive models priced under $30,000.
However, the situation took a turn with the introduction of President Trump’s tariffs.
Buick’s three leading models are manufactured outside the United States. Both the Envista and Encore GX are produced in South Korea, while the Envision is assembled in China.
This international production means that all three models are now subject to hefty tariffs that could significantly inflate their prices at dealerships in the U.S.
The tariffs imposed include a 27.5% fee on vehicles from South Korea and a staggering 47.5% for the Envision from China, which is further burdened by a 25% auto tariff, a 20% tariff related to fentanyl imports from China, and an existing 2.5% auto tax, as outlined by a Barclays analysis.
This development is concerning for Buick dealers who had been optimistic about the brand’s recent vehicle introductions, which have worked to shed its outdated image.
Analysts suggest that the upcoming higher prices could hinder Buick’s growth and potentially jeopardize its presence in the market. “The latest wave of Buick vehicles is affordable, of good quality, and well-received, but introducing cost disadvantages could threaten the brand’s viability in the U.S.,” remarked Sam Fiorani, vice president at AutoForecast Solutions.
Buick did not provide a comment for this report.
RE-EVALUATING PORTFOLIOS
The tariffs enacted by the current administration are prompting auto executives to reassess their business strategies, particularly regarding the worth of importing certain foreign-made vehicles. The recent tariff impositions have already led some manufacturers to make strategic adjustments.
GM has begun to boost truck production at a facility in Indiana, while Stellantis, the parent company of Ram and Jeep, has put a stop to output at two assembly plants located in Mexico and Canada.
A note from Barclays on April 15 indicated a trend where automakers may stop selling models that cannot be profitably marketed due to these tariffs, particularly those imported from China and South Korea.
Barclays anticipates GM will likely halt imports of around 450,000 vehicles from these regions due to the tariffs’ financial implications.
The firm has also reduced its 2025 earnings forecast for GM by 40% as it factors in diminished sales volume and an estimated gross tariff impact of about $9.5 billion. For Ford Motor, a staggering 60% cut is expected alongside a gross tariff impact of around $7 billion, as they primarily import the Lincoln Nautilus from China.
Models like the Envista and Chevrolet Trax, both produced in South Korea, are expected to be heavily affected by the tariffs due to their common production locations outside the U.S.
The pressure on affordable vehicle pricing is an industry-wide worry, as the average transaction price for new vehicles in the U.S. has already surpassed $48,000. Research firm Cox Automotive predicts the tariffs could drive prices up by 10% to 15% for impacted models, while vehicles not directly affected may see a 5% overall price increase.
STALLING THE NEW BUICK
Buick’s recent sales uptick comes off the back of a revamped vehicle lineup in the last two years. Company reports indicate a remarkable 61% sales increase in 2023 and an additional 10% growth in 2024.
The debut of the Envista in 2023, starting at $23,800, has contributed significantly to the brand’s resurgence. Following an updated design for the Envision, a compact SUV commencing at $36,500, expectations for Buick have been further elevated.
“Envision is our top seller right now,” commented Jeff Laethem, a GMC and Buick dealer based in Detroit. “The new styling for the Envista really made a difference.”
Buick’s market share in the U.S. has seen an increase, climbing from 0.8% in 2022 to 1.1% in 2024 and up to 1.6% in the first quarter of 2025, according to Edmunds.com data.
“Buick has probably never been in a better position than it is now in decades,” noted Ivan Drury, director of insights at Edmunds. “However, if this momentum falters or reverses, it may spoil the progress made towards restoring this historic name in the automotive industry.”
As of early April, Buick had an adequate inventory level on dealer lots, averaging 53 days, which exceeds the industry average of 47 days, as reported by Edmunds.
Amidst ongoing global trade tensions, GM must also contend with challenges in China, where Buick has traditionally performed well. The brand has struggled to maintain its presence in a market increasingly dominated by domestically produced electric vehicles.
Sales for Buick in China have plummeted by 65% from 2020 to 2024, according to data from Telemetry, an automotive advisory firm based in Detroit.
Given the dual challenges of tariffs and market instability in China, there is a noted risk regarding the brand’s long-term viability, as pointed out by Sam Abuelsamid, vice president of insights at Telemetry.
Source
finance.yahoo.com