General Motors (NYSE:GM) will import a made-in-China SUV for sale to Americans starting next year, according to a Wall Street Journal report. The report, which hasn't been refuted by GM, cites "people familiar with the plan." The Journal said that GM plans to import the Buick Envision, a premium mid-size crossover SUV made in Shandong province, starting sometime next year.
If it happens, it will be the first move by a major automaker to sell Chinese-made vehicles in the United States. What's the story here, and how will Americans react to a Chinese Buick?
A new SUV that fills a gap in Buick's U.S. lineup
The story, simply put, is that this is the quickest and easiest way for GM to get a new SUV to U.S. Buick dealers. The Envision is an all-new model, introduced in China late last year. In GM's China lineup, the Envision slots between the small Buick Encore and the big Buick Enclave. It has sold very well, and its success has helped GM offset slowing sales of other models.
Here in the U.S., Buick dealers have the Encore and Enclave, but nothing in between. With sales of premium crossover SUVs soaring here, and with growth slowing in China, it makes sense to offer Chinese-made Envisions to U.S. dealers -- at least on paper.
It also allows GM to ask the big question: How will Americans react to a Chinese-made GM product?
GM haters are gonna hate, but Buick dealers like the idea
GM has been taking fire from conservative critics for years here in the U.S., a consequence of the company's 2009 bankruptcy and bailout. The decision to import a vehicle from Communist China! already has some of them howling -- but I don't think partisan howling is likely to dent sales of the Envision.
After all, the Envision won't be the first import to be sold as a Buick in the U.S.: The hot-selling Encore is made in Korea. And GM, like, Ford (NYSE:F), Fiat Chrysler (NYSE:FCAU), and a growing number of "import" brands, already builds vehicles in Mexico for sale in the U.S.
The Journal talked to several U.S. Buick dealers who seem to like the idea. The consensus seems to be that the Envision will do well, as long as its quality is up to par with other Buicks. (It's a safe bet that it will be.)
Given the big sales gains posted by other premium midsize crossovers recently, it's also a good bet that just about all Buick dealers would love to have a competitive model in that segment to sell.
Apparently, the UAW is OK with this, too -- for now
The Journal reported that GM and the United Auto Workers (UAW) discussed the plan to import the Envision during recent contract negotiations. UAW leaders have expressed big concerns in the past about the possibility of a Detroit automaker importing cars from China. But the Journal said that GM and the UAW "appear to have come to an understanding" with respect to the Envision.
One factor that may have given the UAW some comfort: We probably aren't talking about huge numbers of vehicles. The Enclave and Encore each sell around 5,000 units a month in the U.S. Assuming that it's well received, it's likely that the Envision would post similar numbers.
If nothing else, it will be an interesting experiment. Will Americans accept a Chinese-built Buick? If so, will it encourage Ford and other rivals to explore the idea? We'll find out when the first Envisions arrive next year.
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Why General Motors Is Feeling Good About 2018 -- and Even Better About 2019
Despite profit "headwinds," GM's guidance is upbeat.
GM Proved Doubters Wrong in 2017 With a Strong Crossover Lineup
GM surprised the market when it announced strong guidance thanks to a revamped line of crossovers and SUVs. Better still, it delivered on the promises.
This Will Cost Corporate America Billions This Earnings Season
Find out why tax reform is a two-edged sword.