DETROIT — Nine years after it was an unlikely survivor of General Motors' bankruptcy restructuring, Buick again finds itself in a precarious situation.
This time, the problem isn't weak products or an aging customer base, two areas where it has improved dramatically. It's the prospect that the Trump administration will impose a 25 percent tariff on imported vehicles at a time when more than two thirds of the Buicks sold in the U.S. are made overseas.
Such a tariff would have a much broader effect on Buick than GM's other three brands. It could put Buick in an untenable position in the U.S., which accounted for only 15 percent of the brand's 1.4 million global sales last year — while China made up 83 percent.
Though it has become one of the industry's top performers on customer-satisfaction and dependability surveys, Buick doesn't have the pricing power to pass such sizable cost increases onto U.S. buyers, pushing it more into direct competition with German luxury brands and its corporate sibling, Cadillac, analysts say. But absorbing the tariffs, which GM has vocally opposed, could harm Buick's long-term viability in the U.S. and force a major overhaul of the brand's lineup and production footprint.
"Buick is considered a premium brand but not a luxury brand," said Autotrader executive analyst Michelle Krebs. "It's hard for me to imagine that GM wants to absorb that cost because they're so fixated on profit margins."