Thursday, 5 July 2012

Cars.Com: Japan-Based Honda and Toyota Now Make 4 of Top 5 "American-Made Cars" in U.S.

2012 Cars.com American-Made Index

Rank 2012Make/ModelU.S. Assembly LocationRank 2011
1Toyota Camry Georgetown, Ky.;
Lafayette, Ind.
1
2Ford F-150 Dearborn, Mich.;
Claycomo, Mo.
-
3Honda Accord Marysville, Ohio 2
4Toyota Sienna Princeton, Ind. 6
5Honda Pilot Lincoln, Ala. -
6Chevrolet Traverse Lansing, Mich. 8
7Toyota Tundra San Antonio 9
8Jeep Liberty Toledo, Ohio -
9GMC Acadia Lansing, Mich. 10
10Buick Enclave Lansing, Mich. -
Sources: Automaker data, Automotive News, dealership data, and National Highway Traffic Safety Administration

Cars.Com -- "In today's global economy, there's no easy way to determine just how American a car is. Many cars built in the U.S., for example, are assembled using parts that come from elsewhere. Some cars assembled in the U.S. from largely American-made parts don't sell well, meaning fewer Americans are employed to build them. Cars.com's American-Made Index recognizes cars that are built here, have a high percentage of domestic parts and are bought in large numbers by American consumers.

The Toyota Camry topped this year's American-Made Index, extending its No. 1 status to four years running. Ford's F-150 landed by a photo-finish at No. 2, falling behind the Camry by fewer than two days of sales. The F-150 was once a common AMI leader, topping the index from 2006 to 2008, but lower domestic parts content had dropped the best-selling pickup off the list. With its domestic parts content back to 75 percent — up from 60 percent last year — the F-150 returns to the AMI for 2012."

Here's something really interesting:

"A globalized industry may mean fewer cars that hail mostly from the U.S., but it works for many companies' bottom lines. Ford's global One Ford strategy coincides with falling domestic parts content in its vehicles. Five years ago, Ford had 20 models with 75 percent or higher domestic parts content. For the 2012 model year, that figure fell to three. Yet the same strategy has helped to bring Ford into the black with 11 straight quarterly profits.

Ford isn't alone. Cars.com surveyed domestic parts content for the top 113 models on the market, which make up 89 percent of all the cars sold through May. More than 80 percent of those cars — the vast majority of what shoppers are buying — have domestic parts content below 75 percent or are assembled in Canada, Mexico or abroad."

MP: Interesting that four of the top five, and five out of the top ten "American-made" cars are Japanese automakers Toyota and Honda, and also interesting that pursuing an "American-made" strategy might actually lower profitability. Perhaps Japan-based Toyota and Honda are intentionally sourcing parts in America at a higher cost than using Japanese parts for the positive publicity value in rankings like this one, even if profits are adversely affected?  Whereas Ford, as a domestic Big 3 automaker doesn't have to be concerned about the adverse effect of increasing the use of foreign parts, because U.S. consumers will still perceive Fords as being "Made in the U.S.A."

Although the "American-Made Index" is interesting, it also helps highlight how meaningless the whole concept of "American-made" has become in a highly globalized industry like motor vehicles with global sales, global production, and global supply chains. Does it really matter any more that a Ford Focus has lower domestic content than a Toyota Camry?  Most consumers shop on price and value and don't consider domestic content, although 23% of consumers surveyed by Cars.com last month still say that "they would only consider buying a car from the Detroit Three."  Well, at least that means that 77% of American consumers are thinking clearly about this issue, and shopping sensibly on price, value, quality and service, regardless of the national origin of the automaker or the domestic content.

But the old traditions of driving only "American cars" and demonizing "foreign cars" die hard in places like Flint, Michigan, where you still find signs like these at UAW offices.         


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