Monday, May 08, 2006

BUY LOCAL?

Autoblog is a site that keeps tabs on the auto industry and sales, covering new models, sales of existing ones, and technology that is being developed. While they so far haven't mentioned the restart of my favorite car show Top Gear, the Autoblog recently had an article about a study done of foreign and domestic auto sales in the United States:

The Detroit Free Press undertook what had to be an excruciating task - breaking down the content of vehicles from the top six manufacturers in the U.S. - to determine how much of the vehicle Americans are buying is actually "domestic" or "foreign". These are murky waters, even for those of us that work in the auto industry.

Eric Bryant goes on to explain

Then there's the tendency of automakers to fudge the numbers. For example, 64% of the Chevrolet HHR's parts come from Mexico, where it is built. But GM states on the window sticker that it has 85% domestic content. GM explains that it uses an average of content from its larger SUVs (mostly made in the US) when determining the HHR's content; a twist of logic that causes us here at the Autoblog Towers to furrow our brows and utter comments at our computer monitors that cannot be repeated in polite company.

It'll probably come as no surprise to most of our readers that the domestic content of the "domestics" is continuing on a downward trend, and that of the "foreign" manufacturers continues to climb. But we're quite certain that much of the general public is unaware of that trend.

Commenters replied:
Excellent article. It amazes me how many people still think the concepts of "foreign" and "domestic" begin and end with the badge on the hood.
-by PJ


The Mini uses a Brazil-produced engine, that's all I'm aware of.

The key issue isn't where the car is manufactured, anyway. It's where it's designed and developed. If your kids decide they want to work in the auto industry, do you want them to be autoworkers or engineers/designers/marketers?

This said, designers are a fairly international bunch, and foreign automakers have increasingly large U.S. product development facilities. So even on this basis it's not so clear cut.

The main thing that won't change is the composition of senior management, where American firms are easily the most international, but very few people make it to that level, anyway.
-by Michael Karesh


I guess there's not much merit to the argument that someone should/should not buy a vehicle because it's 'American' anymore.
-by Hooray for Capitalism


The issue is not where the parts are made or even where it is put together. The issue is American owned. The VAST majority of the money still goes about to the parent country. Not to mention the fact that USA will become a colony of foreign businesses.

We need to give American companies a fighting chance by dealign with the trade deficits & currency valuation. At least make it a fair fight.
-by Shawn


#5 - it's not quite as simple as that. US tax laws encourge foreign based companies such as Toyota to leave their profits in the US and reinvest them here. Therefore it's over simplistic to assume that an auto manufacturer's profits only benefit the home nation of the manufacturer. Additionally, the vast majority of the components are not manufactured directly by the car maker, but rather suppliers. If a large percentage of the supplied content is US based, that supports the US auto industry directly, regardless of the home country of the auto manufacturer. Finally, US auto companies also profit from their oeprations in foreign countries...for example GM is one of, if not the largest, seller of automobiles in China.

There is no such thing as a domestic or foreign automaker anymore. People who claim that they are "buying American" to support the US auto industry are deluding themselves.
-by JAS28

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