For the first time ever, foreign automakers have built more cars in the United States than the Detroit 3 here in America. That’s a big deal. Even if you add in the non-Detroit 3 automakers (Lucid, Tesla, Rivian) you end up with a deficit.
Ford is going in the opposite direction as it has cut back a lot from its original plan to build battery facilities in Michigan and, right on cue, Michigan is cutting back its massive subsidies for the project.
For Toyota, in particular, building cars in the United States has worked out quite well. Toyota is killing it right now, so it’s no surprise its Chairman/outgoing CEO Akio Toyoda got a big fat paycheck. This is also a big deal, mostly because that’s not how Japanese companies usually work.
And, finally, used car values continue to drop like a stone.
International Automakers Have Increased Production 85% In The Last 25 Years
There’s nothing wrong with a few light trade barriers. Fences make good neighbors and all that. Starting in earnest with President Lyndon Johnson, the American government has frequently taken steps to encourage automakers to build cars here in the great United States. Under the Reagan Administration, foreign carmakers were further coaxed into getting their supplier buddies to build plants here as well.
Eventually, foreign automakers decided, hell, if we’re building cars here and getting parts here, you might as well design and engineer some cars here, too.
Some 4.94 million cars were built in the United States of America by international automakers. That’s what we’re calling them, I guess, because the report I’m quoting is from two different organizations (Autos Drive America and American International Auto Dealers Association) that are made up of carmakers and dealers representing non-American brands. They use “foreign” once in scare quotes and international 17o times. But aren’t all carmakers basically international at this point?
Either way, brands that are not traditionally American ones built 4.94 million cars here in 2023, the Detroit Three built 4.60 million cars here, and Lucid/Rivian/Tesla built 754,342 vehicles.
This speaks to the success of foreign automakers and also the success of NAFTA/USMCA in encouraging Stellantis, GM, and Ford to build plants in Mexico and Canada. Perhaps that’s not entirely fair, as Ford builds more cars here in the United States than any other carmaker. Plenty of foreign automakers also build cars in Mexico.
The distribution across America for these “international automakers” is also kind of interesting, as seen in this graphic:
Roll tide!
What you’ll notice about this graphic is that most of these places are in southern states where unionization isn’t a given. That explains the extreme urgency of the United Auto Workers union’s campaign to win union contracts with these automakers. The UAW has been on the decline for years and betting on the Detroit 3 doesn’t make a lot of sense.
It is, as pointed out by a professor in The Detroit News, literally “existential” for them, as their power falls with every closed plant.
Ford Cuts Back Battery Plants In Michigan, Will Lose About $750 Million
The hype around electric cars and the massive success of Tesla, coupled with increasing government requirements, led automakers to announce plans to build a ton of factories to create batteries, motors, and all the things you need to make the damn things.
And then EV car sales started to slow down, and carmakers started reconsidering some of those plans, including Ford, which massively scaled down plans in Michigan.
“We want people to trust us, we need people to trust us. We try to bring all the information we can forward to the (Michigan Strategic Fund) board,” Christin Armstrong, a senior vice president with the Michigan Economic Development Corp., said in an interview on Monday.
“We come with good intentions … what we are presenting to the board is the best project we can put together based on on the info and circumstances and conditions in that moment.”
The state and Ford agreed Tuesday to substantially cut a proposed $825 million in tax credits for an immense new EV battery factory planned for outside Marshall, reducing that to just shy of $225 million. They’re also slashing $69 million from a public grant for the project.
This is a little awkward because the Biden Administration and Governor Gretchen Whitmer made a big deal of this move. Better to reassess and cut back than just build these things and realize they’re not yet needed, I guess.
Akio Toyoda Gets $10 Million, Or About A Fourth Of What Carlos Tavares Got Last Year
The super disproportionate executive salary isn’t something that Japanese companies are hugely keen on and, in fact, the last time the CEO of a Japanese automaker tried to get a pay bump, well, it ended with him having to sneak out of the country in a box.
Ghosn merely got $6 million, so Akio Toyoda netting a $10 million payday is quite the jump, as Automotive News reports. OF course, this is happening because Toyota has become the most profitable company in Japanese history.
This whole thing is part of a larger trend of Japanese companies adopting more European/American-style corporate practices. See, also: the decrease in cross-held shares.
Japan still has a way to go, however, before it’s at the same level as American automakers re: executive salaries. To put this into context, last year Mary Barra pulled in about $28 million and Carlos Tavares made $39.5 million.
Used Car Prices Drop For 22nd Straight Month
The pandemic and related supply shortage led to an extreme lack of new cars, which inevitably led to a huge run on used cars. It didn’t hurt that interest rates were super low so people could finance used car purchases with relatively low monthly payments.
As you can see in the graph above from Manheim, the used vehicle value index shows wholesale rates continue to fall. From Manheim:
“Wholesale value declines have been stronger than we normally see for much of the last two months,” said Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive. “However, even though much of the industry was feeling the retail sales disruptions caused by the CDK outages in the latter part of the month, Manheim started to see wholesale price declines decelerate, ending the month at a seasonally normal pace. Sales conversion is currently running several points above the previous three years, including 2021, indicating that buyer demand is relatively strong despite all the uncertainty in the market.”
In June, Manheim Market Report (MMR) values saw weekly decreases above long-term average declines, with the first half of the month showing stronger depreciation while the last week slowed noticeably. Over the last four weeks, the Three-Year-Old Index decreased an aggregate of 1.5%, including a decline of only 0.2% in the last week of the month. Those same four weeks delivered an average decrease of 0.5% between 2014 and 2019, showing that depreciation trends are currently running higher than long-term averages for the year.
I’m glad I sold the Subaru, which… I owe you all updates on that. They’re coming, I promise.
What I’m Listening To While Writing TMD
I have a theory that the right amount of famous for me is, actually, not that famous. Would I like to be Andy Willman, the mega Top Gear/Grand Tour producer? Maybe. That’s pretty close. Pharrell Williams is way too famous. That dude can’t go to Harris Teeter and buy corn. That’s all I’m saying. People will bother him while trying to buy corn. You know who can buy any kind of cereal or grain he wants? Chad Hugo. He is the guy in producing group The Neptunes who is not Pharell Williams. He’s in the videos! He gets the awards and the credit! He gets to hang out with Pusha T and make songs like “Mr. Me Too” for Clipse. Buys corn whenever and wherever he wants. Chad Hugo. That’s the dream.
The Big Question
Do you know (or care) where your car was built?
I don’t especially care, but my car was built in Japan, my bike was built in the USA
Currently registered cars, in the order I got them:
United States
United States
Great Britain
Yugoslavia
United States
West Germany
United States (wife’s)
Bikes:
Italy
Japan
Great Britain
Japan
Taiwan
So I’m pretty much all over the map. As a generalization, the younger you are I think the less you care where something comes from. Older people lived differently and carry certain biases let’s just say. But generally if the product is good I don’t think it matters to most. It will be interesting to see what happens when the Chinese cars arrive en masse.
Haha, I liked that video, it was actually pretty funny in some spots.
What I’m really here on TMD to comment on is to remind everyone and MH in particular that you haven’t listened to The Mars Volta’s De-loused in the Comatorium recently enough. Cicatriz E.S.P. continues to be a fucking incredible groove to this day, none of the album is bad (I’d say no-skip but there’s a 1:29 ambient track, and an opening ambient track that’s actually good for building tension).
Viscera Eyes from Amputechture has better hooks than a pro fisherman’s tackle box, but the whole album itself isn’t as solid.
I don’t like noodly instrumental prog and most prog as a result, I don’t like shrill vocals, but Cedirc Bixler-Zavala brings control and ache into every inflection, like finishing every line is the last breath he has to give. The drummers are varied over the years but the odd-time and polyrhythms, often Latin-infused, rip like jazz-metal (or, uh, prog I guess) in and out and hit hard enough to let you know your heart has been beating the wrong rhythm this while time, and should have been tapping out I-play-the–cla-ves.
Mechjaz… my man (or whatever you are) nobody cares what we’re trying to do here. Which is enrich their lives with fantastic music.
You mind if I pick a magnificent album that came out a few years earlier (2?) to compete with your well thought out recommendation?
My friend… Tool “Lateralus” is damn near headphones perfection. Not a skip-worthy song on the album.
Oh yeah. I’ve listened to that hundreds, maybe thousands of times.
Let’s see my FJ was built in Japan, my Firebird was built in the US, my Cummins the US if I am not mistaken and my fiances Buick in Deutschland so I don’t care much where the vehicle is built as long as it is a decent vehicle. Only concern is cars fully built in China.
What fun Autopian themed Risk will be!
Three of mine were made in Hiroshima (Mazda FC RX-7, RX-8, Mazda5), and the last was in Windsor, ON (Chrysler Pacifica Hybrid) – I had to look up the Mazda5 but knew the other three.
The country of manufacture makes some difference – is it a democracy? Does the US have a good relationship with the country? Otherwise, it doesn’t really move near the top of the priority list.
My International was built in the States, and my Saab was built in Japan…
Dingolfing, Germany
Lansing, Michigan
Hamura, Tokyo
Don’t care much. I do care that they are made by people who live in democracies.
I actually think Third Eye Blind is slept on in the grand scheme of things. They kind of get lopped in with assorted 90s/early 2000s rock one hit wonders but they actually had a ton of hits and their self titled album is a legitimate no skip record.
And I genuinely very much like some of their later work. their 2015 album Dopamine is one I regularly go back to often. I haven’t loved too much of their work since 2016, but albums like Ursa Major and Out of the Vein are fantastic, but people have a hard time looking past their debut and Blue.
My Camaro was built in Michigan, the Biege Unicorn was built in Virginia, my 2 BMW’s were built in Germany, the Pinto was New Jersey.
When I’m buying things I do try to purchase made in America and then made in a country where labor laws and rights are a thing if at all possible.
And foreign automakers will continue to build more in the US based on the tax credits rules for electric cars. Its one of the things I recognize to the current administration, bringing things back to the US, slowly getting there.
The supplier company that I work for, is building more and more manufacturing plants in Mexico, including Central America, taking things out of Asia.
My international vehicles (as opposed to my International vehicle) were built in France, the Netherlands, Sweden, and the UK. My domestic vehicles (including, of course, the International) were built in Minnesota, New York, and Ohio. I suppose I care enough to be able to answer the question.
My Subaru was built in Indiana. This was surprising to some dude in the Texas panhandle that I encountered on a lunch break while rolling through on a road trip not long ago. He wasn’t rude or anything, just asking about the car for some reason. He said he doesn’t buy foreign brands but kinda likes Subarus (not sure why). He was driving a Mexican built Ford and I think reconsidering his position on things.
My Dad has put “Made in USA” stickers on the Chevrolet HHR’s that we use to deliver with, completely unaware they’re all made in Mexico.
I always forget my wife’s Outback was made in Indiana until I see the Made With Pride in Indiana sticker while washing the car. Then I shudder at the thought of living in Indiana.
It’s a great place to live especially if you’re into cars and auto racing. With the Indy 500 and the US Nationals, we’ve got two of the premier events of American racing.
I’ve got two cars built in Japan, one built in Mexico, and the other in England. Guess I’m a communist or something.
That’s a Lada cars comrade.
да.
Uh am I missing something or is this math not mathing?
Since when is 4.94 > (4.6+0.75) ??
Maybe because the Detroit Three is really the Detroit 2.5?
4.6*(2.5/3)+0.75 = 4.58!!!
Jay Powell is in the middle of a dangerous game of “will he or won’t he” chicken with rates at the Fed. Stay strong, man, and don’t listen to the outside voices; we’re not done yet. If you let your foot off the brake now, or in the next couple months, we will lose a lot of the progress made up until this point.
You can quote me on that.
Touché.
I’m guessing this is why we use ancient methods to control inflation instead of coming to with new ideas.
You can dress it up however you want, but there are only two real levers to control inflation, interest rates and taxation (primarily on the wealthy). Unfortunately one of those is politically untenable.
I think nearly all of my past cars have been US built, and a fair number from here in Michigan. The exception in the past was my Saturn Astra (Belgium), and I think I had a couple Canadian GM’s. Currently I have (2) Michigan (RAM &STS), (1) Tennessee (Acadia), (1) German (330e), (1) UK (MGB), and (1) Japanese (Miata). I do try to support US brands if there is a competitive product, but it’s below some other factors in the buying decision.
Wow…someone who has owned an Astra. I forgot that those existed, but am occasionally hyped when I see one driving around.
I really enjoyed the Astra. I bought it new and drove it for 9 years with no problems at all. Every option except leather with the stick-shift. Dottie in the Discord currently has an Astra.
Yep still scooting around in one. Fairly basic XE trim with the 5 speed but it’s been a fine car.
My car was built in South Korea. I can’t really say I care too much about where my cars are built. I’m not necessarily a brand loyalist in any capacity, I just want the best car for my needs and I do a ton of research. Two years and a month after buying it the Kona N remains the best car for my needs and it’s already half paid off/the payments are downright cheap in today’s market.
However, my wife will need a new, family oriented car in the next few years and despite not having a shred of enthusiast DNA in her she is insistent on it being Japanese. Her entire family owns Japanese cars and she’s utterly convinced that anything Japanese will be completely problem free. We all know that that isn’t necessarily true, but she’s also not all that far off. I personally like the new Santa Fe hybrid a lot and think it’s perfect for us/will save us about 10% or more over a comparably equipped Highlander hybrid, but alas.
The Kia Boys nonsense is ingrained in her mind and she’s not going to get over it anytime soon. I wish the CX90 was better than it is because she could definitely be convinced to consider a Mazda but the first batch of PHEVs has been an abject disaster, and that’s the variant we would get.
I’ve got a friend like that. She’s owned Honda since Day 1, and refuses to consider anything else. She even talked her husband into one (though he got the Civic Si since it has a standard). Husband isn’t convinced after about 4 years of ownership.
The amount of issues my friend has had with her last two CR-Vs has been dumb. Mostly because there are all sorts of little faults that annoy you in day-to-day driving, but don’t make the car unfunctional. After lots of time (and a fair bit of money) at the dealership, and she’s still blinded by the light.
BLINDED BY THE LIGHT
…anyway, she currently has a 2015 Honda and it/every Honda in her family has been problem free. They’re also smart because they keep cars for 10-15 years. I wish I could say I’m the same way, but I’m an enthusiast and I live in a perpetual state of temptation to get into the latest and greatest thing. At least this time I’m holding out until my Kona N is paid off.
Trying to convince non enthusiasts that their car opinions are wrong is a complete waste of time and energy. The average person is fiercely brand loyal, which is a product of capitalism. Hell, my mom’s Audi mechanically totaled itself at 60,000 miles last year and we spent 3-4 weeks fighting with insurance and various mechanics before we had to cut our losses.
Do you know what she replaced it with? Another Audi. She initially said she didn’t want to deal with German luxury car shit anymore…but then refused to consider anything I recommended, insisted that she knows she doesn’t like Japanese cars despite going 20+ years without driving one, and promptly bought something off the lot of the dealership that had spent weeks dicking her and my dad around.
Suffice to say, non car people tend to form opinions that are based on nothing other than emotions and anecdotes. At least my wife’s opinions are fairly grounded…although I find the thought of a Highlander hybrid to be uniquely depressing for some reason. That car isn’t near the top of its class in any measure except reliability…but that’s priority one for her. What can you do?
My friend and my wife are both decidedly non-car people, and both are fiercely loyal to their respective choices. I tried talking my friend into at least looking at other brands before she got her first CR-V, but alas, it was like talking to a brick wall. At least she isn’t a fan of Dodge, I guess?
Air ride and under glow will make things fun!
Kids will love it.
I assume you’ve had great success convincing enthusiasts that their opinions on cars are wrong? LOL, couldn’t resist. Excuse the pedantism.
Jokes on you, enthusiasts are never wrong 😉
I find the Highlander to actually be one of the more characterful appliance Toyotas that they sell (way better than the ugly RAV4, ugh). The interior is nice in beige and I love the big shelf across the passenger side. Besides, it’s sold as a Crown in China and a Kluger in Australia. Isn’t that interesting?! Most brands don’t sell their American-style three-row CUVs anywhere but here and maybe Aus. The new Santa Fe is for sure more characterful, but I think I’d choose a Kluger to take across the Outback.
Just get the Inline 6 CX-90 – haven’t seen too many issues with those and it’s technically still a hybrid!
Technically, yes. It’s exponentially more efficient than its pure ICE rivals as well. But 25 MPG or whatever it is is tough to swallow when the Highlander and Santa Fe hybrids get about 35 combined.
My car is a Kia from Korea and my pickup is a Chevy that was made in Canada. I’m more interested in buying vehicles where people get a living wage making them than specific countries, and quality and value also rank a lot higher than picking something American made.
In total, I think about half the vehicles I’ve ever owned have been built in the US.
One of my cars was assembled in the US, the other in Mexico. The parts, however, are sourced globally, so where was it made? I don’t know, I’d have to say all over, including China, and it wouldn’t surprise me if certain parts were made in other countries we have tense relationships with. It doesn’t matter whether I care about this though, because that’s how every car is made.
That’s a really good point. A car could be “made” in the US with very few US-sourced parts. Yes, your neighbor down the street might assemble it, but where are the parts coming from?
That’s definitely the much better – and likely much more difficult to assess – metric that should be talked about if we want to go the patriotic route.
I had a Chevy Cruze like that with an engine from Austria and transmission from Korea. The sheet metal was stamped and welded and painted and the final assembly was in Ohio. Parts like the AC compressor, alternator, steering rack, suspension struts, ABS module, aluminum wheels, etc were from all over the world.
This is the answer I’m thinking of. There is the question of where your car is made, and there is the question of what percentage of the content is US-based. Generally speaking, your big ass stamped parts are going to be local, and a lot of your electronics are going to be Chinese. Everything else is a toss up, and consumers do not have visibility into where their “car” was “made.”
I normally don’t care a whole lot about where my cars are made, but generally, you can kind of tell based on the quality and longevity of the car (in my experience). That being said, the brand probably matters more than the place of manufacture.
As of right now, I have 4 cars in the driveway. Both Mazdas were made in Japan, the Toyota was made in the US, and the Honda was made in Canada.
Side note: I’ve always thought it was funny saying that my Tacoma was built where Teslas are made (NUMMI) to Tesla fanboys and folks who don’t know a whole lot about cars.
3 of my 4 main vehicles were built in the USA, along with both my projects.
The other is from Australia.
I have also owned vehicles built in Mexico and Japan.
In general, I would prefer to buy from America, then close allies like Japan, Canada, or Western Europe. I’m not going to lie and say country of origin overrides all other considerations when purchasing (exception: China), but it’s pretty important and has become more so as I’ve gotten older and seen more of the effects of offshoring locally.
Which Holden do you own?
Hey, he could daily a 90’s Mercury Capri.
“Hey what about me?” – Mitsubishi Diamante
I have a 2016 VF (Chevy SS)
The Harris Teeter line is a delightful choice of regional specific grocery stores.
I am not too picky on where my cars are built, but I do draw a line at buying anything built in China. Any allied or neutral country is fine, but adversarial nations not so much. Likewise I would not buy a car built in Russia or N Korea, but not too worried about that one.
You’ve got it backwards. America has a long way to go before we all get CEO’s pay closer inline with the real humans that make the things.