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 only drive cars built in Hungary.
Fiat 500 Abarth-Toluca,Mexico.
Same factory that built the Dodge/Plymouth Neon,Chrysler Sebring convertible & Chrysler PT Cruiser
Hyundai Elantra N Line-Ulsan,South Korea
Both cars have been very reliable to date.
Yes, my car was built in Honda’s factory in Celaya, Mexico. Its VIN is under 5000. It was what I wanted, so I didn’t care. Ten years later, it’s still terrific.
Mexico: VW Golf SportWagen, Mazda3 sedan
South Korea: Genesis G70
USA: Saturn Aura
The Mexican cars were the cheapest and had the best quality. Would love to buy American/union but more often than not, quality or segmentation has dictated buying “international”. And no, the hatchback 3 being Japanese-built was not important enough to me to negate the styling penalty on that particular model.
I know where they were made, but didn’t really have much a choice due to necessity.
USA- 6
Italy- 1
Japan- 1
I suspect Lada doesn’t have much of an international presence at this point.
Maybe the stupid high US/Euro Exec salaries should come down more than the Japanese go up.
I’d prefer not to buy a new UAW car, but the only new car sold in the US that I have found myself seriously considering getting is a Jeep Wrangler, which means I’d be stuck with the UAW. If Jeep made a 2 door 4XE with Dana 44s front and rear I’d have a very hard time not getting one.
Yes I know the 4XE is a POS, what I really want is a Solid Axle front and rear Wrangler BEV, but that won’t come till after 2026, by which point I’ll be out of the new mass production car market due to bad regulations.
I care, but it doesn’t typically matter where my car was built.
Oddly enough, my Honda is the first non-domestic make but it’s also the first one I’ve car I’ve owned that I’d call truly domestic in manufacture. My Chrysler Cirrus was assembled in Michigan, but the powertrane came from Japan. My Pontiac G8 was full blooded Aussie. My Buick TourX was German. My Ridgeline is all Alabaman.
Props on a truly elite run of owning somewhat oddball but excellent cars
Just did the math. last American car was owned in about 1994.
Still experiencing PTSD.
“But aren’t all carmakers basically international at this point?”
Serious question: Are they? I don’t have sales numbers, but I assumed some of the smaller ones (Rivian, Lucid, Fisker, etc.) had a more local focus than the big companies. Even Tesla initially started with a US-based target audience. And as Chrysler dies off, how many Pacificas are they selling outside of North America? If Wikipedia’s data is correct, the answer is zero. They’re basically a boutique brand at this point, barely outselling Rivian in their own local market.
The Big Answer: I don’t care where my cars have been built.
I know where they all come from, though.
My vehicle history is as follows.
Made in USA: 7
Made in Mexico: 5
Made in Japan: 1
Most of them have been good to me, only one has required a rebuilt engine and the vehicle was over 30 years old at that point. Build quality is another topic, though.
Built in Japan. And am thankful for that every day. YMMV
I’ve mostly owned US and Japanese brands, with the US-branded cars coming from the US, Canada, and Mexico, and there may have been a Honda product that slipped in from Marysville. Then there’s my Jag made in the UK, the only European car I’ve ever owned.
I tend to buy cars made in Japan. My history of vehicles is as follows…
Japan x3
Korea x1
Canada x1
US x1
Wow. Stellantis must really be hitting it out of the park. /S
I don’t care where my car is made proving the following:
It’s properly designed and engineered to be a reliable quality product. Anybody can be trained to screw together a well engineered car. See Toyota and Honda using ‘lazy’ and ‘careless’ American labour to make cars well, or German ‘craftsmanship’ to make poor quality luxury vehicles. Quality issues are rarely due to the people assembling a vehicle and even then it’s often because they were given bad parts and instructions.
Proper quality parts are used with no corners cut to spec cheap components.
Labour practises are ethical and fairly compensated. Preferably unionized or at least labour has a voice in the operation. I’m a fan of private sector unions. Public sector, no.
I care increasingly less about where vehicles are made, mainly because US based automakers have pretty much decided to stop making the sorts of vehicles that interest me, and I’m not buying a crossover or a pickup just to have something with an American badge on the front. Build what I want or I buy it from someone else
I try to buy as much “made in the USA” stuff as I can but when it comes to vehicles that’s off the table. I spend too much time in it and own it for too long not to be exactly what I want. Last time that was a Detroit made Jeep, now it’s a Swedish made Volvo
I’ve actually never owned an American made vehicle. My previous 2009 GTI and 2012 CC were built in Germany (Wolfsburg and Emden, respectively), and my current 2014 Sportwagen was built in Mexico. My 1972 Super Beetle was also built in Emden, per the Birth Certificate I ordered from VW. And my fiancees 2018 Mazda3 was built in Japan, so we have three cars built in three different countries. It doesn’t really bother me where they’re made, my Mexican built Sportwagen feels just as well put together as the GTI that came from Germany.
My cars were built in Michigan, Hiroshima Japan, and Indiana (I think). I don’t care too much much about where my cars are made even though I work in the industry. Maybe I’d feel different if I was buying new but I don’t see how it matters much for buying used.
I grew up in the Rust Belt. I saw the UAW transfer case plant shut down, putting friends and neighbors out of work. Growing up my friends parents lost jobs when the manufacturing plant downsized or shut down. I worked a blue collar job with these guys in college. So maybe I am more sensitive to it than others.
Overall, I like to buy American when it makes sense. When I buy something that isn’t so cheap it is “disposable”, I’ll look to see if there is an American made option. Sometimes the cost makes your eyes water, sometimes it is still junk based on reviews, and sometimes it is worth spending a few bucks more to support an American manufacturer. I can afford it. If I was living paycheck to paycheck, I’m sure I’d not care about it.
I also don’t mind spending my money when the item is built in a country with comparable labor standards. I wouldn’t feel bad about buying a car made in Germany or Japan.
I know it is the “way of the world” at this point, but looking at a Chevy and seeing that only 1/3 of its parts are domestic content and it may or may not have been built in the U.S. is pretty disappointing. So much for “buying American”. It isn’t even an EV, there is no big battery in there to excuse it.
And Jacques Nasser got almost $18M in 2001 to leave Ford after being criticized for diversification at the cost of core investment and some other things I can’t recall and don’t care to look up.
I’ve looked at cars to buy that were built all over, but the ones I actually bought were made in Japan and the US. Only conceivable country of origin that I wouldn’t buy from unless a very many things change is China.
Made in Japan:
’70 Datsun 240Z
’74 Datsun 260Z
’84 Subaru GL wagon (FWD)
’83 Subaru GL sedan (FWD)
’90 Subaru Legacy wagon (FWD)
’06 Mazda 3 2.3 hatch
’22 Toyota GR86
Made in US:
’12 Ford Focus SE hatch (5MT)
’16 Ford Focus ST
’08 Toyota Camry
Don’t care much where was made. I have an American Car, made in Canada, out of Japanese parts. Is there really a car made in one country anymore?
Most are assembled in X, but from parts built elsewhere.
Not sure there’s a Detroit 3 anymore, Maybe a Detroit 2? But GM’s moving out of downtown, even if still in the area.
We try to buy ‘merican’, 2 out of 3 of our cars the VINs start with a 1, the other with a J, and it’s replacement will also be with a J, though a better J, at least we hope.
I’m getting to the point of where the thing is made isn’t as important as how, forced labor, environmental footprint, try to be less on the side of evil there.
Well, if you’re going by specifically headquarters city, there haven’t been three automakers actually based in Detroit for ages – Ford is in Dearborn, Chrysler was in Highland Park and then Auburn Hills, American Motors moved to Southfield in the ’70s, so GM has been the only one for long time
Stellantis is the only one with an assembly plant entirely within Detroit, though (Jefferson North). GM’s Detroit/Hamtramck straddles the border
Isn’t GM just moving north like 2 miles?
Yeah, still there, as Ranwhenparked said they’re the mainstays.
At one time I had 3 car manufactures built at the same plant. 68 Lemans, 85 Toyota Pickup, and 18 Model X all built at the Fremont factory. AND, I live in Fremont. Keeping the $$$ local. This would make a great game, what plant had the most brands built in them.
My dad is a union lifer and he gets super mad at anyone buying a foreign car. I tried to explain to him how buying a Toyota build in his city is better than buying a Chevy built in Mexico, but the union power is too strong with him.
I’ve owned 2 Focus’, a Ranger, and a Fiesta. So 3/4 made in Mexico and 1 made in the USA.
I don’t have particularly strong feelings on where it’s made, but I remember the consensus being the Mexican built Focus was generally more reliable than the US made ones. Though not exactly apples to apples since they made the sedan in the US and it was available with the craptacular SPI engine.