U.S. Manufactured Content--R&D/Assembly/Insurance of American Branded Cars, 2016

The content below was excerpted from this link: http://kogodbusiness.com/reports/auto-index/

U.S. Content of American Branded Cars, 2016

 

North America (Mexico, Canada, and the U.S.) produces tens of millions of cars and trucks each year.  Both European, Japanese, and U.S. car manufacturers operate parts factories, sub-assembly factories, assembly plants, R &D facilities, and testing grounds.

 

If we take the Honda Accord (a widely purchased car) and 81% U.S.) as a reference for “place of origin”, it ranks in the Kogod School of Business annual report on domestic content of vehicles as 81% American.  Here are all the U.S. company branded vehicles that have LESS U.S. content than the Accord (almost all of these vehicles have components or assembly in Mexico or Canada, and cross borders seamlessly with no tariffs.)  In rank order of % U.S. Sourced:

 

Ford Taurus                                                     80 1/2%

Buick Verano

Chevy Cruze

Chevy Colorado

Jeep Wrangler Unlimited

Ford Explorer

Ford Mustang

Cadillac ATS, CT6, CTS

Jeep Cherokee

Ford Expedition

Lincoln MKS and Navigator

Chrysler 2002

Dodge Challenger SXT

Jeep Grand Cherokee SRT

Jeep Wrangler

Chevy Silverado

GMC Sierra

Jeep Compass

Jeep Patriot

Ford Edge

Ford Focus

Lincoln MKC

Ford Escape

Buick Regal

Chrysler Town and Country

Lincoln MKT

Jeep Gran Cherokee

Dodge Ram 1500

Chrysler 300

Ford Fusion

GMC Terrain

Dodge Grand Caravan

Jeep Renegade                                                38%

Mexico and the U.S. Automobile Industry

Where is that car made?

Cars are made of literally thousands of parts, which are then assembled into sub-assemblies (transmissions, engines, computer systems, exhaust systems, etc.).  Manufacturers will source parts and subassemblies to anywhere in the world where they can get the best price for the given specifications.

For decades, American car manufacturers have used the efficient transportation options available in North America to seamlessly integrate Canadian, U.S., and Mexicanparts, subassembly, and assembly.  Some parts and subassemblies cross borders two or even three times before a car is finally ready for sale.  Very few cars of North American origin have their entire list of parts and their final assembly done in the U.S.  Since the passage of NAFTA, which reduced tariffs to essentially zero on the transfer of parts and cars across borders, economists estimate that the price of a new car has been reduced from about $250 to over $700 per car, depending upon the car.  If tariffs are reintroduced, car prices would be expected to rise by that same amount.  This gives car buyers less money to spend on birthday presents, housing, restaurants, movies, shoes, and anything else they might want.  With about 15 million cars sold per year, this is a tax on consumers of about $7.5 billion dollars.  That’s a $7.5 billion reduction in spending in all those other industries, so restaurants, movies, sellers of birthday presents, etc., will all have falling sales, and will lay off workers.  For some buyers, an extra $700 for a car will make them put off buying a new car, and will reduce car sales, causing layoffs in auto manufacturing, sales, and service.

 

Here’s a partial list of cars that have at least partial sourcing of parts, or assembly, in Mexico or Canada:

Ford Fusion, Fiesta, Lincoln MKZ assembled in Mexico

Ford Edge, Flex, Lincoln MKX and MKT assembled in Canada

Ford Focus: assembled in U.S. but transmission from Germany, and host of parts from Canada

Ford F-series pickup: 15% of parts from Mexico

Ford Mustang: transmission in some models come from China

Chevy and GM are used interchangeably below:

Chevy Camaro, Equinox, Terrain, and Impala are assembled in Canada

Chevy Cadillac SRX and Escalade EXT, Silverado, and Sierra assembled in Mexico

Chevy Corvette: various engines from Canada and transmissions from Mexico

Chevy Silverado: various transmissions from Mexico

Cadillac CTS: various engines from Canada or Mexico, and transmissions from Mexico

Chrysler: 300, Dodge Challenger and Charger are assembled in Canada

Chrysler, Dodge, and Jeep vehicles average 20 percent of parts from Mexico

Jeep Renegade: assembled in Italy

 

https://www.kbb.com/car-reviews-and-news/top-10/my-car-is-made-where/2100000943-0/

http://www.autoblog.com/2010/10/06/is-your-car-really-american/

 

 

Purpose

Politics and economics are inextricable. Therefore, I've enlisted the assistance of my husband, Thom, to provide economic and historical perspective updates that accompany political events. People are far less knowledgeable of how economics impacts every aspect of our daily lives. When things are heated, it helps to have a basic understanding of the elements that drive policies.