What is an "American" Car? - Autoline on Autoblog with John McElroy
In other words, is a Toyota Camry built in Kentucky an American car? Or is a Ford Fusion that's made in Mexico an import?
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
My definition of an "American car" is a vehicle which was conceived, designed, engineered, developed and manufactured in America. It might have a Big Three logo on it, it might have a Japanese logo on it. As long as it meets that criteria, it doesn't matter to me.
But I also allow for some nuance in my definition. As far as I'm concerned, product creation is what really counts. That's what generates the greatest value for the economy. If I had to choose, I'd rather see a vehicle created here than assembled here. To their credit Toyota, Honda and Nissan are doing some of their product creation in the US, mostly with some of their truck products. Hyundai's getting there. The Europeans are nowhere to be seen.
A quick rule of thumb: where was the physical crash testing done? In the US, or overseas? That will immediately tell you where most of the development was performed.
Assembly plants create a lot of factory jobs, but they don't create as much value as product creation does. This is especially true if the dies, fixtures, robots and tooling needed to make a car were imported. There just isn't that much economic value generated by pulling parts out of a bin and bolting them onto a car as it comes down the line. The highest value comes from designing, engineering and developing those parts in the first place.
If foreign automakers create products in the US, I'm not bothered at all that they repatriate the profits of those vehicles back to Japan or another country. It's still worth it because roughly 90% of all the value created by those products will stay in the US. Conversely, if that vehicle was mostly created in Japan or Korea or where ever, I don't consider it "American" even if it is assembled in the USA.
The same goes for a GM, Ford or Chrysler product that's assembled in Canada or Mexico. As long as the product creation took place in the US, the overwhelming amount of value generated by it will stay in the US. So for me, even if a vehicle like that is assembled north or south of the border, it's still American.
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