What Is An “American” Car?

January 7th, 2009 at 6:59pm

I get a lot of people asking me to define exactly what is an American car? Is it a vehicle made by one of the Detroit automakers, yet assembled in Canada, Mexico, or some other country? Or is it a vehicle made by a Japanese, European, or Korean company with assembly plants in America? Or something in between?  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 slack in my definition. Product creation is what really counts. That’s what generates the greatest value for the economy, much more than assembly of the vehicle. To their credit Toyota, Honda and Nissan are doing some of their product creation, at least with some of their truck products, in the US. Hyundai’s getting there.

Even if they repatriate the profits of those trucks back to Japan or Korea, it’s still worth having them do their product creation here. Roughly 90% of all the value created by creating 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.

2 Comments to “What Is An “American” Car?”

  1. John Says:

    John McElroy,

    Is there a standard definition for automotive “product creation” ?

    I found these two sites on Google. Is “product creation” all about design and planning?

    http://www.rolandberger.com/expertise/industries/automotive/product_creation/

    http://www.oliverwyman.com/ow/905.htm

  2. William R. Walling Says:

    John,
    “ANY vehicle manufactured in Canada, Mexico or the U.S. IS an American produced product, North American.”
    As ‘NAFTA’ is to be revised shortly North American ware will no longer denote ‘America’.
    That ‘dirty little secret’ EVERYONE is intentionally missing is the ‘inhumane’ conditions and wages of Mexican workers.
    FACT: Mexico IS the local, low cost country of choice by American business.
    BOTH the Canadian AND U.S. Governments have recently provided BILLIONS of dollars in public monies to two (2) historic Detroit manufacturers in reported support of countrymen.
    Mexico will NOT be able to do this as,
    1) No monies are available!
    2) They ALREADY support neighbouring Nations and their businesses (by way of VAST profits) permitting unfettered ‘courtesies’ at fellow countrymen and Mexico’s future expense.
    Disgraceful treatment of this neighbouring country is America’s shame!
    Humane AND National Security issues demand ‘ingratiating’ Nations boarding this country as job number one for America going forward.
    Regarding product creation, designing wares within an intended market (local) is accepted manufacturing policy these past decades.
    Such devised product created within a ‘target market’ works very well for ‘international’ brands today affording TOYOTA a GLOBAL #1 status within this depressed international economy.
    Will anyone within American media appreciate the significance of Mr. Akio Toyoda becoming CEO of TOYOTA in April 2009?
    Time will tell this tale …