Toyota runs an ad saying they have 11 US plants fed by X number of US suppliers, and so on and so forth. Yet, many Americans hold an image of the cars (not just parts) rolling into our ports. So, for Toyota, is all the assembly work done here nowadays? What about Honda and Nissan? (IIRC, I never hear Nissan talk about US plants.)
I know, I know…on the flip side, the so-called “American cars” have x% foreign parts, so who can even say what’s what anymore, right? To blur the lines further, Mazda = Ford, and Mitsubishi and Mercedez = Chrysler.
In short, is the term “imported car” virtually obsolete? …At least, when looking at those car manufacturers that hold a large share of the market?
The lines are getting increasingly blurred, but most cars made by foreign manufacturers are still made overseas.
BMW, for instance, manufactures the X5 and Z4 in the US - the 3, 5, 6, 7, and X3 are all made in Europe (or, in the case of some 3-series, South Africa). Same thing for Mercedes - all of their models but the SUVs are made in Germany.
Nissan has a plant in Smyrna, Tennessee, which celebrated the 25th anniversary of its groundbreaking earlier this year. Over 7 million vehicles have been built there. Initially, it produced only trucks, but now Altima and Maxima sedans are produced there as well.
I actually started this thread not too long ago. I have a link (from the Cato Institute) that makes the following claim:
It is also my understanding (i.e., no cite and I could be wrong) that new lines of cars begin being produced in Japan, and then move towards production in the states as they become more popular.
I don’t know about non-Japanese cars, but that’s something.
This is sort of a WAG since I don’t have any documented proof, but it seems to me that manufacturers will set up production of their highest volume models in the local market, to reduce the tariffs and shipping costs, while higher end premium models which sell for more profit but less volume are still made in their home countries. Toyota and Honda both make their entry level cars and SUVs here in NAFTA countries but generally do not make sporty or luxury cars here, same thing with the German automakers.
It’s not limited to NAFTA, I’m pretty sure Volkswagen makes and sells more cars in China now than they do anywhere else. BMW has been making the 3 and 5 series in Shengyang since 2004 and the first Chinese made BMW 3s are suppose to reach the US in 2006.
Hi FormerMarineGuy! Thanks for all the info, it was a great help. Did you get my last email?
Toyota builds the Camry, Sienna and Avalon in Georgetown, KY. The Toyota Motor Manufacturing Kentucky plant is the biggest Toyota plant outside Japan, and produces parts for other Toyota vehicles as well.
Or simply give it up as a bad job. If you believe “ultimate profits” corresponds to the nation the owning company is incorporated in, you have:
Dodge, Chrysler, Jeep - no, owned by DaimlerChrysler, incorporated in Germany.
Volvo, Jaguar, Land Rover, Aston Martin - yes, owned by Ford.
Mazda - maybe, controlling share owned by Ford.
Saab - yes, owned by GM.
Sounds pretty silly to believe “buy American” means you can get yourself a Jaguar, but not a Jeep. At the end of the day, I tend to believe that the term “imported car” IS virtually obsolete. Both in terms of where the vehicles are built and where the money goes, large car companies are truly multinational.
The profits of any company go into salaries, advertising, and expansion. If 100% of all cars to be sold to the US were built in the US, then the only salary money that was going out of the country would be for the gaggle of executives in Japan. The expansion money would be going to any new factories, which could be anywhere in the world (including the US.)
Advertising money will always essentially come right back into the market it was gotten from except when the initial move to the country began–at which point the money will be moving in-country not out. You can’t, generally, use the same advertising from one country to the other so it has to be locally done. And there’s no point in spending more on that than you think the advertising will buy you, nor less than the advertising could potentially get in local sales. So, essentially, advertising money is based on the expectations on the profits of the local market.
So looking at Dr. Love’s numbers, we’ll say that 80% of Japan-brand cars are manufactured in the US. Of all money made, X% will go back into the local advertising, Y% will go into expansion (new factories and such), and of the remainder about 20% will go back to Japan. So the US will get:
80% of (total - X%) plus the X%
and Japan gets
20% of (total - X%)
And Y% worth of the total goes to “somewhere.”
Or at least, so I would guess. (Of course, there is also R&D which would add some to the Japan side, but I’m not sure how expensive that is.)
It would have been #3, a reply to your reply. I think most of my questions had been answered (thanks again!), but I was fishing for some final comments. (I didn’t buy that car, BTW, since some further research told me the car had been repainted, but I am looking at another similar vehicle).
As for Toyota, the Corolla and Matrix are made in plants all across North America (including a plant just around the corner from me in Cambridge, Ontario).
The RAV4, 4Runner and Yaris are built exclusively in Japan, the Camry is built in Kentucky and Japan, and the Sienna is built in Indiana. I can’t seem to find where the Tacoma is built, and I might have missed some Toyotas that you can’t get in Canada.
As for where the profit goes, it goes to the stockholders. It might seem that all of Toyota’s stockholders live in Japan, but they’re all over the world. As SmackFu said, though, wages come out before the profit is calculated. If the wages are being earned in Ohio, Tennessee, or Indiana, then your purchase pays Americans who put your car or truck together before the stockholders get their cut.