auto

The most American-made cars of 2014

Frank DuBois, American University"Buy American" has been a staple of advertising campaigns for decades.

In the 1980s and 1990s, the exhortation to buy U.S.-made products, especially automobiles, reached a fever pitch as foreign competitors began to make goods that met or surpassed the quality of similar U.S. products.

Many Americans still want to purchase cars made in America. But the challenge of doing so has grown, thanks to the globalization of the economy.

Some cars are more "American-made" than others, says Frank DuBois, associate professor of international business at American University's Kogod School of Business in Washington, D.C.

Dubois developed Kogod's Made in America Automotive Index, which tries to identify the most American-made car models. He describes the findings of the 2014 index in the following interview.

Your study looks at the most American-made car models and ranks them. Can you define the criteria you use for determining a car is "American-made"?

We used a number of different factors to determine an American-made value for each car.

We first considered the self-reported data provided by carmakers to the National Highway Transportation and Safety Administration (NHTSA) in compliance with the American Automotive Labeling Act (AALA). This data gave us the number of models from each manufacturer sold in the U.S. market, and the percentage of U.S. and Canadian content each car contains.

The NHTSA data also provide information on the location of assembly of each car, and the country of origin of the engine and transmission. We used this data to construct an index weighted by such factors as headquarters location (where the profit goes), where the bulk of R&D (research and development) is done (in the headquartered country), and where the various assembly and manufacturing costs were incurred.

Using data from the Center for Automotive Research in Ann Arbor, Michigan, we estimated that on average, the sale of a vehicle generates revenues that compensate for the costs of manufacture, plus a residual that contributes to profits. In calculating the index, we use seven criteria based on publicly available data. These weighted criteria are used to determine how "American" cars sold in the U.S. actually are.

We used information from the AALA in the final factor (body, chassis and electrical components). Although this data does not disaggregate Canadian from U.S. content, it is still the best estimate available. Unlike other "Made in America" indices that may give 100 percent weight to the AALA data, we have attempted to dampen the AALA effect.

Which models ranked at the top of the listing?

The Ford F-Series and the Chevrolet Corvette tied for the top ranking, followed by several GM SUVs. The Dodge Avenger is tied for third with a number of other GM and Chrysler products.

In fact, the top 10 vehicles are U.S. or quasi-U.S. brands. Honda and Toyota have a number of models tied for the 12th position in contrast to the high ranking they would have if the AALA data were used as the only indicator of "localness."

Non-U.S.-headquartered brands may have high local content, according to AALA data, but much of their R&D is done offshore, and profits from auto sales in the U.S. are repatriated back to the automaker's home country.

People generally buy American in the belief that it will help the U.S. economy. Are those beliefs well-placed, or is the idea of buying American largely a myth that has little impact on U.S. economic growth?

Buying American has a huge impact on economic growth in the U.S., assuming U.S. consumers are not sacrificing price, quality and performance.

Auto manufacturing contributes as much as 4 percent to the U.S. GDP. Over 800,000 jobs depend on U.S. auto manufacturing.

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