Percentage of Domestic Content - Auto Manufacturing

Link

Interesting find. This website lists the percent of domestic content for all vehicles sold in the US since 2005.
As a side note, the website considers US and Canada to be Domestic and all other contries to be Foriegn.

That is interesting. Check out what full size pickup has the highest US/Canada content: the Tundra. And the Toyota Sienna has more domestic content than anything but a Sable/Taurus.

But.

And this is important.

Profits go to the home country. Where the engineers and staff are paid who developed the vehicle. And it takes roughly $2B to develop a new product.

Yes, some of the money is cycled back into the plants whereever they are, but net profits go the the main home base. (where creditors normally take a signififcant chunk)

Eric

Alfa,
I do not mean this as a challange, I just really want to understand.

Question #1:
Were the Tundra and Sienna designed/developed in America?
For the Tundra and the Sienna Mini-van I am under the impression that they were designed in The States. Fueling this argument is the fact that neither vehicle is widely sold outside on North America.

I do agree that the profits go back to home country.

Question#2:
Which domestic company sells the most vehicles abroad?
My first guess is the Jeep Wrangler. I believe that it is sold on all continents? I ask this because it would seem that the strongest company would be the one that exports the most vehicles since these would send profit back to both the domestic production facilities as well as the domestic headquarters.

I work in the midst of this phenomenon.

Sure, the profits do go back to the home country. However, when there is profit, the company keeps making parts, cars, etc...and the plants in the US keep employing US workers.

That's just one way to look at it.

To me, It really doesn't matter if some fatcat in Detroit gets a load of profit, or a fatcat in Japan. I know for a fact that the Detroit guy isn't going to do me any favors (nor would I expect him to).

Clem

But.. Don't forget about the profits of the US and Canadian suppliers who made the parts..

(hint: Profits in automotive supplying are slim)

As much as we want to thing it's a cut and dry equation it is not. IIRC If parts that come in from say China and go to an assembler in the US. The subassembly is now considered to be American. The NAFTA % calculation may be more complicated than that..

jrw1621 wrote: Question#2: Which domestic company sells the most vehicles abroad? My first guess is the Jeep Wrangler. I believe that it is sold on all continents? I ask this because it would seem that the strongest company would be the one that exports the most vehicles since these would send profit back to both the domestic production facilities as well as the domestic headquarters.

I'm assuming that by "domestic company" you mean "nameplate". GM is all over the place, but under more localized names such as Opel, Vauxhall or Holden. The domestic that sells the most cars under its name has got to be Ford. Jeep is a niche market everywhere.

Or, are you speaking about the company that exports the most cars out of the US? That could very well be someone like Honda.

ignorant wrote: But.. Don't forget about the profits of the US and Canadian suppliers who made the parts.. (hint: Profits in automotive supplying are slim) As much as we want to thing it's a cut and dry equation it is not. IIRC If parts that come in from say China and go to an assembler in the US. The subassembly is now considered to be American. The NAFTA % calculation may be more complicated than that..

Just to show I have no real "side" in this whole thing: a LOT of the suppliers to the US-built foreigns (some call them "New Domestics." What a buzz word!) are also foreign owned companies doing business in the States. It really makes a LOT of sense when you look at it.

Clem

Don't the profits go to the shareholders?

stuart in mn wrote: Don't the profits go to the shareholders?

Well, I won't be able to address that question directly, but to even go there...It has to be a publicly owned company.

If you're referring to the US makers. I don't know how the profit tricles down to shareholders (or even IF it does) but it's gotta get past the private jet leases and exec bonuses first, I suppose.

Clem

And yes, I'm WAY out of my element talking about finance/economic stuff.

I always thought economics was a joke. In economics they seem to make up rules that look kinda like math.

Clem

A acquaintance of mine has an economics degree. He has managed to prove to me that this has nothing to do with understanding how money works at all.