December 04, 2008

What Is An American Car? Of a Foreign Chevy and an American Honda

At the Cato Institute blog, Alan Reynolds writes:

Before “loaning” billions more in taxpayer money to some very bad credit risks, simply because they are old American brands associated with Detroit, we might ask what distinguishes these companies from others.
The not-so-big three are certainly are no less global than, say, Honda.  General Motors gets 44% of its revenue from other countries and Ford gets 53%, according to Forbes (April 21).  A German company, Daimler-Benz, still owns a fifth of Chrysler, and a group of affluent private investors owns the rest.
An “American” brand tells you little about where all the parts in a car are made.  I was once at a dinner with Lee Iaccoca where I teased him about my Dodge Stealth, made in Japan by Mitsubishi.  Similarly, today’s Chevy Aveo is imported from Daewoo in South Korea.  Yet Hyundai has a plant in Alabama.
Cars.com found only four cars and six light trucks with a domestic content (meaning US or Canadian) above 75%.  That list includes the Toyota Tundra and Sienna and the Honda Odyssey.  Other Honda’s have a 60-70% domestic content, barely missing the cut.

Posted by Anupam Chander on December 4, 2008 at 09:21 AM | Permalink