Well-meaning patriots looking to boost the American economy with their next car purchase have an elusive task. Consider that the Chevrolet Equinox is from an American company, but is assembled in Ontario, Canada, has an engine made in China and a transmission from Japan. Meanwhile the Toyota Sienna hails from Japan, but has a West Virginia-built engine and transmission and is assembled in Indiana. Under federal regulations, the Chevy doesn't qualify as a "domestic vehicle" but the Toyota does.
Here we seek to demystify the impact of domestic versus foreign vehicles on the U.S. economy; we've compiled ten of the most patriotic domestic-brand vehicles built on American soil as defined by the percentage of American-made parts each one has. To see the vehicles, click on the “slide show” link below, or read on for more background.
There’s a stigma lingering over American vehicles; many consumers think that they don’t match the quality and reliability of some foreign makes. But that isn’t necessarily true anymore. “The domestics have indeed made remarkable progress, to the point at which all three [Chrysler, Ford and General Motors] can produce individual vehicle programs that are favorably comparable with Toyota and Honda,” says Joe Ivers, executive director, quality, at J.D. Power and Associates. He has been tracking vehicle quality since before the firm introduced its now popular Initial Quality Study (IQS) in 1987. “The main difference is the consistency of Toyota's and Honda's quality between models and between plants, and the country of final assembly.”
Consumer Reports analysts agree with Ivers that quality is on the upswing at domestic companies, though there’s still room for improvement. “American automakers have caught up in quality and reliability, but they are not equal [model by model] across the board,” says Jon Linkov, managing editor, autos, at Consumer Reports. The models that have been trailing in reliability are generally the older ones, he says.
Linkov attributes improvements in quality by American automakers mainly to the greater amount of platform sharing between models — where several vehicles share a common architecture and major components — the increased use of computer design and a greater willingness to quickly enact numerous running changes in the assembly process.
The auto industry as a whole has improved greatly over time, according to J.D. Power data; overall problem counts have been cut by 50 percent every seven to eight years. And while some European import brands have gone quite dramatically up and down in quality, the domestic brands have been improving gradually the entire time. “It’s been a pretty continuous thing,” Ivers says.
The historical image that Americans have formed of Japanese brands having higher quality is based primarily on the strength of two Japanese automakers, Honda and Toyota, Ivers says. The other Japanese automakers have not generally produced vehicles that meet the standards of these two stalwarts. But even Honda and Toyota have taken hits to reliability and quality in recent years with recalls of hundreds of thousands of vehicles previously unprecedented for these companies.
An American exodus
The Big Three, as Chrysler, Ford and GM are called by industry insiders, have been struggling with quality and reliability issues for decades. As a result, a large portion of otherwise patriotic Americans have looked elsewhere, to import brands.
Domestic automakers really started losing ground in the 1970s. And just over the past 20 years, from 1986 to 2006, the domestic brands’ share of U.S. sales has fallen from 75 percent to 55 percent, according to Ward’s data.
“We’re at a point where we’ve all grown up with Toyotas and Hondas in our driveway,” says Jon Osborn, research director for J.D. Power and Associates. Buyers in each age group carry a different image of domestic brands that takes a long time to fade, even if it’s no longer true, he says.
J.D. Power and Associates’ 2006 Avoider Study, which asked 43,000 recent car buyers questions about why they didn’t consider competing vehicles, illustrates Osborn’s point. Quality and reliability issues were frequently mentioned among those who avoided domestic brands, he says.
J.D. Power also found that loyalty to American automakers is strongest among older people. Among buyers of domestic-brand vehicles, 35 percent aged 18 to 35 said they didn’t buy a competing vehicle because it was an import brand, while the percentage rose to 52 percent for those aged 55 and older. Looking at buyers of imports, the trend is basically reversed, Osborn says.
Loyalty toward domestic brands remains by far the strongest in the large pickup segment. J.D. Power found that 48 percent of domestic pickup buyers overall avoided import-brand models because of their origin.
John Wolkonowicz, senior auto analyst with Global Insight, says that only about 40 percent of Americans are still staunchly loyal to the American car brands, and that percentage is falling. Furthermore, today’s youngest drivers are most concerned with how a vehicle makes them look and fits their needs. “The younger generation doesn’t really care where a product is made,” or where the company originates, Wolkonowicz says. “None of this bodes well for the domestic auto industry.”
Wolkonowicz says there’s a greater social pressure in parts of the country to buy import-brand vehicles. “Cars are a very emotional purchase — one that you have to defend to your friends,” he says. “It’s come to the point where it’s easier to buy a [Toyota] Camry than a [Ford] Fusion — regardless of which might be the better car,” he said.
© 2007 ForbesAutos.com