National Content of Motor Vehicles

Abstract

CONFUSION about what is a domestic-made vehicle and what is a foreign-made one is widespread in the United States. Some vehicles manufactured in other countries are sold in the United States under names long associated with domestic products. Other vehicles are produced in the United States by foreign-owned companies and sold under names associated with imported products. Anecdotal accounts tend to emphasize the few brands of vehicles whose national origin is complex rather than the vast majority that are still domestic or foreign made. Underlying the blurred distinction between domestic and foreign vehicles is the restructuring of automotive manufacturing, especially the diffusion of what has been called lean production and the globalization of production through relocation stimulated by an international division of labor (Massey and Meegan 1982; Glasmeier and McCluskey 1988; Hoffman and Kaplinsky 1988; Rubenstein 1992). Sorting domestic from foreign vehicles is a geographical study, because the distinction derives from where the carmakers carry out different stages of production. This article provides a locational framework for understanding what an American automobile is. Although few are 100 percent domestic or foreign, the percentage of national origin of any vehicle sold in the United States can be determined. Historically, the distinction was clear. American cars were built in the United States by American-owned firms with American-made parts and American workers. Foreign vehicles were built in other countries in foreign-owned plants and imported ready for sale in the United States. Moreover, foreign cars looked different from American-made ones. Virtually all American automobiles exceeded five meters in length and contained engines with displacements of at least four liters and six or eight cylinders. Foreign automobiles were more than one meter shorter than the American models and contained four cylinders with less than two liters of displacement. In 1955 foreign vehicle manufacturers held only 1 percent of the car market in the United States, with Volkswagen accounting for most of the sales (Flink 1988). During the 1970s Japanese-owned companies overtook the Europeans as the leading exporters of cars to the United States, but the distinction between domestic and foreign vehicles remained well defined. Japanese companies exported small cars, and American-owned firms produced large models at factories in the United States. The visual distinction between domestic and foreign automobiles lessened during the 1980s as a result of changes in products sold by both American and foreign companies. Responding belatedly to consumer demands for fuel-efficient vehicles, American carmakers shortened their vehicles and introduced small models styled like those of their Japanese competitors. At the same time Japanese companies began to build large, luxurious cars that appealed to customers who wished to trade in the small models. More significant were changes in production that reduced the difference between American and foreign cars. American companies acquired minority shares of Asian firms and imported to the United States some models produced in Asia. In 1971 General Motors acquired a 34 percent interest in Isuzu, which subsequently rose to 42 percent and then fell to 38 percent. General Motors also bought 5 percent of Suzuki and 50 percent of Daewoo, a South Korean company. All three Asian firms supplied General Motors with small cars exported to the United States. Ford Motor Company purchased 25 percent of Toyo Kogyo, which was renamed Mazda, and 10 percent of Kia Motors Corporation, a South Korean firm of which Mazda owned 8 percent. Chrysler owned as much as 24 percent of Mitsubishi during the 1980s. As was the case with General Motors, both Ford and Chrysler sold cars in the United States built by Asian firms. Japanese firms opened some production facilities in North America. They established assembly plants in the United States in part because of fear that their American sales would be restricted by imposition of import quotas. …