Yesterday, American University's Kogod School of Business released its 2017 Made in America Auto Index, an interesting study that lets you see just how American your car is. The researchers wanted to know what percentage of your vehicle's value contributes to the overall well-being of the U.S. economy, and they considered aspects of vehicle manufacturing that are typically neglected.
The index used seven points derived from publicly available data to rank the 419 different automobiles.
- Profit Margin - If the automaker’s headquarters is in in the US, the model scores higher because the assumption is that (on average), 6% of a vehicle’s value is profit margin. So, if it is a U.S. automaker, the profits remain in the country.
- Labor - Considers where the car is assembled.
- R&D - If the model is a product of a US company, it scores higher. If it is the product of a foreign company but is assembled in the U.S. it still receives half of the available points.
- Inventory, Capital and other expenses.
- Engine - One of the most heavily weighted categories considers if the engine is produced in the US.
- Body, Chassis, and Electrical Components. This category makes up half of the vehicle’s score, which looks at the label. Since the American Automotive Labeling Act (AALA) in 1994, automakers are required to provide information on the label detailing the amount of U.S. and Canadian parts, the country of assembly, and the engine and transmission's country of origin. But the label is only half of the picture, because U.S. and Canadian parts are combined into one number, and automakers can round-up. So a part that is only 70% U.S./Canadian can be labeled 100% U.S./Canadian.
So, which cars are the most American? The Chevy Traverse, Buick Enclave, and GMC Acadia all tied for first. Each scored 85.5 on the index and is a GM product.
The Ford F150 was in second place with 85 points, followed by the Chevrolet Automatic Transmission Corvette with 82 points.
79 different vehicles scored a single point on the index and tied for dead last. As you can imagine, is was a slew of Toyotas, Hyundais, Kias, and Mazdas, as well hi-end sports cars like the Lamborghini, Maserati, Ferrari, and multiple models from Porsche.
Why is this information important? Because according to the university, the auto industry directly employed about 2.5 million workers in 2016. It sold 17.5 million vehicles, which accounted for approximately 3.5% of the U.S. GDP. Of the 17.5 million vehicles sold in the U.S. in 2016, about 65% were produced in the United States.
This is IEN Now with David Mantey.