Can All Cars Be Built in America?

The question of whether all cars can be built in America is an interesting one. The answer depends largely on your perspective, whether we are discussing cars sold by American auto companies, or whether we are considering the manufacturing locations of all cars sold in America.

Manufacturing Locales: An International Perspective

It is evident that not all cars sold in America are built in America, primarily because many consumers in different countries share similar values as Americans. For example, a desire for “Made in America” is not unique to American buyers. Similarly, a car bought in Korea or Germany would also benefit from domestic production, if the value of “Made in the home country” is a priority.

GM and Cost-Cutting Efforts

A more complex scenario arises when considering whether all cars sold by American auto companies, such as Chevrolet, can be built in America. General Motors (GM) assembles the Sierra/Silverado 1500 pickup trucks in Silao, Mexico. The primary reason given for this is cost-cutting, a strategy that GM has implemented to remain competitive in the market. GM is quick to point out that their reason for not producing in the USA is to cut costs, with the majority of parts also sourced from abroad. This trend is likely applicable to other major American auto manufacturers, such as Ford and Chrysler.

Consumer Preferences and Prices

The decision to manufacture cars domestically also hinges on consumer preferences and willingness to pay. Would American buyers be willing to pay a premium for a domestically manufactured car? For instance, would an American car buyer choose to pay $80,000 for a Silverado Crew Cab when a similarly equipped Toyota Tundra CrewMax costs only $40,000? The answer, of course, is not a definitive yes or no. While there is a niche market of buyers who prioritize domestic production, the majority of American buyers look for the best value, assuming all specifications are the same.

The Fringe and Mainstream Markets

It’s important to note that there is always a segment of customers willing to pay more for domestic production. However, for automakers to be profitable, they need a broader customer base to support their operations. Car companies like GM, which heavily rely on domestic production, cannot thrive with just this niche segment. They need a mainstream market to cover costs and achieve profitability. The current political climate, where subsidies for domestic production are viewed negatively by some, further complicates this issue.

Conclusion

The debate over whether all cars can be built in America revolves around economic, political, and consumer behavior factors. While cost-cutting and the desire for domestic production are valid concerns, the primary driver remains consumer demand and market competition. American auto manufacturers face a balance between domestic production and international sourcing to maintain competitiveness and profitability.