Whose Part Is It?—Measuring Domestic Content of Vehicles
Last Updated: 09/12/07
On This PageOctober, No. 243
Today, the distinction between “American” and “foreign” vehicles is not so clear: Some models produced by the American-owned Detroit Three carmakers have a smaller share of domestic parts than models produced by foreign-owned carmakers. This article examines how much domestic content goes into motor vehicles sold in the U.S.
The U.S. motor vehicle industry has
become more international and competitive
over the last few decades. Foreignowned
carmakers have a sizable presence
in the U.S. market through their sales
and production operations, and domestic
some vehicles for sale
in the U.S. market.
In the wake of increased
in the industry,
Ford Motor Co.,
and General Motors
Corp. (GM) are no
longer referred to
as the “Big Three”
because their market
share of U.S. vehicle
sales has been much
diminished; the U.S.
market share of these
dubbed the “Detroit
Three,” fell below
50% for the first
time in July 2007.
While these changes
have occurred, the
U.S. motor vehicle
parts industry has also become more
international: Domestic carmakers rely
more on imported parts, foreign carmakers
increasingly use parts that were
produced in the U.S., and foreign parts
companies have established production
operations in North America. In 2006,
about 25% of parts used in the U.S. were
imported, and approximately another
25% were produced by U.S.-based operations
of foreign parts makers.
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