Auto Producers In US

The author intends to distinguish sharp differences in national origin of
production and distribution of motor vehicles.
American Big Three producers (Chrysler, Ford and GM) and Japanese-owned
manufacturers (Honda, Nissan, Mazda, Mitsubishi, Subaru, Suzuki, Daihatsu and

Isuzu). By distinguishing b/w these differences, a vehicle may be classified as
domestic or foreign made. It provides a locational framework for understanding
what an American automobile is. Although few are 100% domestic or foreign, the
percentage of national origin of any vehicle sold in the U.S. can be determined.

Difference b/w domestic and foreign made Sorting domestic from foreign cars is a
geographical study because the distinction comes from where the carmakers carry
out different stages of production. The distinction was clear until the 1980\'s,
before this time American cars were built in the U.S. by American companies,
labor and parts. Foreign cars were built in foreign countries by foreign
companies, labor and parts. The appearance was also different. American cars
exceeded 5 meters in length and had engines w/ displacements of 4 liters and 6
or 8 cylinders. Foreign automobiles were over a meter shorter than American
models and contained 4 cylinder engines w/ only 2 liter displacements. In 1955,
foreign vehicle manufacturers only held 1% of the American car market- Europeans
accounting for most foreign sales. During 1970\'s, Japanese-owned companies
overtook the Europeans as leading exporters of cars to the U.S., but distinction
b/w foreign and American cars remained well defined. However, the appearances of
both foreign and domestic vehicles changed as American manufacturers responded
to demands for more fuel efficiency by shortening and decreasing the size
similar to their Japanese competitors. At the same time, Japanese companies
began to build larger, more luxurious cars to meet the demands of customers who
wished to trade in the original smaller models. Other changes that reduced the
difference b/w foreign and American cars included the interest that American
firms took in importing Asian produced models to the U.S. Also, Japanese firms
began opening production facilities in North America, predominantly in the U.S.,
in fear of having their American sales resticted by import Quotas. as domestic
or foreign, but so do the components that are used to build them. Components can
range from nuts and bolts to engines and transmissions. American and foreign
companies manufacture their own parts and also purchase them from outside
suppliers. Identifying national origin The easiest and most widely used
indicator of domestic or foreign production is calculated by the EPA under the

Corporate Average Fuel Economy regulations. According to these regulations, in
order for a vehicle to be domestic, it must have the combined fuel economy in
miles/gallon must exceed a specified average of 27.5 miles/gallon (1993). The
combined fuel economy of foreign vehicles must also exceed a specified average
(which was not given but is lower than that of domesic). The EPA also considers
a vehicle domestic if at least 75% of its parts come from the U.S. or Canada.

The EPA also considers Mexican content as domestic under 1993 NAFTA. Overall,
government efforts to classify all vehicles into 2 groups have failed because no
vehicle is entirely domestic or foreign made. Therefore, car companies and
models are placed on a continuum from relatively low to high percentages of
domestic content. Selling price All new automobiles sold in the U.S. have window
stickers showing the suggested retail price. The country where each model is
manufactured is required to be identified to inform the consumer. The retail
price of a motor vehicle includes direct and indirect costs. Direct costs that
are factored into the selling price are costs of production- res. and dev.,
purchase or production of components, the assembly of the components into the
finished vehicle, and transport costs from the assembly plant to the dealer.

These costs account for two-thirds of the sticker price, one half of this price
goes to buying parts for assembly. The cost of developing a new model is
measured in billions of dollars. Chrysler spent 1 billion dollars to develop
large models such as Dodge Intrepid, Eagle Vision, the New Yorker and a half
billion on the Neon. Ford spent 6 billion on developing the Contour and the

Mystique. GM spent 4 and a half on the Saturn. Before building a new model, a
company first conducts research to identify potential buyer groups and demands.

Next, individual parts must be designed and machines be built to make parts and
assemble vehicles. Ofcourse, experiments are run on the finished prototype to
test road use. Honda, Toyota and Nissan have design studios in southern Cal. and

Ann Harbor, Mich. The purpose of these studios is to