Yes, this article causes endless debates. My opinion: buy whatever car you want to with the money you earned. If you buy a Ford Fusion made in Mexico by exploited cheap labor you can say “the profits stay in the US.” But ask yourself, in that situation, who has those profits? Is it primarily in the hands of the executives (read: the 1%). If you buy a Toyota Camry and are told “all the profits go to Japan” ask yourself (and the questioner) “just how much of every $1 spent on a Camry goes to US workers / US executives / Toyota in Japan and how does that compare with the $1 spent on a Ford fusion made in Mexico?”
I have not come across any numbers in that amount of detail. Also, the profit margins on mass-produced midsize sedans like the Camry are relatively low to begin with. Given that, what precisely are “all the profits going to Japan?” I hear that argument in a Cadillac vs. Lexus debate. It does not make much sense to me in a Mexican assembled Ford Fusion vs. a Kentucky assembled Toyota Camry.
2 thoughts on “Most “American” cars index”
I think the most interesting line in that article is this one:
“Because profit margins are highest in the U.S., it is currently the most important market for most automakers.”
Why is it that Americans tend to pay higher margins for common goods like cars and cellular coverage than other nations?
It’s also interesting that foreign firms are more competitive even while building cars here in America. Why do domestic manufacturers have to go abroad to stay competitive when foreign firms don’t. At least we aren’t wasting taxpayer dollars to support a failing American legacy…
…This[sic] comment was left by me, Madison Doris, and in no way reflects the views of the CSUS Student Investment Fund. I was simply automatically logged on, and I apologize for any confusion.
To begin, I do not have data that proves profit margins are highest in the U.S. I do know that there were no Lexus (read: high margin) dealers in Japan until 2005 (http://en.wikipedia.org/wiki/Lexus). Initially, Toyota made those high margin Lexuses (Lexi?) just for status-seeking Americans (or any person focused on status for that matter). Prior to 2005, in Japan, there were just Toyota’s. I see good ‘ol American pretentiousness made its way to Japan in 2005! 🙂
The better question is when will we wise up to corporatism? When will we, as I have stated in my “Cadence of finance” presentation, reduce high margin exposure. Look for an upcoming post on recent strides I have made in that area.