America's Third Largest Domestic Automaker: Honda?

Honda Manufacturing of Indiana (Feb 2010)
If the Cars.com American-Made Index has done anything, it has raised the level of discussion on what defines an American car. That’s why it comes as only a mild surprise to find out that the third-largest domestic producer of automobiles in the U.S. is Honda. 

According to Automotive News, Honda beat out Toyota (the third-largest seller of vehicles in the U.S.) and Chrysler, which builds nearly all of its cars in North America. 

This year, Honda has built 555,734 vehicles in the U.S. and a total of 756,788 vehicles in North America. That bests the 468,440 vehicles that Chrysler produced in the U.S. and Toyota’s 430,535*. To be fair, both Toyota and Chrysler build more vehicles in North America than Honda, but both depend more on Canadian production than Honda does. 

Ford and General Motors still far surpass Honda in terms of U.S. production. 

We also found out today that Honda built more vehicles in the United States than in its home country of Japan through the second quarter, according to the Detroit News

Honda has more than 10 factories in the U.S., with two new plants under construction, and 14 R&D facilities. Honda employees more than 27,000 people in the U.S.; Toyota has 28,700 American employees. Honda was also the first Japanese automaker to build cars in the U.S., starting with the Accord back in 1982. 

So again, we ask: Can a foreign automaker that builds here count as domestic over a Detroit Three automaker that builds beyond our borders yet advertises its vehicles as American

*Toyota’s domestic production includes NUMMI-produced Tacomas and Corollas. More than 50,000 Toyota Camrys have been built by Subaru through a collaboration with Toyota for 2010. These vehicles were not included in Toyota’s own domestic production.

Comments 

Style

You're asking a question that has no answer except to provoke frivolous debate.

Might as well say that Nike and Apple and Dell and HP and John Deere and countless other companies are foreign by your definition of things.

sheth

whats is cars.com obsession with "proving", opps I mean asking about the issue of Honda/Toyota are more American than domestic brands? Ford builds cars in Europe but no one in Europe asks if Ford is more European than VW or BMW.

Belly

Some people just can't handle the truth

Igmar

Europeans do ask if Ford and/or Honda is becoming more European than VW (and others). I suspect you are expressing your patriotism and may not even know it.

Adam

It makes sense to me for cars.com to ask the question, as many people who buy American brands often do so only for the fact that it is an 'American' brand.

sheth

adam:

In 2010 when imports have about 54% of the market it doesnt make sense to say people buy cars "only" because they are American. I would say many more people buy imports only because they associate being foreign with being of superior quality. How else can you explain folks buying Toyotas with interiors that are as cheap as anything made by Chrysler.

Peppy

I know this debate will never cease, but in MY opinion, a domestic (American) automaker means that the company is based here (IE, Ford, GM, Chrysler even though like 30% or so if owned by a foreign car maker but Chrysler still has American roots). Honda and Toyota may build cars here, but they are a Japanese company. Its like if you're in Britian and you drive a Ford that was built in England, is that Ford a domestic or a foreign car? Its a foreign. Sure it might have the European touches and so on and so forth, but Ford is still an American car company.

J

Same type of question as of was there chicken first or eggs first? (Well, we know it was recently proven scientifically that chicken was first, but everyone gets the idea)

bfw

I think the point here is that what is typically known as a Japanese auto maker, makes most of its cars for north america in north america.
Dont read into it any further.

Zerf

Peppy, I agree with you.

I will also add how US based companies do affects more how our stock market does and the overall feel of the status of our economy.

Tiberius

I'm fine with the defining "American" as company based in the US. But if you apply that same metric a lot of perceived American brands suddenly become foreign. Example right off the top of my head is Budwieser, whose parent company is now based in Belgium. Going back to cars, technically, Honda of America is based here and they are in charge of the operations here. Does that make it American? What about Apple, which is based here but does most of it's manufacturng in China? I would argue that a company that sends jobs overseas is worse. At the end of the day, American jobs and economy are the keys. If a company contributes here then I see no problem labelling it as American. Made in America is just that, made here.

Belly

How else can you explain folks buying Toyotas with interiors that are as cheap as anything made by Chrysler.
-I knew Shet was full of it when he said the new Grand Cherokee's interior was good.

I would say many more people buy imports only because they associate being foreign with being of superior quality.
-But wait, wasn't it Shet that was always saying that hard plastics on the inside don't have any bearing on reliability?

All of the Japanese plants in the U.S. are non-union--they pay a lower wage/benefits package. Automakers utilize Mexican plants for an even more significant reduction. If people want more jobs brought back in to this country (like I do), the UAW needs to get realistic about wages, benefits and work rules. Nobody should have to work for free but some of the UAW's mandated starting wages is around $28/hour PLUS BENEFITS! That's over $56,000 a year for someone without higher education. I bet there's a lot of people in this country willing to work for a bit less to put food on the table in their American communities.

Neil

I don't think it's a very complicated question at all, just follow the money. Where does the profit go? It goes back to Japan, therefore they are not an American car company.

NOT THIS **** AGAIN!

How come Car.com never talks about the leakage from each of these 'domestic' cars? There is the ever present discussion of the domestics cost disadvantage due to pay and benefits but no discussion on how much money stays in the U.S. for a Malibu built in Kansas versus a U.S. assembled Accord. Some have said the leakage per car is over $5,000 per unit. Sell 100,000 cars of each and see $1 billion U.S. leave the country. What a great deal for us!

Ziggy

I would think that most people buy cars based on having a good prior experience with that brand...or stay away from some brands because of dissatisfaction from a previous ownership experience. This would explain the 54% being foreign vehicles.

Belly

Some have said the leakage per car is over $5,000 per unit.
-I would love to see a link with actual information on this.

sheth

"I would think that most people buy cars based on having a good prior experience with that brand...or stay away from some brands because of dissatisfaction from a previous ownership experience. This would explain the 54% being foreign vehicles."

Or it could be that there are 7 major foreign automakers in the US vs 3 domestic automakers. That may have something to do with the numbers.

And thats before you start counting Mazda, Suburu, Porsche, etc.

Until recently, the general public often associated cache and quality with foreign brands. The Toyota fiasco and improved products from Detroit has changed that somewhat. I think the younger generation will be much more willing to buy American than their parents.

NOT THIS **** AGAIN!

"The argument is not that GM is purely American company and Toyota/Honda is a purely foreign interloper. The world has become more complex than that. "Both are global companies," say Mohatarem. "The chief differences in that GM is much more integrated into the U.S. economy, while Toyota/Honda still depends more on imported components.There is more leakage from the United States." By leakage, he means that the dollars spent on a Toyota/Honda may benefit certain American constituencies but many dollars are taken back to Japan in form of profit. He estimates that the average cost of producing a vehicle is $22,500, so the difference between 50 percent and 75 percent American content is $5,625. The the average difference between the wealth created by a GM car and that generated by a Toyota/Honda car for the U.S. Economy. Multiply that by millions of cars per year, and it amounts to a colossal figure." William J. Holstein, Why GM Matters, (2009)

Source is a well researched book; not an internet blog full of BS.

Just a reminder that our post just posed a question folks. This story has been picked up by many major news outlets as being newsworthy, not just the auto folks like us. The Detroit News originally ran it. We just thought it tied in well with the oft debated American Made Index. The fact that you're debating is the point. We're not ruling on it either way.

Also those leakage figures make no sense when put next to our American Made Index which shows how many foreign automakers have more part content as well from the U.S.

If automakers are taking $5,000 in profit off a $22,500 car, EVERY car would be $22,500 and you'd see record profits for everyone.

But I don't think that's what the quote is saying. Again, please give a link so we can read in context.

NOT THIS **** AGAIN!

David,

I have posted my source. It is a book. What is your issue with it?

Not going down the wormhole of the "American Made Index."

I understand it is a book, hence I can't see the context of his numbers. They don't make sense and it looks like some explanation is missing or words were pasted incorrectly. I'd like to understand his point better. But if you're arguing GM closing would have a bigger impact on the U.S. economy than Toyota that's a different post entirely.

Again, I think you're taking our post out of context. We're not saying Honda's production in the U.S. is good or bad, just that it's surprising.

NOT THIS **** AGAIN!

I am glad they are here to be honest. No one can or should turn back the clock. The context was that the transplants do provide economic benefit to the economy but not at the rate or magnitude of the Big Three due to the structure of the businesses. Money siphons back to Japan off of every car sold. They are not here to make happiness for the United States. They are here to enrich Japan/Korea/Germany, etc.

I acknowledge the transplant jobs have better secondary economic benefits than U.S. service sector jobs. That said the benefit is not as great as the more fully U.S. integrated Big Three manufacturers.

I don't think we're arguing that fact at all. Just that it is a grey area that is hotly debated.

I still think the shift in Honda producing more cars in the U.S. than in Japan is significant though.

sheth

Dave:

The Japanese market is in a prolonged slump and the US market is far larger than the Japanese market. Couple that with the yen's value issues which have shifted production to the US and the Honda figures arent surprising at all. Keep in mind that Honda and Toyota are shifting more production here because its becoming less profitable to import, not because they care about creating American jobs. In addition, US assembly doesn't mean high US content. I believe the new Sorento has 40% domestic content even though it's made in the US. As this blog has shown before, when you rank the automakers including ALL models (not the ones cars.com cherry picks) you find that the domestics rank at the top of the list. The MDX is made in canada but you can rest assured most of its components do not come from Canada. Final assembly is one part of the process and frankly it's over hyped. Honda has always said they like to have their factories closest to the market that will consume their products and increasingly Honda is selling vehicles in the US that have no value in other markets so it makes sense that they are increasing their proportion of US made vehicles.

This accolade also focuses on US production only even though many Canadian built American cars have lots of US content. A Honda made in the US could conceivable be less American than a Chrysler or Chevy made in Canada.

I just want to know why so much emphasis is made here on the US impact of transplant vehicles. I assure you in Europe and Asia they don't spend a lot of time trying to equate foreign automakers' impact with domestic automaker impact. Ford and GM make plenty of cars in Europe but Europeans aren't ready to dump VW and MB simply because American automaker employ a few thousand workers on assembly lines.

sara

All I wanted to know is how many American jobs are tied to Honda and how many American jobs are tied to Ford and Chrysler. I live in Ohio so I always buy Honda as a way to support Ohio jobs. But I may be wrong to do this. unfortunately my other option IS Ford or Chrysler and I have no faith in ford cars (pick ups, yes) and Chrysler has yet to be researched by me for reliability. Ill have to think about this...

Devin Shadde

Hondas sold in America are about 75% made here in the U.S. Ford and GM outsource to Latin America and the slave-holding, savage, Chinese government for about 50% of their parts. All 3 companies are publicly owned. That means everyone around the world gets the profits. Honda, Toyota, and Nissan are no more Japanese than Ford and GM are American. I personally could care less if that means I'm hurting American CEOs by purchasing a Honda. They deserve to be hurt for relocating plants to China.

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