Detroit auto production falls behind international rivals for first time

Author

Colin Velez
July 10, 2024

For the first time in history, factories operated by overseas automakers outproduced Detroit manufacturers in the U.S.

Why this matters: This shift was inevitable, as it has been developing for decades. While international brands have increased their U.S. production by about 85% over the last 25 years, manufacturing volume at the Detroit-Three has declined almost 50%, according to a joint report by Autos Drive America and the American International Dealers Association. While American firms still defend a lion’s share of the U.S. market, this lead is hardly guaranteed to last in the coming years.

How do Detroit automakers stack up?

  • Overseas automakers, such as Toyota and Volkswagen, produced 4.9 million vehicles in the U.S. over the course of last year, 500,000 more than in 2022. Comparatively, General Motors, Ford and Stellantis manufactured 4.6 million, down about 150,000 units from the prior year.

  • Production shifted in two directions, down for the Detroit-Three and up for the rest of the industry. However, Ford, GM and Stellantis would still trail their competitors by another 150,000 units even if their production volume remained constant between the two years.

  • Not included in this total are Tesla and Rivian. These two companies built just over 750,000 fully-electric vehicles in 2023. When combining these numbers into overall production, Detroit-Three brands have actually been out-produced for the last five years.

Why is this happening?

  • On the one hand, international automakers have made aggressive expansions in the U.S., opening new factories and increasing production. Federal credits and tariffs have also incentivized domestic production, especially after the passage of the Biden Administration’s Inflation Reduction Act in 2022.

  • Meanwhile, Detroit manufacturers have struggled to accommodate shifts in consumer preference. While their production numbers have been declining for a long time, the weeks-long United Auto Workers strike last year likely contributed to the sudden dip compared to 2022.

Additional context: There are some important nuances to consider. Ford is still, by far, the U.S.’s biggest domestic automobile manufacturer, building nearly 2 million vehicles between 2022 and 2023 alone. Meanwhile, Stellantis has been severely hampered by challenges in the North American market, where its sales have been declining for several years.

Bottom line: Detroit automakers are facing undeniably steep competition from international brands in the U.S. While this means more rivalry between franchises, it also means companies will have to try harder to win the loyalty of their consumers, a fact that translates into better products and higher-quality service.

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