America is building cars... again!

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American pride is on full display as the Fourth of July approaches, and a presidential election is heating up — making U.S. auto manufacturing a central topic of discussion. Patriotism is at its lowest since the Wall Street Journal began measuring sentiment in 1998, yet a meaningful trend has emerged among American car buyers.

At a glance: According to the 2024 American-made rankings by Cars.com, nearly 50% of car shoppers would pay extra for American-made vehicles, almost double the rate from the previous year. One reason could be that Americans are more concerned with contributing to their local economies. American car brands also typically focus on larger vehicles like SUVs and pickup trucks, which are popular with U.S. drivers.

Highlights of the 2024 American-Made Index

1. Tesla: In 2023, Tesla held a dominant position in the top 10 rankings, driven by increased sales and a supply chain focused on the U.S. market. However, in 2024, other automakers made significant strides to compete on the American-made front. Tesla’s Model Y continued to lead the pack, but the competition grew fiercer.

2. Honda and Volkswagen: The Honda Passport, built in Lincoln, Alabama, secured the #2 spot, while the Volkswagen ID.4, assembled in Chattanooga, Tennessee, came in at #3. Honda also had the Odyssey and Ridgeline in the top ten, making the brand a standout in U.S. production.

3. Ford and GM: Surprisingly, Ford and General Motors, the two brands most often associated with the U.S., aren’t in the top five spots on Cars.com’s 2024 index. This could be due to their deeply entrenched global manufacturing footprint, with many parts sourced from outside the United States.

4. Regional shifts: Over half of the vehicles on the list were assembled in the South. Alabama is a key player, with 15 vehicles produced in various locations within the state. The shift is largely due to non-unionized labor, which accounts for about half of auto production in the United States.

Beyond inherent desire, could infrastructure and policy be driving Americans' preferences?

Jobs: Policies like the Inflation Reduction Act of 2022 under President Biden, provide tax credits and grants to companies that produce goods domestically. And local production means a local workforce.

• During President Biden’s tenure, employment in automotive increased by approximately 259,200 jobs through December 2023. But if we look solely at auto manufacturing jobs, the number is 127,800 jobs.

This is crucial because 56% of car shoppers say they are willing to pay more for a vehicle if it creates more U.S. jobs, and of those, 58% would spend at least 10% over their budget, according to Cars.com.

Economic nationalism: Characterized by tariffs, subsidies, and “Buy American” provisions, this strategy is often used to revive the U.S. manufacturing sector. President Trump made efforts to boost automotive manufacturing which included tariff threats and restrictions in the USMCA (NAFTA replacement). Consumers (and dealers) benefit from subsidies, but manufacturers are also incentivized to make their products on U.S. soil.

Self-reliance: The pandemic showed the value of local industries. It also exposed the risks of global supply chains. This was especially true for the U.S. reliance on foreign semiconductors. 

• Policymakers began to prioritize domestic production to ensure economic stability and security. 

• So have automakers. Mercedes has invested over $7 billion in its Alabama operation. LG Energy Solution (LGES) and Honda’s joint venture invested $4.4 billion in its EV battery production facility in Ohio.

The intrigue: With a bit of help from their own government Chinese automakers produce EVs at lower costs which could flood the American market with cheap options.

To counter this, President Biden increased Trump-era tariffs on Chinese vehicles and parts. These tariffs aim to protect domestic manufacturers from being undercut by cheaper imports. The U.S. is for once trying to get ahead of the game because we’ve seen this before. Steel and solar panels are just a few examples of Chinese overcapacity that reached the rest of the world.

Typically, consumer behavior often leans towards cost savings over anything else, but a new University of Chicago poll shows most Americans favor U.S.-made electric vehicles, even if they cost more than Chinese options. In fact, they were willing to pay up to $5,000 extra for the American EV.

Looking ahead: While Chinese cars stay offshore (for now), it’ll be interesting to see if this surge in ‘Buy-American’ continues. In a politically hot climate, consumers are valuing American-built cars more and dealers should consider leveraging that Made-in-America sticker to move more metal.

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CEO of Hyundai America: EVs, vehicle design, full self-driving, future of auto - Randy Parker, Chief Executive Officer of Hyundai Motor America discusses how he leads the fast-growing car brand in America, why the OEM is investing $1 billion in new dealerships, the future of FSD and fast charging, and much more. Give it a listen.

Made in America: Why automakers are building in the U.S. again - Jenni Newman, editor-in-chief at Cars.com, is an experienced journalist with three decades of experience, the last 16 years of which she has spent covering the automotive industry at Cars.com. In this episode, she discusses the 19th annual American Made Index, a list comparing the manufacturing and sales of new vehicles made in the U.S. Catch it here.

Listen to the episodes here, and subscribe to the CDG Podcast on Apple, Spotify, or wherever else you get your podcasts. And thank you to Lendbuzz, CDK Global, Lotlinx, and Uber for Business for making these episodes possible.

We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.

• Have a bird’s eye view of the car industry? Edmunds is looking for an account executive to join its team in California.

• Are you a salesperson at heart? OPENLANE has 10 roles for Market Sales Managers all over the country.

• Experience with financials? HGreg is looking for a senior controller at its Nissan dealerships in Florida.

Looking to hire? Add your roles today—it’s 100% free.

• Ford Motor Co. is updating its dealership floorplan assistance program for the first time in more than two years.

• Hyundai is launching two new electric cars in Europe, a low-cost EV and new IONIQ model.

• Shareholder backing for Toyota tab Chairman Akio Toyoda slid for a second straight year.

• Elon Musk announces Tesla stock option grants for 'exceptional performance.'

• BYD, CATL working on LFP batteries that could be fully recharged in 10 minutes.

Thanks for reading. Before you go…let us know your thoughts by voting in the poll below or replying to this email. See you for the next edition…

—Car Dealership Guy

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