The Straight Shift with The Car Chick

What Does 'Made in America' Mean for Cars in 2025?

• LeeAnn Shattuck, The Car Chick: Your Car Buying and Repair Expert • Season 2 • Episode 111

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Summary

In this episode of The Straight Shift, The Car Chick® explores the complexities of what 'Made in America' means in the automotive industry today. She delves into the history of American cars, the evolution of car culture, and the impact of globalization on car manufacturing. The discussion highlights how the definition of American-made cars has changed over the years, especially with the rise of foreign manufacturers producing vehicles in the U.S. The Car Chick® emphasizes the importance of understanding where cars are made and the economic implications of car buying decisions, encouraging listeners to do their research before making a purchase.

 

Takeaways

  • The term 'Made in America' is complex and evolving.
  • The automobile was originally invented in Germany, not America.
  • American car culture reflects societal changes and historical events.
  • Cars have always symbolized freedom and personal identity in the U.S.
  • The globalization of car manufacturing complicates the definition of American-made.
  • The Kogod index provides a nuanced view of American car manufacturing.
  • Buying a car should align with personal values and financial considerations.
  • Foreign brands can have a significant positive impact on the American economy.
  • Understanding tariffs is crucial for informed car buying decisions.
  • Researching a car's origin can reveal its true American-ness.


Resources

Kogod Made In America Auto Index

https://kogod.american.edu/autoindex/2024

Cars.com Made In America Index

https://www.cars.com/american-made-index/


You can view a full list of resources and episode transcripts here.

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Copyright ©2024 Women’s Automotive Solutions Inc., dba The Car Chick. All rights reserved.

LeeAnn Shattuck (00:00)
Hey everyone and welcome back to The Straight Shift, the podcast where we steer clear of all the BS and drive straight into the real stories behind the automotive industry. With the 4th of July just around the corner, there's a lot of red, white and blue flying around out there. And that got me thinking, what the heck does made in America even mean anymore when it comes to cars? You'd think it's simple, right? Buy a Ford, support America. Buy a Toyota, support Japan.

Yeah, not so much. Buckle up, folks. Today, we are going to honor the Fourth of July and the United States of America by taking a brief stroll through the history of the American automobile. And we're going to talk about what made in America means, if anything, in 2025. So let's get into it.

Let's get one thing straight first. The automobile was not invented in America. Sorry, I know we credit Henry Ford for this, but that honor actually goes to Germany. In 1885, Karl Benz built what is widely regarded as the first true automobile. It was called the Benz Patent Motorwagen. Sounds way classier than it was. It had three wheels. It kind of looked like a giant bicycle with two big wheels in the back and one in the front.

But, it had a single cylinder four stroke internal combustion engine, which is what makes it a true automobile. Granted, it only had a top speed of 10 miles per hour, but that didn't stop Karl's wife Bertha from stealing it and taking it on a long distance trip without his permission, proving that it was actually practical as a means of transportation. I would argue that that makes her the first automotive influencer. You go girl. That said,

while America didn't invent the car, we did industrialize it. Henry Ford revolutionized the industry with the moving assembly line back in 1913. And this is what made cars available and affordable to the masses. The Model T became an icon and Detroit earned its title as the Motor City. Throughout the 20th century, American car culture has boomed. And it wasn't just about making cars. It was about making cars that

reflected what was going on in the current events and the culture and the political climate, how we as a country were feeling. So I want to take a few minutes and take a look at the most iconic American cars by decade. Many of these you'll know, some you might not. At the turn of the century, 1900s, 1910s, it was all about the Ford Model T. That was the car that put America on motorized wheels.

It was affordable. It was simple. It was even rugged to handle the lack of paved roads back then. And you could get it in any color you wanted, as long as it was black. Once we got into the roaring 1920s, the Model A replaced the Model T, but then we started seeing the other manufacturers come out. Cadillac released the V63 type. This was one of the first production cars that had a V8 engine.

Can you imagine a V8 engine in a car in the 1920s? It only made 83 horsepower, which is not much by today's standards, but back in the 20s, oh my God, it was the epitome of performance and prestige. It ushered in a new level of luxury to the American car market. And Cadillac still enjoys that reputation today. Cadillac equals American luxury.

Now we get into the 1930s and the Art Deco period, which I just love from an art and architecture standpoint.

Chrysler

came out with a car called the Airflow. It flopped sales-wise, but it was revolutionary in terms of its streamlined design, and that paved the way for modern aerodynamics in cars. Chrysler brought back the Airflow moniker in 2022 with an Airflow electric concept car.

Supposed to be released this year as a production vehicle, but that project got shelved due to all the wacky things going on in the EV market. I'm kind of glad because while yes, it was streamlined like all electric vehicles are, it just doesn't have enough flair in my opinion to really deserve that moniker. But I'm sure Chrysler is just counting on the fact that nobody's ever heard of the original Airflow from the 30s. So, and it wasn't the most spectacular

of the gorgeous, streamlined, very art deco cars of the 30s, but it was the first one to use that streamlined design because they were thinking both about the art, the artistry, as well as aerodynamics for the first time. It very cool. When you get into the 1940s, it was all about World War II and the Willys Jeep became the symbol

of America's military might, our toughness, our grit. And it became a symbol of our victory at the end of World War II. So suddenly Jeep becomes associated with America and everyone wanted one of these cool rugged vehicles that drove us to victory in Europe. The civilian version was called the CJ model and that is the grandfather of today's iconic Jeep Wrangler, which is still kind of the epitome of an American vehicle.

Getting into the 1950s, this was a decade that was marked by the post-World War II prosperity. It was a time of economic growth, suburban expansion, and a lot of very significant cultural shifts, especially in terms of women's roles and family. And the most iconic vehicle of the 50s was, of course, the 57 Chevy Bel Air. You had tail fins, had chrome, just style, massive size. This was

peak optimism on wheels in post-war America. This was also the decade when the beautiful and powerful Corvettes made their debut. So it was definitely a time of, hey, the war is over. We're prosperous now. Let's have fun. Going into the 60s, that same feeling carried over. And of course, you cannot think of the 60s without thinking about the original pony car, the Ford Mustang.

And the reason that this is one of the most iconic American cars of all time was because it was not only sporty, but it was actually affordable. And there were so many different options. So you could get a base model one that was more affordable, or you could splurge and get the more powerful, more expensive models. You could get a convertible, you could get a coupe, you could get a fastback. There was a Mustang pretty much for everyone. And it was just tied to freedom and youth. And I think it always will be. That's why today,

it is still one of the most valued classic cars and the most identifiable. They also started getting into product placement in the movies. We saw Mustangs make appearances in really popular films like James Bond's Goldfinger and of course the classic Bullitt. And this further boosted the popularity and cemented the Mustang's place in American pop culture.

In the 1970s, again, thanks to product placement, always looking to make money and do cool marketing, the Pontiac Firebird Trans Am was a huge hit because of the Smokey and the Bandit movie. I loved that movie. It was so much fun. Sally Field was amazing. And this car became this cultural icon of just badass, rebellious America. Running from the cops, bootlegging, doing all this crazy stuff. Wasn't necessarily the most responsible mentality, but...

You know, these were the sports cars that meant, you could do anything. Not everything they did in the movies, of course, because none of that was real, but it just started the whole muscle car era in the sixties and seventies. And that just symbolized our freedom and rebellion, our bad assery. When we get into the 1980s, here's where things start to get weird.

On many levels. And I'm a child of the eighties, seventies and eighties. So, you know, I get it. You know, I loved my hair bands, you know, I still love me, my AC/DC my Bon Jovi, Guns N' Roses. But in terms of, you know, style, I mean, think about what we wore in the eighties. I'd really rather not think about what we wore in the eighties. But the cars just kind of started to get boxy and blocky and they just lost their artistry. And before that, cars were not just cars, they were symbols.

Of innovation, of freedom, status. We were designing cars for emotion, not just utility. Once we started getting into the 80s, a lot of things shifted and a lot of that was due to the oil crisis in the mid to late 70s. Suddenly, you know, we've been relying on this dirt cheap gas, we'll have it forever. We're just not worried about it to...

Whoa, okay, we are not in control of everything. We are beholden to the Middle East for a lot of this. It really changed our consciousness about economics and being practical, being frugal, because there was no gas to put in these huge gas guzzling cars. So the shift began to move towards fuel economy and practicality being more important to the American car market than this fun and this extravagance.

So cars started to become more widgets and less art in most cases. But cars have always been more than just transportation in the US. They will always signify freedom and they will always be part of both our national and personal identities. I mean, they're the ultimate expression of personal style and that independence. And that's why my Perfect Car package works the way it does because I really want to match people to the car that is truly perfect for them right now.

For, number one, their budget, because finances are important. Number two, your lifestyle. It's got to do what you need it to do because a car is a tool, but you should also love it. It should suit your personality. It should be a reflection of you. So that's why that is a part of that package and why I feel it's so important. I just want everybody to love their cars. Maybe not quite as much as I do, but you should love your car, even if it's not your dream car. Over in Europe,

things are very different because their geography is just so much smaller, and trains and public transportation are the more dominant forms of people getting around. Not everybody has a car over there. There's no place to park it. Gas is a lot more expensive and everything is just more compact. So their train system and other public transportation is absolutely fantastic. Not so much here. The U.S. is just so, so big that

even if we expanded our trains, which I think would be a great idea, I would love to see bullet trains here, but you just can't reach every corner of the United States on public transportation - that's not realistic. So having your own vehicle just means you can go where you want, when you want. And that's just part of who we are as Americans. We just like doing our own thing. We value our independence, sometimes a little too much and we get ourselves in trouble.

But that's why we need and want our cars the way we do, more than anywhere else in the world. When I was growing up, just getting your driver's license was just something I anticipated so much. I made the appointment on my 16th birthday, I was getting my license, damn it, because that equaled freedom. As a teenager, mom and dad didn't have to chauffer you around anymore. You could go out with your friends. It just was this right of

passage into a more, you independent adult-ish life. And granted, that's when we started doing stupid things and getting into extra trouble. But You think about how many coming of age movies in America revolve around a kid getting their first car or taking your parents' car without them knowing it because they're out of town. You know, think Ferris Bueller's Day Off, Tom Cruise taking the Porsche out in Risky Business. You know, come on. How many of us have done that? I am guilty.

You know, we had drive ins, drive in movie theaters, road trips. We have car clubs. Cruising Main Street was the thing to do. Where else were you going to make out as a teenager if you didn't have a car? It was so much more difficult. You that iconic scene in American Graffiti where they're cruising and they're street racing. Even Disney's Pixar Cars hit all the nostalgic nerves for us grownups that watched and loved that movie. Cars are just woven into the American culture. They're part of our rituals.

They're a huge important part of our economy and even our romances. And I think that's why Made in America feels so personal to us, especially when it comes to cars. It's not just about American jobs or the economy or trade balances. It's about who we are or at least who we think we are. So when did things start getting so globally complicated? When production started leaving the U.S.

As I said, so many things drastically changed in our economy in the late 70s because of the oil crisis. And that's also when we started to see manufacturing, outsourcing of parts going overseas. And that accelerated like crazy through the 80s and 90s. The American automakers just began shifting parts of their production to other countries. Why? Get out your shocked face... to cut costs.

Labor was a lot cheaper abroad than it was here. Environmental and safety regulations were so much less strict and still are in other countries. And we were making a lot more global trade agreements that made it easier and more profitable to build parts of cars or even the entire car in countries like Mexico or even China, Korea, all over the world, and then ship them back to the U.S. versus just building them here. It's kind of a crazy time.

And it's not just the cars, like the wiring harnesses, your transmissions, even entire engines being sourced internationally and then brought back to the U.S. The big three - GM, Ford, Chrysler, they leaned very heavily into the strategy to stay competitive with the leaner, more efficient Japanese automakers like Honda and Toyota, who were literally eating their market share of lunch alive in terms of the quality, reliability and price.

They came in and were very quickly able to bring those econo boxes that we wanted all of a sudden after the gas crisis. And they were able to do it very, very cheaply because they didn't have labor unions like the Michigan Big Three did. And they have more streamlined manufacturing processes. It's just a completely different approach to manufacturing than the U.S. had.

We're still seeing that challenge of the U.S. automakers trying to make the shifts necessary to be more competitive with the Japanese brands. And then you get into the 90s and the North American Free Trade Agreement came into play. And now all of a sudden, the U.S., Canada and Mexico had cross-border supply chains free of tariffs. It just made things so much easier. And everybody put all their eggs into that basket in terms of their manufacturing strategy. So cars

we're no longer American or Japanese or German. They were global jigsaw puzzles. And that's even more true today. You can't even look at who owns a brand anymore to know if it's truly American. Ford and GM, yes, are still headquartered in Motor City. But Stellantis which is the parent company that owns

Chrysler, Jeep, Dodge, Ram is technically based in the Netherlands. Yeah, that happened. They also own Alfa Romeo, Fiat, Citroen, Peugeot, Lancia, Opel, Vauxhall, Maserati, probably a couple others that I can't even think of off the top of my head. It is truly a global company. Now, even if you consider your Toyota, Honda, Hyundai, Kia, BMW, Mercedes, these are foreign brands, right?

Yes, but they have massive manufacturing facilities in places like Alabama, South Carolina, Georgia, Ohio, Kentucky, Indiana. They are building cars in the United States using American workers. So some of these quote foreign cars are actually more American than some of the ones coming out of the Big Three.

The truth is no one car is made exclusively in any one country. That's because no one country can produce every single crazy part that goes into a car these days. They're so much more complicated. And all of that technology requires certain raw materials that are only available in certain places in the world. So, you know, that's why

our trade relationship with China is so complicated because they have some of these rare metals, rare earths that you just don't have as much anywhere else. And, you know, the lack of environmental regulations to just take as much of it as you want. So that's neither here nor there. It just makes it more complicated and is the reason why no vehicle is exclusively made in any one country. And it makes it more difficult to figure out what made in America even means.

Let's look at how we actually can measure how American a car is given these complexities. Fortunately, there's this great thing called the American Made Auto Index. There's actually a couple of them floating around. Cars.com has one that's pretty basic, and the Kogod Made in America Auto Index that has come out of the business school at American University. That's really amazing. It digs so much deeper than just the final assembly of the vehicle or where the major parts are made.

In addition to final assembly, it includes labor costs, where the engine and transmission are sourced, the profit margin distribution, even where research and development has happened. Basically, it asks, where does the money go and who gets paid?

So the index gives a percentage score to each make and model vehicle, even down to the trim levels. So a given model might be 78 % American or maybe only 42 % American, depending on where the major components come from. And most importantly, who ultimately financially benefits from the sale? They follow the money.

It's just much more nuanced than anything else and definitely more accurate than just slapping an American flag on the website or the brochure, which the manufacturers have been doing lately. But according to Kogod, the Honda Passport is built in Alabama and it often ranks higher as more American than a lot of your Chevy's or your Ford's. And yes, the Toyota Camry consistently ranks as one of the most American made cars because it comes out of their plant in Kentucky.

So just think on that for a minute. Let's look at what the most American cars are right now. The 2024 index is what we're using. The 25 one won't come out until a little later this year. So much is going to be changing with this over the next couple of years that

they're probably going to have to start from scratch. But the number one most American car on the 24 index is the Tesla Model 3 Performance, specifically the performance version. And that's frequently true with a lot of different cars. The high performance versions, whether they're electric or gas powered, typically are more made in America because that's where they're sold. They don't have V8 engines in a lot of Europe and Japan unless you get into the really high end exotics.

Fuel economy is key over there. So we like our performance here in America. It's a luxury that we can generally afford. So that's why you'll see performance versions more made in the US than they would be overseas. The Model Y and the Cybertruck, god, I really hate to say that, ranked two and three. But interestingly, both of those vehicles have stopped production temporarily.

Partly due to the plummeting sales of the Cybertruck, but also because Tesla is shifting that factory in Texas over to make more robo-taxis now that they are trying to go full bore into that. So we'll probably see that resume for private use fairly soon, but right now they're not even making them. So that'll be interesting to see how the 2025 index shakes out.

Other top 10 most American models include the Ford Mustang GT, again, the performance model, and the Jeep Wrangler Rubicon and Sahara models. Again, higher trim levels that target the American car buyer. You also have your GMC Canyon and Chevy Colorado smaller pickup trucks, and you've got the Honda Passport and the Honda Odyssey that are made in Alabama. And interestingly enough, the Volkswagen ID.4 electric vehicle is a very American car.

Because the Coggin index goes so much deeper than just the manufacturing, it's a great indicator of what's truly American, but it does not accurately reflect how the tariffs are being imposed because that is more a representation of truly where things are made and how they cross the borders.

It just gets into a little bit more of a gray area. If you really want to know more about the tariff impact on any given cars, best thing to do on that is to make sure that you are subscribed to my Straight Shift Newsletter that comes out the two weeks opposite of the podcast. So you get two podcasts and two newsletters a month, and it gives you exclusive access to the Tariff Tracker that I developed using a lot of different industry data, along with the tariff agreements, which are changing daily. And I'm

working to keep it up to date, but I keep it simple and give you a high, medium and low tariff impact for every given make and model down in many cases to the trim level, so that you can get an idea if you're shopping for one of these cars, how much extra you might be paying for it given the tariff impact. I know I said I was going to talk about tariffs on this podcast anymore, but it just ties so into the made in America concept because the point of it all

is to try and force more manufacturing back to the United States. We'll see how that really works out. But we really need to look at does buying American actually help Americans? If your goal is to support American jobs, then yeah, it's probably worth looking into where that car has its final assembly and maybe where many of its parts are manufactured because those jobs matter.

But you also have to follow the money. Even a car that was built in Kentucky or Indiana. If those companies' profits are going mostly to a foreign country, does that matter to you? Is that important? It's less impact to the U.S. economy. On the flip side, dealerships are local businesses, regardless of their brand. So whether you buy that Hyundai or that German car, whatever, your money is still paying

the guy down the street or the gal down the street who works in sales or finance or is a mechanic in their service shop. There's also a supply chain ripple effect. A car built at a plant in Alabama not only supports the workers on that assembly line and the staff in the plant, but also local suppliers, maintenance contractors, your cafeteria and janitorial staff, your regional and local logistics companies.

Even the restaurants around the plant where everybody eats, it has an impact on that local economy. So, foreign cars built domestically can still have a very positive impact on America. Now, what about those union jobs? The United Auto Workers Union is, of course, very strong in Michigan in the big three plants.

But if you notice, most of the foreign automakers that are building plants in the U S are building them in states that are non-union, like here in South Carolina, like in Alabama. So, you none of these Japanese, Korean and German brands are being built in union states for a reason.

And it's a whole nother political can of worms that I'm just not gonna get into. But again, these are things that if made in America is really important to you, it just takes a lot of homework to figure out that puzzle. So in that vein, what can you do as a car buyer with all of these variables, if made in America is important to you?

First, you have to ask yourself what is important to you about that made in America. If it's just about driving an American brand, go out and buy a Ford, a Chevy... any of the GM cars, any of your Stellantis cars. You'll drive one that has an American badge on it. It may or may not be made in America, but it just depends on what your priority is. If it's just a perception thing, I totally get it. But if some of the economics is important to you, then

research where is that final assembly of the car? Where did the majority of the parts themselves come from. And to do that, you can check the window sticker. There is a parts contents label that is a part of the window sticker. You can also look at my tariff tracker because I consolidated a lot of that down, you

the more American parts it has, the lower the tariff impact. But if you really care about the bigger picture of buying American and truly supporting the American economy and jobs, check out that Kogod index or the cars.com index. I'm going to put links to those in the description below. And look beyond the brand. Just because it says Ford or it says GM doesn't mean it's any more American than that Toyota or that Hyundai or that Kia,

depending on where it's made.

Buy smart. Focus on what works for you, what's important to you. Reliability. Safety. Make sure the car fits your needs and your budget and make sure you would like driving it because there's no point in driving something just because it has a certain label on it. If it doesn't work for you. Patriotism is great, but there are limits. You've got to make a smart financial decision for yourself.

And supporting the American economy is much more complicated than it used to be. But the good thing is it does give you more choices when you're shopping for cars. So this 4th July, while you're grilling those burgers and waving the sparklers and hopefully being very responsible if you're setting off fireworks, remember this... That car in your driveway is more global than probably anything else that you have purchased in your life. More so than your clothes, more than your furniture, more than anything that's in your Amazon shopping cart.

And that's not necessarily a bad thing. It's just more complicated and it's getting more complicated with the ever-changing tariff situation. Just don't fall for the marketing hype. The manufacturers and the dealers are already starting to splay Made in America or Most American Brands or No Tariffs on Our Lot on their websites and their commercials. But don't believe it without doing your own homework. You know how good the automakers and the dealers are at marketing hype.

So do your own homework, check out the Tariff Tracker. That'll give you an idea of how it might directly impact your wallet. And if you want to navigate this tangled web of car buying with confidence, you can check out my online car buying course, the No BS Guide to Buying a Car - Your Inside Track to Getting the Best Deal - where I break down the entire process so that you can make informed decisions, avoid all the nonsense of the dealership, cut through the BS, and drive away in a car that makes you happy.

No matter where it was built. So happy Independence Day, everyone. And remember, buying a car should not require a PhD in international trade. So if you don't want to deal with it all yourself, you can always look into my full service packages on my website, TheCarChick.com Have a safe and wonderful 4th July, everyone. I'm out of here.