Guess How Many Top ‘American-Made’ Cars Are Japanese Brands

2012 - 2014 Toyota Camry SE
The Toyota Camry, ranked #2 on's 2014 index of "American-made" cars. courtesy of Toyota

The Ford F-150 truck tops the list. But the rest of the top 10 is dominated by Honda and Toyota. just released its annual American-Made Index for cars, timed for Fourth of July week. At first glance, the list seems bizarre. Seven of the top 10 aren’t what your grandfather would think of when discussing the importance of “buying American” and yelling at you to put down your iPhone while he’s teaching you how to change the oil.

Instead, the list is dominated by Hondas and Toyotas: Numbers 2 through 6 are, respectively, the Toyota Camry, Honda Odyssey, Toyota Sienna, Toyota Tundra, and Toyota Avalon. The only American brands on the list are the Ford F-150 (#1), Chevrolet Corvette Stingray (#7), and Dodge SRT Viper (#10). And while Dodge is a traditional American brand, some would argue that it, too, is not really an American company because it’s part of the newly merged Fiat Chrysler, headquartered in London.

So what gives? Well, as explains, its index is derived partly from the “percentage of parts considered domestic under federal regulations” used in vehicles. To be considered, at least 75% of a vehicle’s parts must be domestic. Cars must also be assembled in the country, and of course be available for sale in the country, to make the cut.

Whether or not the logo on the vehicle is “American” or “foreign” doesn’t matter. Neither does the location of the automaker’s headquarters.

What the curious index brings to light is how complicated it is today for a consumer to buy truly “American-made” products of any kind—and cars in particular. What with outsourcing, globalization, and complex trade rules, we increasingly live in a world in which no single country can claim to be the sole producer of any product. A vehicle can be built with parts that originate in Mexico, be assembled in Canada, and still be considered an American product, with some legitimacy., which released its own series of “most American” vehicle lists in May (placed in categories such as “Most American Vans and Minivans”) recently tried its darnedest to explain the complexities of automakers’ global operations, including how things like assembly location, taxes, and sales affect the final product and the company’s bottom line. It’s not easy to follow, as this example shows:

When Toyota Motor Sales U.S.A. orders Tacoma pickups for U.S. distribution, it gets them from Toyota Motor Manufacturing de Baja California, a Mexican assembly plant southeast of San Diego. Toyota’s Mexican company keeps the money it receives from Toyota’s U.S. company, and the U.S. company gets its revenue by selling the trucks to franchised Toyota dealers, who then make their money from the trucks by selling them to consumers throughout the country.

If what you take away from such studies is the perception that American automobile manufacturing isn’t exactly booming of late, well, you’re not wrong. The index is a top 10, but guess what? Only 10 cars sold in the U.S. met the minimum parameters in order to be considered eligible. A total of 13 automobiles for the 2014 model year that are sold in the U.S. are built with at least three-quarters domestic-parts content, and three of those didn’t make the grade because this is the last year they’ll be sold, after the decision was made to discontinue them. As researchers stated, the number of vehicles that are “American-made” enough to be considered for the index has been falling year after year:

In the 2013 model year, 14 cars met that threshold. Twenty cars met the threshold in the 2012 model year, and 30 cars met it a year before that.

And if you’re looking to salvage some sort of pride in classic American auto brands from these lists, the Ford F-150 line is clearly your darling. It’s not only tops on lists from both and Edmunds, it has also been the best-selling vehicle in the U.S. for more than three decades.

TIME Innovation

Ford President Says Aluminum F-150 Is All Engines Go


Ford says the truck will ship on time this year, despite analyst concerns that manufacturing plant retooling will impact availability.

Investment firm Morgan Stanley is publicly fretting the truck might be delayed, but Ford says its new lightweight aluminum Ford F-150 pickup is on track and we’ll see it later this year.

“Everything is on schedule and everything is going as planned,” Ford Americas President Joe Hinrichs told reporters, speaking at Ford’s headquarters in Dearborn, Michigan (via Automotive News), adding that he was “very confident in this vehicle.” Morgan Stanley’s analyst Ravi Shanker had said earlier that Ford’s planned factory retooling, which it has to perform in order to produce the new pickup, would result in “slow changeover, with tight supply.”

Ford has noted the planned retooling would temporarily deplete its production by over 90,000 F-Series pickups, reducing company sales and profits. Furthermore, margins are expected to be lower on the new aluminum-bodied F-150. But Ford views all of that as necessary back-stepping to be first to market with a truck that uses a combination of “military-grade aluminum and high-strength steel,” and that’ll weigh roughly 700 pounds less than the version it’s replacing.

Note that Shanker doesn’t say the launch itself is in danger of being delayed, only that supply is going to be very tight in 2014 given manufacturing constraints. If supply is at a trickle, that could mean higher demand-driven dealer pricing, of course, culminating in a scenario where the truck’s debut looks more like a paper launch, and buyers wind up having to wait to lay hands on one until supply catches up.

TIME fuel efficiency

Even Cowboys Feel Pain at the Pump: Pickups Go Green


Macho stuff like toughness and torque is what sells trucks, right? Well, it turns out technology, comfort, and, yes, fuel economy, matter too -- even to construction workers.

In the world of pickup trucks, the advertising skews toward patriotic-themed, macho messaging focused on toughness and raw engine power. Buy this overpowered truck because it makes America great! Behind the bluster, though, are some less-muscular realities. Fuel economy, technology and comfort are what really count, even with those rugged cowboys and construction workers. That’s why pickup buyers and manufacturers are getting greener than a Boulder farmers’ market.

Like the rest of the auto industry, pickups are having a very good year, with the industry approaching unit sales of two million. One of the hotter new pickups this year is also one of the most fuel efficient. Fiat Chrysler Automobile’s 2014 model Ram 1500 EcoDiesel hit the road in February with a 3.0 liter, V-6 engine that sports a 28 mpg highway rating. FCA says the fuel rating is the best ever achieved by a full-size, half-ton pickup—the most popular version. “We are churning sales, “says Bob Lee, the head of Chrysler’s power train division. “In eight days [on the lot] they are gone. It’s moving incredibly fast.” That’s one reason Ram sales were up 17% in May, as Chrysler continues to gain share in the category.

GALLERY: Meet the new, greener pickup trucks

The company says that about half the buyers of new 1500s are opting for the EcoDiesel version. That’s an amazing stat given that Americans have never cottoned to diesels on anything other than heavy-duty trucks. But they do favor fuel efficiency with gasoline around $3.65 a gallon nationally. At Ford, the company reports that 42% of retail buyers are choosing F-150s with its 3.5 liter EcoBoost V-6, which gets 22 mpg. At General Motors, the company has added bi-fuel capability to all of its heavy-duty 2015 Chevrolet Silverado 2500HD and 3500HD, which allow customers to use compressed natural gas (CNG). Chevy says that will save them $2,000 a year in fuel costs for a vehicle driven 26,000 annually, based on current fuel prices. Ride on, you CNG cowboys.

Chrysler’s decision to develop a diesel for its smaller pickups started in 2005 when the company undertook an exercise to document where all the energy was going in the large 4.7 liter engine that powered many of its pickups. “The diesel showed up early and that was where you could have a big gain [in efficiency],” says Lee. The company also went to work on aerodynamics, and even the axel, which was sucking up 8% of the energy.

Diesels are more efficient than gas-powered cars but potentially dirtier, making the technology challenge a lot tougher. “The injection pressures are high, tolerances are tight and in the U.S., onboard diagnostics are extremely complicated,” says Lee. More importantly Chrysler’s aim was to pass muster with California’s strict regulations. “California wants to make sure the technology works.” It did.

Ford meanwhile, has been working on a technical challenge of its own. Later this year the company will introduce a new F-150 which, as newly named CEO Mark Fields modestly claims, “redefines the future of trucks” in that it will feature greater use of high-strength, military-grade, aluminum alloys in the body. That, along with more high-strength steel in the frame, allowed Ford to lower the vehicle weight by some 700 lbs. Shedding weight will improve fuel economy and acceleration, but it also allows the company to equip the pickup with a new, smaller 2.7-liter EcoBoost with auto Start-Stop. That also enhances fuel economy.

The F-150 is so important to Ford—it is one of the company’s iconic products and the industry’s best seller– that it can’t afford to produce anything that’s less than outstanding. The company says that more than 100 new patents are part of the F-150’s redesign. Ford has even overhauled the pickup’s badge, taking the hyphen out of F-150—now it’s F150—which the company says “adds to the message of efficiency.” Wonder if the hyphen is available as an option.

MONEY stocks

Recalls Aren’t General Motors’ Only Problem

2014 Chevrolet Cruze
Strong sales for the fuel-efficient Chevy Cruze helped drive General Motors sales in May. courtesy of General Motors

GM's strong May sales show consumers are looking beyond the automaker's recent quality issues. Unfortunately, the company faces other challenges.

So much for the specter of recalls.

In May, car buyers in the U.S. largely ignored the bad news surrounding General Motors and flocked to GM dealerships. In a month in which the nation’s largest automaker announced yet another series of recalls — bringing GM’s total number of recalled vehicles this year to more than 11 million — the automaker reported its best monthly sales since the global financial crisis struck in 2008.

GM said it delivered 284,694 vehicles in the U.S. last month, marking a 13 percent rise from May 2013′s tally. The better-than-expected results were driven in large part by a strong month for GM’s Chevrolet division, where sales jumped 14%, led by strong demand for the Chevy Cruze, which appeals to younger buyers. As for Buick, GM’s more upscale line saw its best May results in nearly a decade.

Analysts had been expecting good results, but not this good. For instance,, citing favorable credit conditions that were making it easier for consumers to buy and lease new cars, forecast that GM sales would reach nearly 270,000 in May.

This proved to be a good test for CEO Mary Barra. When General Motors named Barra the first female CEO of a major automaker late last year, the C-suite shift was supposed to herald “the new GM,” a reinvented titan with improving finances and better cars. Recently, though, it was another switch — a malfunctioning part in ignitions in some older-model vehicles — that dominated the headlines and kept reminding the public of the old GM.

Tuesday’s announcement indicates Barra & Co. have gotten consumers to look past the bad headlines.

But Barra faces other challenges:

The company is still losing market share.

Last year, GM’s share of total U.S. auto sales slipped to 16.9%, down from the 17.5% share it enjoyed in 2012. Meanwhile, rival Ford — which also had a good May, selling 254,084 vehicles, up 3% from a year ago — saw its share rise from 15.2% to 15.7%.

It’s not because GM isn’t trying.

As a result of its bankruptcy five years ago, GM shed some struggling brands, such as Hummer and Saturn. The move allowed GM to trim the number of platforms on which the company’s vehicles are built, and that in turn made it easier and cheaper to upgrade the firm’s entire line. Starting last year, GM redesigned 80% of its vehicles, resulting in cars and trucks that have “never been better in the history of the company,” says Kelley Blue Book senior analyst Karl Brauer.

Unfortunately, GM’s chief rival is about to go on an upgrade spree. Ford is set to launch the first aluminum-frame truck, which significantly improves fuel efficiency.

And critics say GM priced some newer models, such as the Cadillac ELR, too high to gain market share.

GM still lacks buzz.

There’s one area where GM is selling at a big discount: its stock.

F Chart

F data by YCharts

The company’s shares trade at a modest price/earnings ratio compared to its peers, and GM’s P/E ratio — unlike Ford’s — hasn’t really lifted recently.

GM PE Ratio (Forward) Chart

GM PE Ratio (Forward) data by YCharts

GM’s low valuation may seem appealing at first, but the stock’s P/E ratio has barely budged in the past year despite the company’s refreshed domestic vehicle lineup — a sign that investors may lack faith in the turnaround.

Right now, Europe is still emerging from recession. And while China offers opportunity, GM sales there pale in comparison to the domestic market. Barrack Yard Investors portfolio manager Marty LeClerc says that puts the onus for General Motors’ success squarely on the company’s new U.S. line.

If today’s numbers are any indication, investors can feel hopeful the U.S. line is making waves. Unless Ford’s upcoming new truck has consumers thinking GM is old again.


The Little Engine That Could Save You Big Money

BMW's sleek new i8 Sports Coupe hides a 3-cylinder engine under the hood. courtesy BMW GROUP

Automakers are being curiously quiet about the expanded use of an engine that’s lighter, more fuel efficient, and even safer than what drivers have come to expect under the hood. Why?

Because the type of engine in question runs on three cylinders, a breed that’s widely been considered “weird” and “wimpy.” The truth is that many of today’s 3-cylinder engines are neither.

The shift to smaller engines has been long in the making. By 2011, roughly half of new cars sold had 4-cylinder engines, up from around one-third in 2007. The average fuel efficiency for new cars has kept increasing, reaching over 25 mpg in recent months, and in order to hit the aggressive CAFE (corporate average fuel economy) goals established by the National Highway Traffic Safety Administration, vehicle mileage will have to keep inching upward.

One way automakers are trying to pump up fuel efficiency is by expanding the use of engines that have traditionally been associated with snowmobiles, mopeds, and lawn mowers. Manufacturers such as Ford, Nissan, and BMW have spent years developing vehicles with 3-cylinder engines, and now there are a handful of models with the teeny-tiny engines on the market. Among the options are the 2014 versions of the Ford Fiesta SE and the Mini Cooper, as well as the BMW i8, a sleek new hybrid sports car that’s expected to have a sticker price well over $100,000.

You probably haven’t heard much about the engines in these cars, however, which seems odd. Automakers love promoting every innovation and technological advancement. BMW, for instance, devotes ample website space to the i8′s design features that boost efficiency, including streamlined aerodynamics and the way “the passenger compartment is made of a carbon fibre composite, which proves to be an ingenious all-rounder: up to 50 % lighter than steel and approximately 30 % lighter than aluminum.” By contrast, very little attention is given to the fact that the gasoline engine under the hood is of the 3-cylinder variety. It’s buried low on one web page amid a barrage of jargon concerning the vehicle’s “BMW eDrive technology and a BMW TwinPower Turbo 1.5-litre, 3-cylinder petrol engine.”

As Automotive News recently explained, the 3-cylinder engine still has a “wimpy reputation,” generated by earlier, golf-cart-like 3-cylinder models. “Ford, BMW and other automakers are not drawing attention to the number of cylinders,” the Automotive News story noted. “That’s due in part to the reputation of three-cylinder engines. Instead, their message focuses on performance and fuel economy.”

The Mini Cooper and the Fiesta SE both get highway mpg ratings in the 40s, and they’re not underpowered, with 134 and 123 horsepower, respectively. The new Mini does 0-60 in 7.4 seconds, 2.3 seconds faster than its 4-cylinder-powered predecessor. (The new Mitsubishi Mirage and Smart fortwo, which also have 3-cylinder engines, have horsepower more in line with what most consumers would expect: 74 hp and 70 hp, respectively.) Three-cylinder engines are also lighter, which of course helps fuel efficiency, require fewer parts (which lowers manufacturing costs), and take up less space under the hood, which can improve safety because there’s less chance it will penetrate the interior in a front-end collision.

It’ll be up to cars like these, as well as high-tech 3-cylinder engines developed by Nissan, one of which weighs just 88 pounds and pumps an amazing 400 horsepower in the automaker’s batmobile-like ZEOD RC concept car, to convince consumers that a 3-cylinder engine is good for more than cutting the grass. Some auto insiders say that the assumptions most drivers make about these engines are outdated, and that the engine’s reputation is bound to change once word spread about the advances that have been made.

Jalopnik declared that 2014 will be the “year three-cylinder engines stop being weird,” and, presumably, wimpy. “It’s time for three cylinders,” Jalopnik’s Jason Torchinsky proclaimed. As for the skeptics and naysayers, who are stuck with the perception that 3-cylinders can’t adequately power anything bigger than a scooter? “Remind your wanna-be gearhead co-workers that most of these modern 3-cylinders have power pretty damn close to V8s in the mid-1970s.”

TIME Autos

Ford Recalls Nearly 700,000 Vehicles Over Airbag Problem

Ford Escape Airbag Recall
A row of 2014 Ford Escape vehicles sit on display at Uftring Ford in East Peoria, Illinois, on Nov. 30, 2013. Daniel Acker—Bloomberg/Getty Images

Faults discovered in Ford Escape and C-Max models could cause delayed deployment of airbags and increase risk of injury to passengers during accidents, but there have been no reported accidents or injuries related to the defects so far

Ford recalled nearly 700,000 vehicles Friday due to potential airbag malfunctions that could delay deployment of the safety feature.

Ford said the airbag defect, affecting nearly 692,500 2013-2014 Ford Escape and C-Max models, was traced back to a glitch in the airbag deployment software. Under “rollover circumstances,” the company told the New York Times, the glitch could increase the chance of injury to passengers.

Ford is also recalling 692,700 2013-2014 Escapes for an unrelated door latch problem that could prevent the latch from properly fastening into place, allowing the door to swing open while the vehicle is in motion.

There have been no reported accidents or injuries related to the Ford defects. The recalls come within weeks of Ford’s decision to boost funding for recall repairs by $400 million.

TIME Innovation

Ready or Not, Driverless Cars Are Coming

There may be an autobot in your driveway sooner than you think


Predictions about a future in which cars that will fly, float or drive themselves have been staples of everything from science fiction to pop culture to corporate PR for decades. But now it looks like driverless cars, at least, may finally be hitting the road in short order.

Google announced as early as 2010 that it logged more than 140,000 miles in a self-driving car as part of a secret project. “While this project is very much in the experimental stage, it provides a glimpse of what transportation might look like in the future thanks to advanced computer science,” said Sebastian Thrun, a Google Fellow working on the company’s self-driving cars. “And that future is very exciting.”

Since then, Google and auto manufacturers have made great strides in refining and testing driverless technology by integrating semi-autonomous features into cars already on the market and building legal and public acceptance of the concept. But as the technology develops, questions have been raised about what it would mean if autonomous vehicles start hitting the roads in larger numbers. How do “robot cars” determine the best ways to react to an impending collision? How will human drivers and robots interact when they have to share the road? It won’t be long until we begin finding answers to these questions and others.

TIME Companies

Ford CEO Could Escape Company With $300 Million in Stocks, Options

You could throw one heck of a Fiesta with that much cash

Ford CEO Alan Mulally will be sitting pretty when he retires from the helm of the Detroit-based motor company. CNNMoney reports the 68-year-old CEO has about 25.7 million combined shares and stock options, worth about $419 million at current market value.

After spending the necessary cash to exercise his options, Mulally would be left with about $300 million worth of Ford shares—a notably large fortune for the CEO of an industrial company.

Mulally, who is ranked among the 12 top-paid CEOs, helped keep the decades-old automaker afloat during the recession and has led the company to a strong comeback in the years following. Though he’s only been at the helm for eight years, Mulally is expected to retire this year. A company spokesperson told CNNMoney his compensation — Mulally reportedly makes about $44.2 million in salary and bonuses — is a reflection of his hard work.

“We believe strongly in aligning executive compensation with the company’s business performance and long-term shareholder value,” said Susan Krusel. “That’s why almost 90 percent of Alan’s compensation is performance based.”

Ford profits for Q1 of this year fell when compared to the same period last year, but the company beat revenue expectations.


TIME Companies

Ford Profits Fall But Revenue Beats Expectations

Revenue was slightly higher than analysts expected

Ford Motor Company reported $989 million in profit during the first quarter of 2014, a significant drop from the $1.61 billion the Detroit-based automaker saw during the same period last year. Revenue, however, was up in Q1.

MarketWatch reports the company raked in about $35.9 billion overall in the first quarter, slightly surpassing the $34.54 billion in revenue analysts expected.

The Detroit Free Press reports Ford has 23 global launches planned in 2014, one of the company’s most aggressive years in the past half-decade. The costs associated with those launches, as well as service costs related to older models, are likely related to Ford’s profit drop.


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