How can I make sure the next car I buy has the maximum possible percentage of U.S. “content” (parts, labor, and manufacturing overhead)?
There are two ready sources of information.[i]
The American Automobile Labeling Act
The first is the American Automobile Labeling Act (AALA).[ii] Since 1994, regulations under AALA have required that each automobile manufactured for initial sale in the U.S. bear a label disclosing where the car was assembled, the percentage of equipment that originated in the U.S. and Canada, and the country of origin of the engine and transmission.
The AALA is a vestige of the U.S.-Canadian Automobile Pact of 1965. Due to its origins under the Pact, the label states the combined U.S. and Canadian content, without separating the two. The AALA has some other limitations, such as listing a percentage of parts content not including the content added in the final assembly – so, the percentage figure understates the U.S. content of a car assembled in the U.S., and overstates the U.S. content of a car assembled in Mexico or some other country.
However, it has the advantage of stating the location of the car’s final assembly, where the car’s engine and transmission are manufactured, and up to two countries responsible for fifteen percent or more of the equipment content of the car. In short, there is a lot of information to be derived from these labels. And, you don’t have to go out to the dealer to see them; the National Highway Traffic Safety Administration publishes the information annually.
To obtain the NHTSA annual reports, go HERE.
The Kogod Made in America Auto Index
There is another listing that, in some ways, is more informative than the AALA list: American University's Kogod School of Business publishes a list developed by Associate Professor Frank DuBois, the “Kogod Made in America Auto Index.” Intended to provide a better read on the car’s total effect on the U.S. economy, the Index is based on the AALA reports, but includes some additional critiera – for example, where the profits accrue.[iii] The Index scores each car line, more than three hundred at this writing, with a possible maximum score of 100, on criteria including:
To visit the Kogod Made in America Auto Index, go HERE.
Where does that leave us?
A couple of points jump out of both the AALA and the Kogod lists:
So, in order of preference --
[i] This discussion is excerpted with permission from MIAA founder Jim Stuber’s book, What if Things Were Made in America Again (Current Affairs Press, 2017). © James A. Stuber 2017 all rights reserved.
[ii] 49 U.S.C. § 32304.
Regulations under the AALA are published at 49 CFR Part 583 – Automobile Parts Content Labeling,