I am curious about the domestic content of various cars, so I stopped by a couple of car dealers last night to check out the domestic content labels. In 35 years of car buying, I never recall seeing one. But, sure enough, they were on most cars and light trucks on the lots. I wonder where they go when I test drive a car? Apparently they are not required on heavy duty trucks (like an F250).
The labels list the percentage of domestic content for a "Car Line" not for the particular car you are looking at. And it is not even for the cars from a particular plant. It is domestic content of the theoretical volume weighted average member of a "Car Line." This means that no matter what Camry you look at, no matter where it was actually built, the domestic content label is going to show the same percentage of domestic content. This is why Camrys built in Japan are still labeled as having 80% domestic content. The particular Camry built in Japan might have 0% domestic content, but when all Camrys (and Solaras) sold in the US are averaged together, the average domestic content is 80%. Likewise, Ford Mustangs all are claimed to have a 70% domestic content whether they are a V-6 manual, or a V-8 automatic. Clearly a V-6 Automatic Mustang, which has a German engine and a French transmission, has a much lower domestic content than a V-8 Automatic Mustang, which has US built engines and transmissions. Still they both have the same domestic content percentage shown on the label. The labels do show the country of origin for engines and transmissions and the country of assembly. I have no idea how they account for changes in demand for different version or when Toyota imports additional Camrys to meet higher than expected demand. I suppose the labels are based on projected volumes. I do not know if they are updated if reality doesn't conform to the projections.
I think calling items produced in the US or Canada as "domestic" is not sensible since NAFTA was implemented. Why is Mexico treated differently than Canada? Aren't we all one big happy free trade area? I also think it is not clear how a particular component is counted as "domestic." To be counted as a "domestic fender" does the steel have to come from the US or Canada or merely be stamped out in the US or Canada? Does an electronic component have to have components sourced in the US or Canada, or just have the final assembly done in the US or Canada?
My opinion is that he Domestic Content Labels are not particularly useful, and that they may actually be misleading. They do not reflect the domestic content of the actual car you are looking at, but rather they are the average domestic content for cars in that particular car line. Regardless of their usefulness, here is what the labels claim for various car lines:
Toyota 4Runner - 0% Toyota Siena - 80% Toyota Highlander - 5% Toyota Prius - 0% Toyota Matrix - 70% Toyota Corolla - 60% Toyota Tacoma - 65% Toyota Avalon - 75% Toyota Camry / Solara - 80% Scion xA, xB, xC - 0% Toyota Yaris - 0% Toyota Tundra (new version) - 75% Toyota RAV4 - 0% Ford Ranger - 80% Ford F150 - 90% Ford Mustang - 70% Ford Escape - 2007 - 80%, 2008 - 65% Ford Edge / Lincoln MXK - 95% Ford Five Hundred / Mercury Montego - 80% Ford Freestyle - 85% Ford Explorer / Mercury Mountaineer - 80% Ford Fusion / Mercury Milan / Lincoln MKZ - 50% Ford Crown Victoria / Mercury Grand Marquis / Lincoln Town Car - 90%
One thing I found interesting was the sparce number of Ford Fusions on the lots at Ford dealers. I stopped at two Ford dealers and there was a total of
6 Fusions on the lots. I assume this means they are selling really well.Ed