Here's Why You Should Pay Attention To Where Your Car Is Built

Opinion / 24 Comments

Don't assume that every American car is built in America.

A few years ago, a friend asked me for a car recommendation for her father. The only caveat, it had to be an American car. I asked what her dad currently drove, and the answer shocked me: a Ford Fiesta. I pointed out that the Fiesta was in fact built in Mexico, but she seemed completely unfazed. Her dad didn't care where the car was built, so long as it came from an American company. So why do I bring up this story? Automotive tariffs are looming, and it is now more important than ever to pay attention to where your new car is built.


Upcoming Tariffs

If you've been paying any attention to the news, you've probably heard us mention the threat of automotive tariffs in the US. To put the issue simply, President Trump wants to impose taxes on imported cars and on foreign steel, which would increase the cost of building cars in the US. If automakers have to spend more to build each car and pay more taxes to import cars built abroad, they either have to charge more for them or take a financial loss. The loss of revenue may cause European automakers like BMW and Volvo to cut jobs in their US plants, and hold back on hiring new employees. This issue sounds like it will mostly affect foreign automakers, but this could not be further from the truth.


So-Called American Cars

Now we get back to the story that started this discussion, paying attention to where cars are built. Though some people may not know it, a majority of cars are built outside of their manufacturer's country of origin. In the case of "American" cars, some of the most iconic muscle cars on the market are not built in the US. Just take the Dodge Challenger, commonly referred to as one of the best American muscle cars. All Challenger models, including those badass Hellcat and Demon models, are actually built in Canada. Up until the current sixth generation, the Chevy Camaro was built in Canada as well.


Fortunately, cars like the Camaro, Challenger, and even the Mexican-built Fiesta are all somewhat safe from Trump's tariffs, because they are still built in North America. This doesn't mean GM and FCA are out of trouble, not by a long shot. GM builds two models in China – the Buick Envision and Cadillac CT6 plug-in hybrid. FCA builds the Jeep Renegade in Italy alongside the Fiat 500X, the Fiat 500L in Serbia, the Ram Promaster City in Turkey, and the Fiat 124 Spider is built by Mazda in Japan. Both of these American companies will actually be hurt if tariffs are imposed.


Foreign Investment In The US

Just as many American automakers build cars outside of the US, most foreign manufacturers have invested huge sums to build cars on American soil. In fact, the Toyota Camry commonly ranks as the one of the most American content cars on the market. In addition to Ford, GM, and FCA, automakers with US factories include: Honda, Toyota, Nissan, Subaru, Volkswagen, Hyundai, Kia, BMW, Mercedes, and Volvo. Just because your car says BMW or Toyota on it, doesn't mean it was actually built in Germany or Japan.


So how can you possibly tell where the car you are about to buy comes from? You could look it up, but who wants to go through all of that hassle? As it turns out, there is a very simple way to tell where a car was built based on its VIN. Just look at the first digit, and it will tell you exactly where the car was built. If the VIN starts with 1,4, or 5, it means the car was built in the United States. Canada is 2, Mexico is 3, Australia is 6, Brazil is 9, Japan is J, South Korea is K, Germany is W, the UK is S, France is V, Sweden is Y, and Italy is Z. There are others of course, but those are the important ones to note.


Why It Matters

Aside from the looming tariffs, there are plenty of reasons to pay attention to where your new car is built. Let's go back to my original story about the Ford Fiesta. My friend's father purchased a Ford product because he wanted to help out the US economy. Of course, some of the money he spent did exactly that. The dealership he bought it from made a profit, the salesperson got commission from the sale, the car will be serviced in America, and Ford profits from the purchase. However, since the car was built in Mexico, the Mexican economy also benefited greatly from this purchase.


While it may be patriotic to want to help out an American company like Ford, the multi-billion dollar automaker won't go home hungry if someone doesn't buy one of their cars. The factory workers who build the actual cars may not be in the same strong financial situation. Rather than blindly supporting an enormous corporation like Ford, it may be more wise to help the American economy by focusing on purchasing an American-built car. If, for example, my friend's father had purchased a Toyota Camry, all of those benefits to the US economy would still exist, but the money would eventually go to Toyota, a Japanese company.


The US dealership that sold the Camry would still make money, the American salesperson would still earn a commission, the car will still be serviced by American mechanics, but the profits will simply go on the books of Toyota. So the next time you are shopping for a new car, you may want to pay more attention to where it was actually built. It's all well and good to want to help out the American economy, but buying a car from an American brand is not the only way to support American workers.


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