Why Is The Heartland Of America So Hell Bent On Buying American Branded Vehicles?

The article hardly discovers anything new.

People make their decisions because they believe they'll feel better. The beliefs that cause them to make their decisions vary widely, but some of them might include:
- By buying "American" cars and other products, I support my neighbors and country
- I need my job in the US auto industry, so if I buy an "American" car, I help myself
- I hate foreigners and their products. They just take our jobs. (BTW, my name is Tonto Eaglewing...my family goes way back)
- Buy a "foreign" car and the profit goes back to their country. Buy an "American" car and the profit stays here.
- It's less expensive to buy and own an "American" car. Everyone knows that "foreign" cars are expensive, and they rip you off at the shop.
- I just like the way we design and make cars. It's what {I know | grew up with | see all around me | prefer, etc.)

For the record, I don't believe anyone is wrong for buying a US brand car. It's just not what *I* choose for myself.

Remember one thing and one thing only: It doesn't matter where the vehicle is manufactured or how supposedly
"American" it is based on parts, products, etc. All that matters is that the company you are purchasing this vehicle from is a foreign-based company and profits DO NOT go to the U.S., they go to that foreign entity.
So for me and my house, we are buying from an American car company...period.

wcbrown, your focus on "profit" is missing the lion's share of the cash flow and where it ends up! Take a looks at this scenario:

An Asian car manufacturer invests $100M in a car manufacturing plant in the US. The materials needed to build this plant are sourced from the US. They use American labor to build the facility instead of flying in workers from Asia. This is a realistic. $100M ends up staying in America.

Once the factory is operational, they build a car that retails for $23,000, wholesales for $20,000, and costs $17,000 to build. Lets break down those numbers:

(1) $17,000 cost to manufacture the car: Most of the raw materials like steel, paints, components, tires, etc., are sourced in the US. It's cheaper than flying or boating in parts from Asia. Almost all of this money goes to US suppliers, and US workers.

(2) $20,000 wholesale: The difference between the wholesale price, that being the price at which dealerships buy from the manufacturer ($20,000), and the cost to produce the vehicle ($17,000) is the manufacturer's profit. That works out to $3,000 in this example.

(3) $23,000 retail price: This is the price the customer pays. Actually, customers usually pay less that the retail sticker price, so lets say they pay only $21,500. The difference between the actual selling price ($21,500) and the wholesale price ($20,000, the price the dealer paid), is the dealer's profit. In this case, $1,500. Most of that goes to pay for running the US-based dealership, US property and business taxes, US employment taxes and insurance, and salaries to US employees. Even if the dealership is foreign owned, the lion's share of their *revenues* (income) stay in America, while a relatively tiny portion, that being the leftover profit after expenses are paid, goes to the dealership's owners.

As you can see, out of a car that has an MSRP of $23,000, a relatively tiny portion is profit that goes to the foreign manufacturer. In this example, it's around $3,000. The rest -- in this example being somewhere around $20,000 -- stays in America.

Just something to think about if we believe that a Toyota made in one of the States is just a syphon for the consumer's dollars back to Japan. Very not true! It's also something to think about when we consider "American" cars made in Canada or Mexico.

TheSteve, thanks for your reply. Clearly you know numbers and stats...appreciate it. However, all that matters to me is the support the American company that made the car. (GM, in my case)
Someone has to support the home team. We can all buy what we want, it's our money. I'm buying American.

I'd rather buy the foreign car made here in America and support the hard working American that built it than buy some american pos built in mexico or overseas and line the pockets of the fat greedy CEO that outsourced the jobs of building American cars to some foreign country.

85bmw745i: Just one example is the BMW Z3, a "German" car. Every production unit ever built came from the factory in Spartanburg, South Carolina, on American soil, using American workers, in a plant built by Americans. That's a lot of the vehicle's purchase price being invested in America and its people. Meanwhile, Ford is building "American" cars in their plant in Oakville, Ontario, Canada, using Canadian labor, in a facility built and staffed by Canadians. Most of the vehicles' price tag stays in Canada. Only the profit, a relatively tiny percentage, goes back to Ford in Michigan.

As for "greed", automakers create and sell vehicles on pretty thin margins (profits). Meanwhile, their competition is trying to attract their prospects by offering a more compelling value proposition (e.g., we might me a little more expensive, but we offer a lot more value for your dollar with X, Y, and Z). Lowering the vehicle's cost by having it manufactured where labor is cheaper (e.g., Mexico) isn't a matter of greed. It's a matter of long-term survivability. For example, if Audi dug in their heels on principle and chose to continue manufacturing their Q5s in Germany rather than moving production to a new plant in Mexico (it'll be online in mid 2016), how will they compete against BMW and Mercedes, who are willing to build where labor is cheaper, and can get their vehicle's delivered more quickly to a local market?

Why is the Chrysler Logo at the top of this article = it is now owned by a European based company? Because people STILL associate that company with the US.

People all over the world favor cars made in their country - example =- who else buys French cars in large numbers? Without Italy - there would be no Fiat. National "pride" is something you learn at a very early age.