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Domestic or import car? Automakers blur lines with production sites

Telling the difference between a domestic car and an import car used to be simple. American cars were built on U.S. soil, and foreign products were built overseas and shipped here.

Nowadays, you might buy a Ford Fusion that was built in Mexico, or a Toyota Tundra assembled in Texas.

“The line has become decidedly blurred,” said Jeremy Acevedo, an analyst with Edmunds.com.

Globalization has transformed auto production, and consumers’ shopping patterns have changed, too, Acevedo said. Buyers of domestic and import cars used to belong to much more distinct camps. “They were very different and weren’t crossing lines,” he said.

“Now you look at trade-in data and shoppers are freely moving between brands,” Acevedo said. “They’re really willing to try things out.”

What is foreign?

Some might argue the domestic-or-import question is really about where an automaker is based. By that definition, General Motors and Ford Motor Co. are clearly American companies, with headquarters in Michigan. While foreign automakers might make cars in the United States, and operate subsidiaries here, they are ultimately headquartered in other countries.

Chrysler is a more complicated example. American-born Chrysler, now called FCA USA, is part of the “Detroit Three,” and calls Auburn Hills, Mich., its “world headquarters.” But its parent company, FCA, for Fiat Chrysler Automobiles, is based in London, after Fiat’s post-merger shift from Italy.

Some car dealers have used a global approach for years, selling a collection of U.S. and foreign brands. Frank Downing Jr., president of Towne Automotive Group, sells domestics like Ford and Chrysler, as well as imports such as Mazda, BMW and Hyundai. Last year, he added the luxury brand Maserati to his lineup.

In 2012, domestic brands accounted for 53 percent of total sales at Towne. That rose to 58 percent in 2013, and to 59 percent last year. Downing said much of the increase was driven by rapid growth in crossovers, small SUVs and trucks, including the Jeep Cherokee and Ford Escape.

The Buffalo Niagara region still has its share of customers who will consider buying only a domestic brand, Downing said. That loyalty might stem from devotion to an American-based company – particularly one with a local factory – or because they have friends or family who work for Ford or GM, he said.

GM has two area plants, and Ford has one. All three plants are vital to the region’s manufacturing base, with generations of employees and their relatives living here.

Top national dealers

Erie and Niagara counties are home to 13 Chevrolet dealers and nine Ford-brand dealers. During some months, Paddock Chevrolet in Kenmore and Joe Basil Chevrolet in Depew have either led all Chevy dealers in the nation in sales or have come close to the top spot.

It is difficult to obtain a complete picture of domestic versus import auto sales in the Buffalo Niagara region. Chevrolet, a car-sales heavyweight, does not publicly disclose its sales figures. Excluding Chevy – which means taking out a huge number – domestic brands accounted for 46 percent of the region’s new-car sales in 2013, compared to 54 percent for import brands, according to Niagara Frontier Automobile Dealers Association data. Even if including Chevy sales tilted the balance the other way, the numbers reveal how import brands have made strong inroads over the years.

Downing said the globalization of auto production has changed the car-buying landscape, and has made the domestic-import issue less of a factor among consumers. “Most customers are more concerned with product and deal versus import or domestic,” he said.

Better products

West Herr Automotive Group – one of the nation’s largest auto dealer groups – also sees customers taking a more flexible approach in their shopping habits.

Scott Bieler, West Herr’s president, said the quality of all carmakers “has grown to be almost equal,” so customers often make their choices based on factors like styling features, fuel efficiency and purchase or lease offerings.

Automakers are putting increased attention on styling to separate their products from their competitors’ and increasing features in the base vehicle, Bieler said. “Across all makers, we see an increase in emphasis on detail and materials in interiors of the vehicles.”

Acevedo said many consumers have shifted from buying based on “incumbency,” or what was popular for so long, toward buying based on quality.

Korean brands, for instance, have made great strides in quality ratings in the past decade, leading to greater market share, he said. “When these brands have a huge lift in quality, the sales follow.”

According to Edmunds.com, domestic brands accounted for 45.5 percent of U.S. sales in 2014. Back in 1991, their share was 72 percent; that fell below 70 percent starting in 2000, and has stayed below 50 percent since 2008.

email: mglynn@buffnews.com