image: The Kogod Made in America Auto Index was assembled by Associate Professor Frank DuBois, an expert in global supply chain management, at American University's Kogod School of Business. view more
Credit: American University
WASHINGTON, D.C. (June 2, 2015) - The Buick Enclave, Cadillac CTS, Chevrolet Corvette, GMC Acadia, Chevrolet Traverse, and GMC Acadia Denali rank as the most American-made car models, according to the 2015 Kogod Made in America Automotive Index. Developed by Associate Professor Frank DuBois, an expert in global supply chain management, the index ranks 332 car models based on seven weighted data points.
The Kogod Made in America Auto Index provides a more accurate picture of the production process for the most popular vehicles on the road today. This research takes into account the ancillary impact of auto vehicle manufacturing on the U.S. economy and provides a better indication of the real economic impact that auto purchases have on the country based on where the vehicle is designed, assembled, and sold.
"This index is an alternative ranking system that provides the public with perhaps the most accurate reflection of the true country of origin of a car and the impact of its purchase on the U.S. economy," said DuBois. "Hopefully, it holds vehicle manufacturers accountable for the claims they make in marketing to U.S. consumers."
The Kogod Index incorporates American Automotive Labeling Act (AALA) data in its calculation and includes seven additional data points that are unaddressed by the AALA to create a more all-encompassing index. The Index criteria include:
- Profit Margin: Location of the automaker's global headquarters
- Labor: Location of assembly
- Research & Development: Location of R&D activities
- Engine and Transmission: Location of production
- Inventory, Capital and Other Expenses: Location of assembly
- Body, Interior, Chassis, Electrical, and Other: Location of production
- National Highway Traffic Safety Administration AALA "Domestic Content" Score
DuBois used publicly available data to develop the index, including data from the AALA, automakers' annual reports, and Form 10-K filings to the U.S. Securities and Exchange Commission. Automakers received up to 100 percentage points based on the scores each received in the seven categories noted above.
Due to multiple tie scores, six vehicles tied for the most American made receiving the same score (87.5) based on a 100 point scale. "The Kogod Index shows a larger percentage of vehicles are more "American made" this year compared to last year," said DuBois. "However, it is interesting to note that the top ranked vehicle from the 2014 Index the Ford F-Series Pickup fell to third place due to a 10 point change in its AALA score."
DuBois believes this rating process represents the most accurate "Made in America" index available because it acknowledges that every vehicle is likely to include non-American content, given that global supply chains are the operating reality of the automotive industry. Also, DuBois argues that the AALA is meant to help consumers "buy American," but the data it provides is limited in several ways. Since the 1994 passage of the AALA, automakers have been required to affix a label documenting the percentage of "American" content in each vehicle sold in the U.S. While this data is useful, it has some limitations. Most notably:
1. Canadian and U.S. content are not disaggregated.
2. Automakers can "round up" individual parts content from 70 to 100 percent to calculate domestic content.
3. Cars with very little U.S. content may be allowed to use labels from vehicles with higher U.S. content if they are part of the same carline.
The manufacture and sale of automobiles is a significant component of the U.S. economy. In 2014, the auto industry directly employed approximately 1.5 million workers and generated 16.7 million units in total vehicle sales, accounting for approximately 4 percent of the U.S. GDP. Of the 16.7 million vehicles sold in the U.S. in 2014, approximately 65 percent were produced in the United States.
To view the complete 2015 Kogod Made in America Auto Index, visit http://www.american.edu/kogod/autoindex/2015.cfm. See http://www.american.edu/kogod/autoindex/ to view and compare the 2014 and 2013 Kogod Made in America Auto Index.
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About American University
American University is a leader in global education, enrolling a diverse student body from throughout the United States and nearly 140 countries. Located in Washington, D.C., the university provides opportunities for academic excellence, public service, and internships in the nation's capital and around the world. The Kogod School of Business has been a leader in the D.C. business community for 60 years and is accredited by the Association to Advance Collegiate Schools of Business. AACSB accreditation represents the highest standard of achievement for a business school worldwide.