The Most American Cars Are Shockingly Japanese

Cars.com American-Made Index

• Cars.com creates an American-Made index each year. The methodology is:

• The winner may not surprise you, but the rest of the list might.

The Most American Car is…

• F-150 Regains its crown in Cars.com most recent ranking

• Rebounding housing market has spurred pickup sales• Parts list – 75% Sourced from US and Canada

Cars.com Ranking 6-10

Cars.com Ranking Car LTM sales

(US)Nation of

Ownership% Parts North

American

10 Toyota Avalon 50,376 Japan 80%9 Buick Enclave 60,678 U.S. 77%8 GMC Acadia 82,612 U.S. 77%7 Toyota Tundra 108,075 Japan 75%6 Chevrolet Traverse 90,034 U.S. 77%

Cars.com Ranking 1-5

Cars.com Ranking Car LTM sales

(US)Nation of

Ownership% Parts North

American

5 Toyota Sienna 118,299 Japan 75%4 Honda Odyssey 130,696 Japan 75%3 Dodge Avenger 105,046 Italy 75%2 Toyota Camry 398,609 Japan 75%1 Ford F-Series 711,661 U.S. 75%

Surprising Results

• 50% of all vehicles in ranking are manufactured / owned by Japanese companies

• 40% of all vehicles in ranking are manufactured / owned by domestic companies (Fiat owns Dodge)

Surprising Results

• The US edges out Japan on absolute sales basis

• …But only one domestic vehicle cracked the top 5, (two if you consider Dodge’s Avenger), compared to Japan’s 3 vehicles.

Total Sales from Top 10

US 944985Japan 806055

Ford wins, sort of

• Ford tops the loyalty charts too, barely

• 50% of the top 10 most loyal brands are Japanese

• …compared to 20% for domestic manufacturers.

Brand Brand Loyalty (%)

Ford 44.1%Toyota 43.3%

Kia 39.9%Hyundai 38.6%Honda 38.1%

Chevrolet 38.0%Subaru 35.7%Nissan 34.7%

Mercedes-Benz 34.6%Lexus 34.1 %

Source: Experian

Which one to buy?

• But with the US auto industry recovering…

• Which manufacturer is the best buy today?

Valuations

Company Ticker P/B P/CF EV/EBIT Dividend

Ford F 1.8 9.5 20.5 2.36%

General Motors GM 1.9 6.7 14.4

Honda HMC 1.4 8.9 17.8 2.24%

Toyota TM 1.7 8.5 20.1 1.54%

The Price of Loyalty

• American sourced parts and dedicated customers appear to come at a price

• Loyalty-rich automakers Honda, Toyota, and Ford all trade at a premium to General Motors

• Typically that’s a premium worth paying, but General Motors has a few aces up their sleeve…

The Better Choice

Despite falling short in loyalty and “most-American” ratings General Motors remains the

best automaker to buy for a booming US market.

The Better Choice

• $35.5B in carryforward tax losses ensure tax free earnings for years to come.

• A revamped Silverado should provide a sales and earnings boost (pickups typically carry higher margins than other vehicles)

The Better Choice

• General Motors is finally making small cars people want to drive

• A rebounding housing market provides a tailwind for pickup sales

• General Motors has divested older under-performing brands and renegotiated union agreements post-bankruptcy

The Best Choices

• This is all centered around the domestic auto industry though. If you want to make real money, you think global

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