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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