What's better for US economy: A foreign car made in the USA, or an American car that's imported?
This is an interesting topic, because Toyota makes most of their parts in the US (75%) for most cars, and I believe all are assembled here. American brands such as Ford and GM on the other hand mostly contain parts from Mexico and Canada (less than 75% US parts), and many of their vehicles are now assembled in Mexico and Canada.
Some people say that Toyota is better for the US economy, and I agree. People say that since most the parts are made here and the vehicles are assembled here, Toyota creates many jobs, and a lot of the money stays in the country. Many Americans can also invest in Toyota stock, as with all other car companies.
The counter argument though is that the profits of Toyota are leaving and going overseas, while Ford and GM stay here. People also say that most of the vehicle development of Toyota happens in Japan, while Ford and GM stay here, so people may lose jobs there.
What's better for the US economy?
People tease me about driving America's largest selling import--a Ford. Most of the parts are made in Canada.
Great question. There's no right or wrong answer. It depends on how you define better and how you define economy.
Selling in the US is the largest contributor to GDP. Both GM and Toyota contribute equally per unit in that category. GM has more administration cost per unit in the US. Toyota has more production cost per unit in the US. Overall GDP contribution per unit has the edge going to Toyota.
As far as profits, both are multi-national corporations and profits to owners go wherever the owners reside. US citizens have large holdings in all multi-national corporations. Contributions to the economy by the capital class is a different and more complicated issue. Call it a toss-up.
The final difference is investment. Who is investing in the US and who isn't. This is where the purchasing decision becomes a self-fulfilling prophecy. Whoever you buy from will have the incentive to invest. Toyota sales have steadily increased and led to increased investment. GM has lost market share and moved investment elsewhere.
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