By on September 27, 2017

Detroit (Bryan Debus/Flickr)

Detroit’s dominance in the domestic automotive sphere continues to erode. Whereas the manufacturing hub, home to Ford, General Motors, and Fiat Chrysler Automobiles, once churned out the bulk of vehicles built — and sold — in the United States, times have changed.

The former Big Three automakers no longer hold the majority market share in the U.S. (in 2016 it was 44.9 percent), necessitating a name demotion to “Detroit Three.” From Silicon Valley to the Midwest and South, a diverse group of automakers is busily assembling cars and SUVs for a population with very wide-ranging tastes. We’ve long since become used to the idea that many Hyundais now hail from Alabama, several Subarus come from Indiana, Honda models grow in Ohio, and BMWs arrive from South Carolina with a Southern drawl.

Now, one industry watcher claims the Detroit Three won’t even finish the year as the majority builder of North American-made vehicles.

According to IHS Markit, Detroit will soon hand over the crown to its domestic and foreign rivals, Bloomberg reports.

In a briefing held today on the outskirts of that city, IHS Markit analyst Joe Langley predicted a total of 8.6 million vehicles produced in North America by Ford, GM, and FCA in 2017, just a hair below the 8.7 million vehicles forecasted for all other manufacturers. The rival group includes Tesla, as well as German, Japanese, and Korean automakers.

With several automakers — Toyota, Mercedes-Benz, and Volvo, for example — announcing production expansions in just the past week, the gap will only grow after this year’s anticipated turning point. It’s truly Detroit vs. Everybody, and everybody’s winning. By 2024, IHS Markit seed the Detroit Three building 8.1 million vehicles in North America, compared to 9.8 million units assembled by the competition.

It’s been a long time coming. After the disappearance of such automakers as Studebaker, Packard, and Kaiser in the 1950s and ’60s, as well as the purchase of AMC by Chrysler in the 1980s, Detroit’s production dominance soon sprouted cracks. Japanese manufacturers arrived on masse in the ’80s, setting up shop in states unfriendly to the United Auto Workers. The Germans and Koreans eventually followed.

Since the recession, all three Detroit automakers have begun looking outward for opportunities, hoping to gain market share outside North America’s borders. At the same time, the number of models sent to Mexico for low-cost production has increased, all in the interest of profitability.

Unfortunately for the Detroit Three, Mexico has also welcomed other manufacturers with open arms.

[Image: Bryan Debus/Flickr]

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21 Comments on “Non-Detroit Three Automakers Already Sell More Cars in North America, and Soon They’ll Make More...”


  • avatar
    ash78

    As other commenters have correctly pointed out, though, these other locations often have factories and logistical support, but most lack any real R&D or design engineering — much of that is still in the Detroit area. It makes sense because you have generations of people with a lot of the skills and culture for that. I’m sure it will eventually shift further, but at the moment most of this R&D and design is done in Japan, South Korea, and/or California.

  • avatar
    volvo

    It took 50 years to reach this point but I wonder at what time it became inevitable.

    Burdened with legacy plants and workforce Detroit could not compete on a cost basis but I believe it was the abysmal design and reliability of Detroit vehicles in the 70s and 80s that truly fixed the downward course.

    Those vehicles turned an entire generation of car buyers away from Detroit and towards Europe and Japan. Those coming of age in that era and who were burned by Detroit passed those impressions on to their offspring and perhaps to the following generation.

    Even if today’s detroit iron is equivalent or better at a given price point than the transplants it might take another several decades to give the Detroit products the perception of being well designed and built.

    A new car is just too expensive a purchase to “roll the dice” and for most consumers reliability (real or perceived) is very important.

    • 0 avatar
      gmichaelj

      “A new car is just too expensive a purchase to “roll the dice” and for most consumers reliability (real or perceived) is very important.”

      I agree the cost of a new car is too important to “roll the dice”

      But, most people I’ve talked to take metal short cuts: they don’t even know all the Foreign Brands in the segment they are looking at. I think some of buying Foreign Brands is a lack of self confidence and need not to appear ‘Stupid’. I’ve had many discussions with Finance grads who ‘know’ Japanese/German Engineers are smarter than their American counterparts. I usually ask them if they think Japanese/German Finance guys are smarter too.

      They generally fall back to something they saw in Consumer Reports, or how their parents’ Windstar or Cutlass was a POS. Potential Toyota/Honda buyers wont even consider an American Branded car. Future BMW/Audi owners only want a ‘high status’ Euro car.

      • 0 avatar
        raph

        Huh and here I thought critical thinking was a universally taught skill in advanced education.

      • 0 avatar
        slavuta

        “Potential Toyota/Honda buyers wont even consider an American Branded car.”

        I wouldn’t consider Honda and Toyota because they simply don’t make the product I like. I would consider Ford but not Mexico-made Ford

        • 0 avatar
          gmichaelj

          The people I worked with, in financial consulting firms, would rule out owning any type of vehicle that was not made by a Japanese brand. So I don’t know what you’d want that Japan Inc doesn’t make, but my associates wouldn’t consider anything like say a Corvette if the Japanese didn’t make one.

          Not sure why you wouldn’t want a Mexican made American Branded Car, but that would also be outside the range of consideration at say a large financial consulting firm. I know of one senior manager in a group of about 45 people who owned a Jeep and I owned a Mustang. Everyone else was Japanese or German

          • 0 avatar
            gmichaelj

            would rule out owning any type of vehicle that was not made by a Japanese (* or German *) brand.

          • 0 avatar
            ajla

            “would rule out owning any type of vehicle that was not made by a Japanese brand.”

            Outlanders, Sentras, and SX4s as far as the eye can see.

        • 0 avatar
          NormSV650

          Honda/Toyota do not offer the torque that the domestic, German, or the Koreans.

          A 2017 CR-V EX AWD(L) is ($2,000)$5,000 more expensive than a 2018 Equinox 1.5T. Three years down the road and under 40,000 miles the CR-V cost more than the Equinox based on car.com dealership advertised prices.

          Sounds like your financial coworkers need some retraining.

          • 0 avatar
            volvo

            I am not quite sure what you are saying but it sounds like what you are saying is that a 3 y/o 40K CRV depreciates less than an equally old Equinox. Is that what you mean?

          • 0 avatar
            NormSV650

            Volvo, no, the Honda CR-V depreciates more than the Equinox. Look it up on cars dot com.

          • 0 avatar
            volvo

            OK. I thought you were saying that a 3 year old CRV cost more than a 3 year old Equinox. I guess you meant the cost of ownership was more

      • 0 avatar
        Dave M.

        After 30 years of “Japanese-only” mantra based on previous domestic experience, my wife and I got a top-shelf Ford Edge in 2010. Maybe we had one of the rare bad ones (continual cooling system issues) but we bailed and fled back to Japan Inc a couple of years later. We work too hard for our money.

    • 0 avatar
      JimZ

      “A new car is just too expensive a purchase to “roll the dice” and for most consumers reliability (real or perceived) is very important.”

      yeah, but “rolling the dice” back then meant you were taking a chance on a car which would grenade its engine within 30,000 miles, or overheat regularly, or die on the road and strand you, or just plain refuse to start in the morning.

      “rolling the dice” today means you might end up with a car where the infotainment touchscreen freezes, or the “check engine” light comes on, or you might be inconvenienced by one more recall than a competing brand.

    • 0 avatar
      George B

      volvo, even the “Detroit” Big Three moved out of the city of Detroit in the early part of the 20th century. Large automobile plants need huge contiguous tracts of land. The main difference is that most of the transplants choose large tracts of land further away from cities in areas where unions are much weaker.

  • avatar
    hamish42

    I live in Ingersoll, Ontario, Canada where my neighbors are putting up a brave fight against possible GM plans to move their production to Mexico. I just went by there and there are dozens out. But, the simple fact is that no assembly plant in Canada, given the wages/benefits/pensions that my neighbors receive can possibly compete with other venues where the cost of an hour of a worker’s time is drastically lower. The auto companies have to make a buck, and one of the quickest ways to do it is to cut the costs of labor. So, sad to say, whether they take strike action or not the chance of my neighbor’s plant being there in the next few years is very slim. I very much regret this situation. They are nice people with good families.

  • avatar
    ToddAtlasF1

    I couldn’t care any less about who makes cars in North America or in what quantity. I do care about who makes cars in the United States of America. Lets see those numbers, and only those numbers. I suspect it will just go to show the UAW three to be even further behind other US employers.

  • avatar
    amca

    Just for perspective: GM, at its peak, had something approaching 50% market share.

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