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Trump asks Japanese automakers to do something they've been doing for 35 years

Greg Gardner, Detroit Free Press on

Published in Automotive News

President Donald Trump asked Monday that Japanese automakers consider making vehicles in the U.S., apparently unaware they've been doing that for decades.

"Try building your cars in the United States instead of shipping them over. That's not too much to ask," Trump said during an appearance before Japanese business executives. "Is it rude to ask?"

It's not so much rude as oblivious to the fact that foreign production has transformed the nation's auto industry over the past three decades.

Trump's comments ignited a social media storm of ridicule, as well as a flurry of helpful facts.

"Honda, Subaru, Nissan, Mazda and Toyota built 2.4 million vehicles, accounted for one-third of all U.S. auto production in 2016," Kristin Dziczek, director of the Center for Automotive Research's industrial, labor and economics group, posted on Twitter.

When you add Hyundai, Kia, BMW, Mercedes-Benz and Volkswagen, 48 percent of all vehicles assembled in the U.S. last year were produced by companies other than Ford, General Motors and Fiat Chrysler, according to the International Organization of Motor Vehicle Manufacturers.

Toyota's largest assembly operation with about 8,000 employees is in Georgetown, Ky.

The first U.S-made Honda Accord rolled off the Marysville, Ohio, assembly line in 1982.

"Foreign automakers -- Japanese, German, Korean--all have a strategy to build where they sell, and the United States is a huge market," Dziczek said. "Local production protects against currency swings and creates jobs in the United States."

The Japan Automobile Manufacturers Association estimates that its members built nearly 4 million vehicles in the U.S. last year. Exports from Japan to the U.S. have fallen from 3.5 million cars a year in 1986 to just over 1.5 million in 2016.

 

Three out of four Japanese cars sold in the U.S. last year were built in North America, including Mexico and Canada.

Japanese-brand automakers operate 24 manufacturing plants and 43 engineering and design centers in 20 states. Collectively they have invested $43.6 billion in the U.S.

In August, Toyota and Mazda announced plans to invest $1.6 billion in a new jointly operated assembly plant to be built in the U.S.

Despite that presence, the U.S. still runs a trade deficit with Japan of about $69 billion. Ford, General Motors and Fiat Chrysler sell very few vehicles in Japan. That has been a point of contention for decades.

"The issue with Trump is that if you ignore some of the things he says, it might come back to bite you," said Hoyt Bleakley, associate professor of economics at the University of Michigan. "Every time there is a comment like that, you have to factor in another wave of uncertainty about future economic or trade policy."

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