People Saving People

U.S. Department

of Transportation http://www.nhtsa.dot.gov

National Highway

Traffic Safety

Administration

DOT HS 809 208 January 2001

NHTSA Technical Report

Evaluation of the American

Automobile Labeling Act

This document is available to the public from the National Technical Information Service, Springfield, Virginia 22161.
The United States Government does not endorse products or

manufacturers. Trade or manufacturers' names appear only

because they are considered essential to the object of this report.
Technical Report Documentation Page

3. Recipient's Catalog No. 1. Report No.

DOT HS 809 208

4. Title and Subtitle

2. Government Accession No.

EVALUATION OF THE AMERICAN

AUTOMOBILE LABELING ACT

5. Report Date

January 2001

6. Performng Organization Code

7. Author(s)

Juanita S. Kavalauskas and Charles J. Kahane, Ph.D.

8. Performing Organization Report No.

9. Performing Organization Naae and Address

Evaluation Division, Plans and Policy

National Highway Traffic Safety Administration

Washington, DC 20590

10. Work Unit No. (TRAIS)

11. Contract or Grant No.

12. Sponsoring Agency Name and Address

Department of Transportation

National Highway Traffic Safety Administration

Washington, DC 20590

13. Type of Report and Period Covered

NHTSA Technical Report

14. Sponsoring Agency code

15. Suppleoentary Notes

16. Abstract

Congress passed the American Automobile Labeling Act (AALA) to help consumers in the selection of

new vehicles by providing information about the country of origin of vehicles and their parts. Passenger

vehicles manufactured after October 1, 1994 must have labels specifying their percentage value of U.S./

Canadian parts content, the country of assembly, and countries of origin of the engine and transmission.

The evaluation is based on a consumer survey to see if new-vehicle purchasers know about the labels,

understand them, and/or use them to help select a vehicle; manufacturer and dealer surveys to learn about

their response to the labels; and statistical analyses of the actual trends in U.S./Canadian parts content in

new motor vehicles after 1994.

Over 75 percent of consumer survey participants, even those that care deeply about "buying American,"

were unaware of the existence of the AALA labels. Many participants who did read the label said they

used the country-of-assembly information, but none said they used the numerical U.S./Canadian parts

content score or the engine/transmission information. Overall U.S./Canadian parts content in new cars and

light trucks dropped from 70 percent in model year 1995 to 67.6 percent in 1998; however, it increased

from 47 to 59 percent in transplants while dropping from 89 to 84 percent in Big 3 vehicles. The trends in

parts content are undoubtedly influenced by the 1995 U.S.-Japan Agreement on Autos and Auto Parts and

the North American Free Trade Agreement (NAFTA).

17. Key Words '

American Automobile Labeling Act; AALA; survey;

domestic content; NAFTA; trade; import; statistical

analysis; evaluation; transplant; econometrics;

consumer information; market analysis

Security Classif. (Of this report) 20. Security Classif

Unclassified

18. Distribution Statement

Document is available to the public through the

National Technical Information Service, Springfield,

Virginia 22161

19

Unclassified

(Of this page) 21. No. of Pages

245

22. Price

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized

TABLE OF CONTENTS

Executive summary v

1. Introduction 1

1.1 Evaluation of the American Automobile Labeling Act 1

1.2 Other programs and factors influencing parts content and assembly locations ... . 6

1.3 The U.S.-Japan Agreement on Autos and Auto Parts 14

1.4 AALA requirements 17

1.5 Dissemination of AALA information 24

2. Trends in U.S./Canadian content and assembly, 1995-98 27

2.1 The data base for studying U.S./Canadian content trends 27

2.2 Overall trends in U.S./Canadian parts content and assembly locations 30

2.3 "Big 3" vs. foreign-based nameplates 32

2.4 "Domestics" vs. "transplants" vs. "imports" 34

2.5 Cars vs. pickup trucks vs. SUVs vs. vans 40

2.6 Effect of within-group USCan content shifts vs. between-group market shifts .. . 43

2.7 By manufacturer 44

2.8 Make-models that gained or lost USCan content 49

2.9 USCan content changes in carryover vs. redesigned vs. entirely new models ... . 52

3. Regression of new vehicle sales by U.S./Canadian content and other factors 57

3.1 The data base for the regression analyses 58

3.2 Regression examples and strategy 63

3.3 Regression results 69

3.4 Relationships between USCan content and price 79

4. Import dependence in motor vehicles and parts compared

to other consumer products, 1992-98 87

4.1 The data base for comparing import dependence trends in various industries.... 87

4.2 Basic statistics and trends, 1992-98 93

4.3 Before vs. after the AALA labels: 1992-94 vs. 1995-98 96

4.4 Short-term change: just before AALA (1994) vs. just after AALA(1995) 98

4.5 Longer-term change: 1992 vs. 1998 98

ill
5. Survey background and methods 103

5.1 Objectives of the data collection 103

5.2 Preparatory steps 103

5.3 Consumer survey 104

5.4 Manufacturer survey 110

5.5 Dealer survey 112

6. Consumer survey 115

6.1 Purchasers, planners and subgroups 115

6.2 Values: importance of vehicle content/"buying American" 117

6.3 Knowledge of where vehicles are assembled 120

6.4 Awareness of the AALA law and label 126

6.5 Understanding of the AALA label 128

6.6 Influence of the AALA label on past and future purchasing decisions 128

6.7 Influence of demographic factors 130

7. Manufacturer survey 133

7.1 Dissemination and perceived importance of the labels 133

7.2 Factors that affect decisions where to locate facilities or buy parts 135

7.3 Cost of AALA to manufacturers 138

8. Dealer survey 147

8.1 Description of the sample 147

8.2 Dealer awareness of the label 147

8.3 Dealer advertisement of the label 148

8.4 Dealers' perceptions of customer response to the labels/buying preferences . . . 148

8.5 Sales staff knowledge, training and presentation of the labels 151

Discussion of findings : 155

References 161

Appendix A: USCan content, registration, price and assembly data for cars and light trucks 163

Appendix B: Listing of the data file for the regression analyses 173

Appendix C: Request for public comment on proposed collection of information 187

Appendix D: Consumer survey questionnaire 191

Appendix E: Manufacturer survey questionnaire 213

Appendix F: Dealer survey questionnaire 229

IV
EXECUTIVE SUMMARY

The American Automobile Labeling Act (AALA) was enacted in October 1992 in order to aid

potential purchasers in the selection of new passenger motor vehicles by providing them with

information about the country of origin of vehicles and their parts. The AALA provides that new

passenger cars, pickup trucks, vans and sport utility vehicles manufactured on or after October 1,

1994 have labels specifying the percentage value of the U.S./Canadian parts content of each

vehicle, the country where the vehicle was assembled, and the countries of origin of its engine and

transmission. On July 21, 1994, the National Highway Traffic Safety Administration (NHTSA)

published a new regulation to implement the AALA (Part 583 of Title 49 of the Code of Federal

Regulations).

The Government Performance and Results Act of 1993 and Executive Order 12866 require

agencies to evaluate their existing regulations to see if they are achieving their objectives and to

assess their impacts. This report evaluates the AALA from two aspects.

First, since AALA is an information program, NHTSA surveyed 646 consumers in 1998 who had

bought or leased a new vehicle during the past six months or were planning to buy or lease within

the next three months to find out what percentage had heard of the labels, read them, understood

them, and/or used them to help select a vehicle. Because if nobody reads, or nobody understands,

or nobody uses the labels, they are not achieving their objective of providing information to

potential purchasers. The survey investigated how many consumers think the country of origin of

vehicles/parts is critically important information and if these consumers in particular are reading

and using the labels to assist their purchasing decisions. NHTSA also surveyed manufacturers

and dealers to learn about their activities and costs to produce and disseminate the labels.

The principal rinding was a disconnect between consumers' ignorance of the labels and their belief

in the importance of buying a U.S./Canadian product. The great majority of consumers were

unaware of the existence of the labels, only 7 percent had read the label at a dealership, and not a

single person explicitly stated they had used the numerical parts-content score on the AALA label

to comparison-shop among make-models according to their percentages of U.S./Canadian parts

content. In fact, the only data on the label that a substantial number of consumers called

influential was the country of final assembly. • (Actually, country-of-assembly information was

available to consumers before the AALA, but not necessarily in a standardized and conveniently

accessible form like the AALA labels.)

Yet, one-sixth of the survey participants, a proportion that would extrapolate to 2,500,000 newvehicle sales per year in the United States, rate it critically important that vehicles be made in the

U.S. or Canada and, more generally, always try to "buy American" when they go to a store. But

even this group is no more cognizant of the labels than the average consumer. They mostly "buy

American" simply by acquiring any Big 3 vehicle assembled in North America. They are not using

the numerical parts-content scores to comparison-shop for models with the highest U.S./Canadian

parts content.
Second, the report statistically analyzes sales data to track the share of U.S. /Canadian parts and

assemblies in new vehicles during 1994-98. Did it rise or fall? How do trends in motor vehicles

compare to other consumer products such as radios or refrigerators? Did make-models that

increased U.S./Canadian parts content experience, on the average, higher or lower sales?

In this context, however, it is important to recognize that well before the AALA, in fact since the

1960's, a series of laws, regulations, international agreements, incentives and economic conditions

have motivated foreign-based manufacturers to transplant some of their assembly and parts

facilities to North America. Above all, a 1995 U.S.-Japan Agreement on Autos and Auto Parts

explicitly aimed to increase U.S. parts content in the transplant vehicles of Japanese-based

companies. These market analyses just tell us what actually happened to vehicle sales in 1995-98.

They will not tell us to what extent, if any, AALA labels influenced the observed trends.

The introduction of AALA labels in model year 1995 was not followed by a resurgence of

U.S./Canadian parts content in the overall new-vehicle fleet, but rather a modest decline from an

average of 70 percent in model year 1995 to 67.6 percent in model year 1998. The net effect,

however, conceals two trends working in opposite directions.

Transplant vehicles (assembled in North America by foreign-based manufacturers) increased their

proportion of U.S./Canadian parts from 47 to 59 percent and reduced their content of overseas

parts. At first glance, that could be a response to the labels. But the strong, explicit terms of the

1995 U.S.-Japan Agreement and the current dearth of consumer interest in AALA's numerical

parts-content scores intuitively suggest that the Agreement and earlier actions have had more

influence than the AALA labels. (However, the parts-content scores on the AALA labels have

helped Federal agencies monitor progress under the U.S.-Japan Agreement.)

The Big 3 reduced U.S./Canadian parts content from 89 to 84 percent in 1995-98, apparently by

sourcing or purchasing more parts in Mexico. The net shift, in essence, is largely from overseas

countries to Mexico, a plausible development given the North American Free Trade Act

(NAFTA).

In 1992-98, unprecedented prosperity and a strong dollar in the United States were associated

with increases in net imports for most consumer goods, such as refrigerators, carpets, or furniture.

The automotive industry, with programs such as AALA, the U.S.-Japan Agreement, etc. did not

massively differ from the economy-wide pattern, but the growth in import dependence for motor

vehicles and parts was just a bit smaller than the average for other consumer goods.

Here are the principal findings of the evaluation, followed by a list of conclusions, a synopsis of

the impact of AALA to date, and possible future strategies to enhance consumer awareness and

use of AALA information - or to reduce the burden of AALA.

VI
CONSUMERS' AWARENESS AND INFLUENCE BY THE AALA LABELS

• In a survey of 646 people who had bought or leased new vehicles during the past 6

months or were planning to do so within 3 months:

23%* knew of the existence of the AALA label

15%* said they had seen an AALA label

7%* had read the label at a dealership

5%* said they were influenced by the label to any degree whatsoever

2%* were moderately or strongly influenced by the label

because it identified the vehicle's country of assembly

nobody said they used the labels to comparison-shop among make-models

according to their percentages of U.S./Canadian parts content

Dealers concurred that the country-of-assembly is the information on the AALA label

most important to consumers.

CONSUMERS' UNDERSTANDING OF THE AALA LABELS

• Among the 41 people who had read the label at a dealership:

86% thought it was "very easy" or "somewhat easy" to understand

However, only

35% correctly identified that Canadian parts were included in the numerical parts

content score, whereas

23% mistakenly believed that Mexican parts are included in this score

* The percentages in this table are based on the full set of 646 participants and they are not

additive. Each group is a subset of all the preceding groups. For example, 5 percent of the 646

participants said they were influenced by the label to any degree whatsoever, and all of these had

also read the label at a dealership, seen it, and knew of its existence (i.e., belonged to all three

preceding groups).

vu
CONSUMERS' KNOWLEDGE OF WHERE THEIR OWN VEHICLE WAS ASSEMBLED

94% of purchasers of Big 3 vehicles assembled in the U.S. or Canada correctly

identified them as assembled in the U.S. or Canada (only 1% thought they

were assembled overseas and 5% didn't know).

81% of purchasers of vehicles assembled overseas correctly identified them as

assembled overseas, although 17% named the wrong country (11%

thought they were assembled in the U.S. or Canada and 8% didn't know).

but only 54% of purchasers of transplants correctly identified them as assembled in the

U.S. or Canada (26% thought they were assembled overseas and 20%

didn't know).

IMPORTANCE OF US/CANADIAN ASSEMBLY AND CONTENT TO CONSUMERS

• Survey participants rated from 0 to 100 the importance of various factors in selecting a

new vehicle. The average new-vehicle customer considers "Made in the U. S./Canada"

(43) less important than most of the other factors typically considered decisive in selecting

a vehicle: e.g., reliability (93), safety (85), price (76), styling (70).

• Purchasers of Big 3 vehicles consider "Made in the U.S./Canada" (57) about as important

as a vehicle's optional equipment (58), fuel economy (57) and cargo capacity (59), but

less decisive than its reliability (93), drive quality (90), safety (84), size (76), price (72), or

styling (72).

• Purchasers of transplant vehicles consider "Made in the U. S./Canada" (26) nearly the least

important factor. Buyers of import vehicles consider it even less important (11).

THE STAUNCH "BUY AMERICAN" MARKET SEGMENT

• One-sixth of the survey participants considered "Made in the U. S./Canada" critically

important (100 rating) for their new vehicle andj more generally, always try to "buy

American" when they go to a store.

• This staunch "buy American" group had recently bought 96 percent Big 3 vehicles

assembled in the United States, Canada or Mexico and 4 percent transplants assembled in

the United States. None had bought an overseas import.

• Only 20 percent of this group knew of the existence of the AALA label, and only 9

percent had read it at a dealership. Thus, most of them bought a car assembled in North

America without consulting the label or ascertaining the U.S./Canadian parts content.

vm
POTENTIAL INFLUENCE OF THE LABELS

• In the survey, 56 percent of those who had not heard of the label said that now that it had

been explained to them it would influence their future purchase of a vehicle.

DISSEMINATION OF THE LABELS

• At this time (2000), summaries of label information - e.g., tables that list the make-models

in each vehicle class by U.S./Canadian parts content - are not available to consumers via

the news media or the Internet.

• Only six of the 646 vehicle purchasers had the AALA label pointed out and explained to

them by a salesperson. Only one said it was an important part of the sales presentation.

• Only 2 percent of dealers said their sales staff provides label information to the customers

without being asked.

• Two of the 21 manufacturers produced brochures explaining the labels in 1994. Both

discontinued the brochures, citing lack of consumer interest.

• 19 manufacturers said they had never encouraged or required dealers to make customers

aware of the AALA label.

• 51 percent of dealers said that manufacturers provided them with no guidelines or

materials for training their staff to explain the labels.

COST OF AALA TO THE MANUFACTURERS

• Manufacturers reported they had spent a cumulative total of $37.9-47.5 million to

implement the AALA through September 1998, including start-up and recurring costs.

• Since 60 million passenger vehicles were sold from October 1994 through September

1998, that amounts to $0.63-0.79 per vehicle, including start-up. The cost of operating

and maintaining the AALA, excluding start-up, is estimated to be $0.10-0.30 per vehicle.

IX
PERCENTAGE OF U.S./CANADIAN PARTS CONTENT IN NEW VEHICLES

• The value-weighted average U.S./Canadian parts content in new passenger vehicles

registered in the United States, by model year, was as follows:

1995 1998

All new vehicles 70 67.6

Big 3 89 84

Transplants 47 59

Imports from overseas 4 4

• Overall U.S./Canadian content dropped from 70 percent in model year 1995 to 67.6

percent in 1998.

• Big 3 vehicles, on the average, have substantially higher U.S./Canadian content than

transplants (vehicles assembled and sold in North America by foreign-based companies),

and transplants' content is much higher than imports' (vehicles assembled overseas by

foreign-based companies).

• Big 3 vehicles are using fewer U.S./Canadian parts and more Mexican parts.

• Transplants have substantially increased U.S./Canadian parts and reduced overseas parts.

• Only one manufacturer stated that parts-content information labels influenced them to shift

any operations from one country to another (and that company did not substantially

increase U.S./Canadian content in 1995-98).

PERCENT OF NEW VEHICLES ASSEMBLED IN THE UNITED STATES OR CANADA

• The percent of new vehicles registered in the United States, by country of assembly, in

model year 1994, just before the AALA and in model year 1998, was as follows:

1994 1998

United States or Canada 84.8 83.2

Mexico 2.2 4.1

Overseas 13.0 12.7

• More vehicles sold in the United States are being assembled in Mexico, and

proportionately fewer in the U.S./Canada or overseas.
The percent shares of new-vehicle registrations in the United States for Big 3, transplants

and imports in model year 1994, just before the AALA and in model year 1998, were:

1994 1998

67.0

2.8

.2

70.0

16.2

1.3

12.5

Big 3

Assembled in U.S./Canada

Assembled in Mexico

Imports from overseas

Foreign-based companies

Assembled in U.S./Canada

Assembled in Mexico

Imports from overseas

71.0

1.8

.5

73.3

13.8

.4

12.5

26.7 30.0

The Big 3 lost some market share to foreign-based companies in model years 1994-98.

"Transplants" assembled in North America accounted for the entire gain by the foreignbased companies.

Big 3 and foreign-based companies both increased exports from Mexico to the U.S.

"Captive imports" from overseas by the Big 3 captured a negligible share of the market in

1994-98.

CARS VS. TRUCKS

• U.S./Canadian parts content (value-weighted averages), by vehicle type:

1995 1998

Passenger cars

Pickup trucks

Vans

Sport utility vehicles

64

83.3

85.5

70

60

83.1

80.5

69

XI
Pickup trucks and vans have higher U.S./Canadian content than cars and SUVs.

Pickup trucks and SUVs came closest to maintaining their levels of U.S./Canadian content

from 1995 to 1998.

Market shares (percent of new vehicles registrations), by vehicle type and model year:

1994 1998

Passenger cars 58.3 53.4

Pickup trucks 20.2 17.9

Vans 10.7 11.0

Sport utility vehicles 10.8 17.7

The market shifted primarily from cars to SUVs

Pickup trucks and vans had smaller changes in market share.

Since cars and SUVs have similar U.S./Canadian content, the net impact of the shift from

cars to SUVs on overall U.S./Canadian content was negligible.

Country of assembly (value-weighted percent of new-vehicle registrations), by vehicle

type and model year:

1994 1998

Passenger cars

U.S./Canada

Mexico

Overseas

Pickup trucks

U.S./Canada

Mexico

Overseas

Vans

U.S./Canada

Mexico

Overseas

Sport utility vehicles

U.S./Canada

Mexico

Overseas

xn

75.5

2.6

21.9

95.6

1.0

3.5

96.6

3.4

84.6

_

15.4

73.9

3.6

22.5

92.3

7.3

.4

97.7

2.3

78.5

2.4

19.1
The overwhelming majority of pickup trucks and vans are assembled in North America.

As a consequence, they also have more U.S./Canadian parts content than cars and SUVs.

Imports from overseas are primarily cars and SUVs - hardly any pickup trucks by 1998.

Exports of pickup trucks and SUVs from Mexico to the United States increased

dramatically from 1994 to 1998.

Tariffs on pickup trucks undoubtedly discouraged imports from overseas, whereas

NAFTA stimulated exports from Mexico to the United States.

IMPORT DEPENDENCE IN MOTOR VEHICLES COMPARED TO OTHER INDUSTRIES

The Department of Commerce publishes annual statistics on U.S. production, consumption,

exports and imports in various industries. Their statistics are not directly comparable to the

numerical scores on the AALA labels (which include Canada, for example). They indicate that:

• Net import dependence in finished motor vehicles was 21.80 percent in 1992, before

AALA and 23.11 percent in 1998, an increase of 1.31 percentage points.

• Net import dependence for 27 non-automotive consumer products (unaffected by AALA)

was 7.34 percent in 1992 and 11.55 percent in 1998, an increase of 4.21 percentage

points.

• In other words, the growth in import dependence for motor vehicles was somewhat less

than the average for other industries unaffected by the AALA, the U.S.-Japan Agreement

on Autos and Auto Parts, etc.

RELATIONSHIP BETWEEN U.S./CANADIAN PARTS CONTENT AND SALES

• Make-models that increased their U.S./Canadian parts content from one model year to the

next experienced, on the average, a slight gain in sales.

• No claim of a cause-and-effect relationship is made here. The analysis merely describes

what happened to sales of make-models that increased U.S./Canadian parts content.

xui
CONCLUSIONS

• Most consumers are unaware of the existence of the AALA labels.

• A sizable proportion of those who know about the labels are influenced by the country-ofassembly information, but few make use of the numerical parts-content score, or the

engine and transmission information.

• Even those consumers that care deeply about U.S./Canadian parts content and assembly

do not rely extensively on the AALA labels to pinpoint the make-models with high

U.S./Canadian content. Instead, they simply buy Big 3 vehicles.

• The manufacturers and their dealers rarely use the AALA information as a selling point.

• More extensive dissemination, such as tables that conveniently list the make-models in

each vehicle class by U.S./Canadian parts content, could increase consumers' awareness of

the AALA data. It is unknown to what extent, if any, that might influence their

purchasing decisions.

• Even consumers who have read the AALA label are often unaware that its numerical score

includes Canadian parts but excludes Mexican parts.

• The introduction of AALA labels in model year 1995 was not followed by a resurgence of

U.S./Canadian parts content or a massive shift from overseas imports to vehicles

assembled in North America (or vice-versa).

• Nevertheless, data from the Department of Commerce suggest that the growth in import

dependence for motor vehicles during 1992-98 was somewhat less than the average

growth in import dependence for other consumer products unaffected by AALA, the U.S.-

Japan Agreement on Autos and Auto Parts, etc.

• Transplant vehicles substantially increased their U.S./Canadian parts content during 1995-

98 and a few make-models reached levels that rival some Big 3 vehicles. It is unknown to

what extent, if any, the AALA labels contributed to the increase, but, intuitively, the U.S.-

Japan Agreement and earlier actions seem to have been the main influences.

• Much of the public is still unaware that transplants are assembled in North America and

contain significant proportions of U.S./Canadian parts.

• The Big 3 and some foreign-based manufacturers stepped up parts and assembly

operations in Mexico after the inception of NAFTA. This has slightly reduced average

U.S./Canadian parts content.

• Make-models that increased U.S./Canadian parts content did not suffer in the marketplace.

xiv
SYNOPSIS: IMPACT OF THE AALA IN 1995-98

The evaluation suggests that the AALA has had two definite and one doubtful impact. First,

many of the consumers who read the AALA labels at the dealership find them convenient and

influential for identifying in what country a vehicle was assembled. Second, Federal agencies use

the parts content scores to monitor progress under the U.S.-Japan Agreement on Autos and Auto

Parts. The doubtful impact is that the labels may have contributed to the increase of U.S./

Canadian content in transplants during 1995-98: while this increase certainly took place, the role

of the labels is doubtful - given that the U.S.-Japan Agreement on Autos and Auto Parts, and

earlier measures, seem to have been quite a bit more influential. However, two current

shortcomings of the AALA are: (1) Most consumers don't know the AALA labels exist. (2) Even

those who know of the labels rarely use the numerical parts-content scores or the information

about engines and transmissions.

POSSIBLE FUTURE ALTERNATIVES

(1) Expand public information and education: Explore potential strategies to disseminate the

AALA information more extensively to the public in convenient formats - e.g., via the

Internet, listing make-models within the various vehicle classes by percent U.S./Canadian

content. If market research such as focus groups indicates a strategy(s) really promises to

increase consumer awareness and ultimately affect purchase decisions, implement that

strategy(s).

(2) Leave the program unchanged: The program would continue to supply a modest

proportion of consumers with country-of-assembly information they find useful. If the

numerical USCan content scores have had any influence on manufacturers to date, that

influence could continue. However, it would be unreasonable to expect future increases in

consumer awareness of the labels.

(3) Modify AALA to require only country-of-assembly information (or repeal AALA): Since

country-of-assembly is currently the only widely used information on the AALA label,

Congress may wish to delete the numerical parts-content score and the information on the

engine and transmission. That would largely eliminate AALA's burden on manufacturers

and suppliers. Or, Congress could simply repeal the AALA since country-of-assembly

information can be obtained elsewhere. This alternative risks losing any impact the

numerical score may be having on manufacturers today, or any potential impact if it were

more widely known to consumers.

xv
CHAPTER 1

INTRODUCTION

The American Automobile Labeling Act (AALA) was enacted in October 1992 in order to aid

potential purchasers in the selection of new passenger motor vehicles by providing them with

information about the country of origin of vehicles and their parts1. The AALA provides that new

passenger cars, pickup trucks, vans and sport utility vehicles (SUVs) manufactured on or after

October 1, 1994 have labels specifying the percentage value of the U.S./Canadian (USCan) parts

content of each vehicle, the country where the vehicle was assembled, and the countries of origin

of its engine and transmission. Two examples of AALA labels are illustrated in Figure 1-1. On

July 21, 1994, the National Highway Traffic Safety Administration (NHTSA) published2 a new

regulation3 to implement the AALA.

1.1 Evaluation of the American Automobile Labeling Act

The Government Performance and Results Act of 19934 and Executive Order 12866,5

"Regulatory Planning and Review," require agencies to conduct periodic evaluations of existing

regulations and programs to assess if they are effectively achieving their regulatory objectives, or

whether modifications are needed to make them more effective or less burdensome. Most

NHTS A evaluations address safety regulations and consist of statistical analyses of crash data to

estimate actual benefits (lives saved, injuries and crashes prevented) and engineering analyses of

costs6. The evaluation of a non-regulatory consumer program that disseminates safety

information likewise boiled down to a statistical analysis of crash data7. But in the case of AALA,

American Automobile Labeling Act originally was part of the Department of

Transportation and Related Agencies Appropriation Act for Fiscal Year 1993, Public Law 102-

388, October 6, 1992. Subsequently, the AALA was incorporated into Title II of the Motor

Vehicle Information and Cost Savings Act, Public Law 103-272, July 5, 1994.

federal Register 59 (21 July 1994): 37294.

3Code of Federal Regulations, Title 49, General Printing Office, Washington, 1998, Part

583.

^Government Performance and Results Act of 1993, Public Law 103-62, August 3, 1993.

federal Register 58 (4 October 1993): 51735.

^Evaluation Program Plan 1998-2002, NHTSA Report No. DOT HS 808 709,

Washington, 1998, pp. 19-27.

7Kahane, C.J., Correlation of NCAP Performance with Fatality Risk in Actual Head-On

Collisions, NHTSA Technical Report No. DOT HS 808 061, Washington, 1994.
FIGURE 1-1: SAMPLE AALA LABELS

PARTS CONTENT INFORMATION

FOR VEHICLES IN THIS CARLINE:

U.S./CANADIAN PARTS CONTENT 65%

MAJOR SOURCES OF FOREIGN PARTS CONTENT:

JAPAN: 15%

FOR THIS VEHICLE:

FINAL ASSEMBLY POINT: XXXXXX, OHIO, USA

COUNTRY OF ORIGIN:

ENGINE PARTS: U.S.

TRANSMISSION PARTS: JAPAN

NOTE: PARTS CONTENT DOES NOT INCLUDE FINAL ASSEMBLY,

DISTRIBUTION, OR OTHER NON-PARTS COSTS.

PARTS CONTENT INFORMATION

FOR VEHICLES IN THIS CARLINE:

U.S./CANADIAN PARTS CONTENT 15%

MAJOR SOURCES OF FOREIGN PARTS CONTENT:

MEXICO: 45%

GERMANY: 20%

FOR THIS VEHICLE:

FINAL ASSEMBLY POINT: XXXXXX, MEXICO

COUNTRY OF ORIGIN:

ENGINE PARTS: MEXICO

TRANSMISSION PARTS: GERMANY

NOTE: PARTS CONTENT DOES NOT INCLUDE FINAL ASSEMBLY,

DISTRIBUTION, OR OTHER NON-PARTS COSTS
a non-safety consumer information program, it is not so obvious what needs to be evaluated and

what data should be analyzed. First, it is necessary to understand the objectives and goals of the

regulation and the legislation that engendered it. It is also noteworthy that AALA does not exist

in a vacuum, but is one of a series of laws, regulations, international agreements and incentives

that may influence manufacturers' decisions on where to manufacture or source parts and

assemblies.

Stated goals of the AALA: The NHTSA regulation establishing the labels says rather neutrally

their purpose is "to aid potential purchasers in the selection of new passenger motor vehicles by

providing them with information about the value of the U.S./Canadian and foreign parts content

of each vehicle."8 It does not say how they might use the information or how it might affect their

selection. Still, even this brief statement is enough to establish an initial evaluation objective, to

survey purchasers and find out what percentage have heard of the labels, read them, understood

them correctly, and/or used them to help select a vehicle. Because if nobody reads, or nobody

understands, or nobody uses the labels, they are not "aiding potential purchasers."

Barbara Mikulski, the Senator from Maryland who introduced the AALA in 1992, stressed that its

goal was consumer information, like the "label that tells us how many calories are in [a] can of

soup." "This legislation does not attack anyone, nor punish any nation. If people want to buy a

foreign car, that is their choice." However, for the "millions of Americans [who] want to buy

American cars,...[who] want to practice pocketbook patriotism,...[who believe] American

automobile workers build some of the best cars in the world," these "easy-to-read stickers" will

"make sure they have the opportunity to know what they are doing.9"

Thus, another group of evaluation objectives emerges. We should statistically analyze sales

trends to see if the share of U.S. parts and assemblies has changed since AALA, and in particular

if make-models that increased their U.S. parts content experienced a change in sales. In addition,

the purchaser survey should investigate how many consumers staunchly believe in "buying

American" and if these consumers in particular are reading and using the labels to assist their

purchasing decisions.

Other potential effects of the AALA - the lesson from NCAP: Although AALA is a consumer

information program, its most far-reaching effect could be directly on the manufacturers, rather

than on consumer behavior or the manufacturers' response to that behavior. In other words, the

labels could for various reasons directly encourage the manufacturers to increase or decrease U.S.

parts or assemblies even without strong evidence of consumer interest in and response to the

labels.

%Code of Federal Regulations, Title 49, General Printing Office, Washington, 1998, Part

583.2.

Congressional Record - Senate 138 (19 February 1992): 1710. Congressional Record -

Senate 138 (4 August 1992): 11415.
NHTSA's New Car Assessment Program (NCAP) is a prime example. In 1979 the agency began

frontal crash tests of cars and published numerical safety performance scores. While this program

and its subsequently developed "star ratings" are now well known, it was not so at first. If a

consumer survey similar to the one described in Chapter 6 of this report had been conducted

during the early 1980's, it would no doubt have shown that few consumers knew about NCAP

scores, and fewer used them to select their new car. Yet NCAP scores and survival rates in actual

crashes improved remarkably during those early years: 49 percent of model year 1979-82 cars but

just 14 percent of 1983-86 cars had poor NCAP scores. The fatality risk for belted front-seat

occupants in head-on collisions decreased by 20 percent10. The mere arrival of a governmentissued numerical score, regardless of consumer awareness or response, apparently galvanized an

industry-wide effort to excel on that score. Manufacturers always desire to build safe vehicles,

but now the NCAP score gave them a focus and a measuring tool to quantify and compare

"safety." In addition to a positive motivation to achieve good scores, it also created negative

motivations to avoid poor scores, such as: unwanted government attention to poor performance,

discussion in the trade press that could ultimately feed public perceptions of shoddy design, or

potential litigation by people involved in crashes.

AALA's numerical parts-content score could have the same effect on manufacturers even if few

individual consumers use the information. It is a government-issued score that quantifies and

allows explicit comparison of vehicles' North American content. It differs from NCAP in that the

"right" direction for the score is not obvious but depends upon whom you ask: everybody wishes

for safer vehicles, but not necessarily "more American" vehicles. But manufacturers could still be

motivated to avoid scores that might result in unwanted attention or discussion in the trade or

popular press.

The implications for the evaluation are to increase the importance of statistical analyses of sales

trends to see if the share of U.S. parts and assemblies has changed since AALA. We should ask

the manufacturers if the labels were a factor in decisions to locate parts manufacturing or

sourcing. Last but not least, if the study shows a strong change in North American parts content

in some group of vehicles, even though few consumers pay attention to the numerical partscontent score, those two findings should not be viewed as contradictory.

Three caveats: Three important caveats, however, arise in connection with these evaluation

objectives. First, AALA as enacted requires the labels to specify the proportion of U.S. or

Canadian parts, not just U.S. parts. Since the numerical scores on the AALA labels pertain to

U.S./Canadian content, not just U.S. content, so too this report will analyze the trend in USCan

content, not U.S. content11.

10Kahane (1994), pp. 129-147, especially p. 137.

"The International Trade Administration of the U.S. Department of Commerce explains:

"For the purposes of the AALA, the United States and Canada are considered to be one source of

auto parts. This is due to the high degree of integration between the two markets, originally

encouraged by the U.S./Canada Auto Pact of 1965. The AALA was written before the passage

of the North American Free Trade Agreement (NAFTA), and therefore does not include Mexican
Second, it is not the mission of NHTSA or the Department of Transportation to persuade

consumers to buy American vehicles in preference to those built by our international trading

partners, whereas it is very much our mission to make vehicles safer12. The analysis results in this

report are presented in a spirit of "here is what actually happened to vehicle sales," leaving readers

to judge by their own values if the outcome was favorable or not. That is a contrast to our safety

evaluations, where NHTSA most emphatically believes that the more lives saved, the better.

Third, the AALA is just one of many laws, regulations, international agreements and incentives

that may influence manufacturers' decisions on where to manufacture or source parts and

assemblies. Sections 1.2 and 1.3 will review those other measures. Although this evaluation will

demonstrate some significant trends in recent vehicle sales and parts content, it will in general not

attempt to assess how much of the trend, if any, is due to the AALA, and how much is due to

other measures or a carryover of earlier trends.

Evaluation questions: Here is a more detailed list of questions addressed by the evaluation.

• What has been the overall trend in the USCan parts content in new vehicles during model

years 1995-98, since AALA took effect? Has it increased or decreased? What factors have

been influential?

• Has there been a market shift in 1995-98 from vehicles assembled overseas to vehicles

assembled in North America (or vice-versa)?

• Have foreign-based companies changed the proportion of USCan parts since 1995 in the

"transplant" vehicles they assemble in North America?

• Have the Big 3 companies maintained the proportion of USCan parts since 1995 in their

vehicles?

• Did make-models that increased their proportion of USCan parts from one year to the next

experience a change in sales?

• How does the import-dependence trend in motor vehicles since AALA compare to the trends

in other consumer goods not regulated by AALA, such as radios or refrigerators?

• What percentage of new car purchasers have heard of, seen and read the AALA labels?

sourced parts as part of "U.S. Content", [sic] No revision of the AALA has been made since the

passage of NAFTA to change the counting methodology to a NAFTA basis."

rwww.ita.doc.gov/auto/aala.html as of November 17, 1999)

12Whereas the National Traffic and Motor Vehicle Safety Act of 1966 (Public Law 89-

563) declares that its purpose is "to reduce traffic accidents and deaths and injuries" when it

authorizes DOT to prescribe safety standards and carry out needed research, the AALA has no

corresponding statement of purpose and simply requires DOT to issue labeling requirements.
• What percentage understand the information on the labels? Do people know that the

numerical score includes the proportion of U.S. or Canadian parts, but not Mexican parts?

• How important is the country of origin of a vehicle or its parts to the average purchaser?

• Does the average purchaser know in what country his or her new vehicle was assembled?

• How large is the staunch "Buy American" market segment? What vehicles do they buy? Do

they use the labels to assist their purchasing decisions?

• Why have manufacturers moved production facilities or parts sourcing from overseas to North

America or vice versa? Were the AALA labels influential?

• What is the cost of the regulation to manufacturers?

• What guidance are manufacturers giving dealers about the AALA labels?

• What information are dealers giving purchasers about the AALA labels? Do sales staff

explain the labels or make them part of their sales presentation?

Chapter 2 of this evaluation is a statistical analysis of the sales, prices, USCan parts content and

assembly locations of new cars, pickup trucks, vans and SUVs during 1994-98. It tracks the

average USCan content and percent assembled in the U.S. or Canada, year-by-year, since AALA

took effect: for the entire new-vehicle fleet, and for subgroups such as Big 3, transplants, imports,

cars, pickup trucks, etc. Chapter 3 uses regression analyses to investigate if make-models that

increased USCan parts content from one model year to the next experienced a change in sales

different from make-models with unchanged or decreased USCan content. Chapter 4 analyzes

production, imports, exports, and U.S. sales in the motor vehicle industry and in other industries

unaffected by AALA, comparing import dependence in autos to other consumer products during

1992-98 - before and after AALA.

Chapters 5-8 document the methods and results of three surveys conducted in late 1998 to assess

the effects of the regulation: 1) a telephone survey of recent and potential purchasers of new

passenger cars, pickup trucks, vans and SUVs; 2) a letter survey of the Big 3 and foreign-based

manufacturers of these vehicles; and 3) a letter survey of new-vehicle dealers.

The "Discussion of Findings" that follows Chapter 8 assembles, compares and reconciles the

statistical and survey results to reach overall conclusions about the consumer response and

apparent impact of the AALA labels.

1.2 Other programs and factors influencing parts content and assembly locations

Since the 1960's, a series of laws, regulations, international agreements and incentives have

attempted to encourage the manufacturing of parts and vehicle assemblies in North America and

combat long-term worldwide economic trends that had been increasing imports into the United
States. These measures will now be discussed in more or less chronological order. One of the

most recent and important measures, which will be discussed separately in Section 1.3, is the 1995

U.S.-Japan Agreement on Autos and Auto Parts, which began shortly after the AALA labels and

was directly aimed at increasing North American parts content in transplant vehicles. The

Agreement, as well as the other measures and pre-existing trends described here, are no doubt

responsible for much if not all of the post-AALA increase of USCan parts content in transplant

vehicles noted in Chapter 2 of this evaluation.

Import dependence trends in the U.S. auto market The United States automobile market, up until

the 1970's, was dominated by the Big 3 automakers: General Motors, Ford and Chrysler. Imports

accounted for less than 10 percent of the market through 196913. After overseas countries

recovered from the devastation of World War II and developed new plants, they caught up with

U.S. technology while retaining a cost advantage. Imports rose steadily through 1972. However,

the petroleum crises of 1973-74 and 1979-80 greatly accelerated the trend because overseas

companies were ready to meet the demand of U.S. consumers for fuel-efficient vehicles while the

Big 3 had to retool quickly to produce smaller automobiles. This gave the foreign-based

manufacturers additional advantages in the cost and reliability of smaller automobiles. U.S.

imports of Japanese automobiles increased from 942 units in I96014 to 233,000 in 197015 and

2,000,000 by 198016. Foreign-based companies had gained consumer acceptance in the United

States and a persistent 20-30 percent share of the new-vehicle market. Even though fuel supplies

were again abundant in the 1980's and 1990's, and even though some overseas countries lost their

cost advantage relative to the United States, foreign-based companies were able to retain their

market share by expanding their production to larger cars and SUVs and, as we shall see, by

moving some of their manufacturing and purchasing to North America.

Voluntary Restraint Agreements The petroleum crisis of 1979-1980 and a subsequent business

recession in the United States during 1981-82 was followed by distress in the U.S. auto industry.

Production of motor vehicles fell 45 percent between 1978 and 1982, and industry employment

dropped by 39 percent, from 1,058,000 to 648,00017, while the Japanese import share of the U.S.

passenger car market rose from 9 percent in 1976 to 22 percent in 1981.

13MVMA Motor Vehicle Facts & Figures '78, Motor Vehicle Manufacturers Association,

Detroit, 1978, p. 18.

uMotor Vehicle Statistics of Japan, Japan Automobile Manufacturers Association,

Washington, 1984.

x% World Motor Vehicle Data, 1980 Edition, Motor Vehicle Manufacturers Association,

Detroit, 1980.

16United States Department of Commerce.

"Bureau of Labor Statistics, employment series for the "Motor Vehicle and Equipment"

industry (SIC 371).
The automobile industry and the labor unions sought relief from rapidly increasing imports,

initially without success. In June 1980, the Ford Motor Company and the United Auto Workers

filed a joint petition for relief from imports under section 201 of the Trade Act of 1974 with the

U.S. International Trade Commission (investigation No. TA-201-44). The petition claimed that

the U.S. auto industry was being substantially injured by imports. The Commission determined

that the industry was not injured. Next, momentum gained in 1981 for legislation to restrict

Japanese imports to 1.6 million units, but this too was not enacted.

However, on May 1, 1981, the Government of Japan's Ministry of International Trade and

Industry (MITI) announced a three-year Voluntary Restraint Agreement (VRA), limiting Japanese

auto exports to the United States to 1.68 million units during each of the first two years and to

about 2.02 million units in fiscal year 198418. On March 1, 1985, President Reagan announced

that the United States would not ask the Japanese Government to renew the VRA for 1985;

however, on March 28,1985, the Japanese Government announced that it would impose a limit on

annual auto exports to the United States to 2.3 million units. Japan reimposed this limit annually

until 1992, when it further reduced its quota to 1.65 million vehicles for the fiscal year ending

March 1, 199319. MITI announced in early 1994 (before the AALA and the U.S.-Japan

Agreement on Autos and Auto Parts took effect) that they would discontinue the limits20.

One important feature of the VRA that undoubtedly spurred the development of transplant

factories is that it only applied to vehicles assembled in Japan. Vehicles produced at transplant or

joint-venture factories located in the United States did not count toward the VRA, and the

Japanese companies were able to sell as many vehicles from these facilities as they wished.

Thanks to transplants, Japanese companies eventually could sell as many vehicles as American

consumers wanted without even coming close to the limits set by the VRA.

The first transplants and joint ventures The first transplants and joint ventures involved European

countries and were at least partly motivated by currency values and local incentives (to be

discussed below). Production of automobiles in the United States by foreign-owned

manufacturers began with the start-up of Volkswagen of America's plant in Westmoreland,

Pennsylvania in 1978. Currency exchange rates made production less costly in the United States

than in West Germany. In 1988, following the rebound of the dollar, Volkswagen closed this

factory. In late 1980, Renault of France acquired 46.6 percent of American Motors Corporation

(AMC). Renault and AMC jointly designed a car that was produced at the AMC Kenosha,

Wisconsin assembly plant.

18

 At a later date, MITI announced a unilateral restriction of exports of vehicles such as

four-wheel-drive station wagons and "jeep" type vehicles to the United States (82,500 units) and

Puerto Rico (70,000 units).

l9U.S. Industrial Outlook 1994, U.S. Department of Commerce, International Trade

Administration, Washington, 1994, p. 35-9.

20Maskery, Mary Ann, "Japanese Offer Slight Hike in Parts Buying," Automotive News,

April 4, 1994, p. 48.

8
Japan's entrance into the market through U.S. automobile production facilities followed in 1982.

Honda of America Manufacturing, Inc. began producing passenger cars at its new plant in

Marysville, Ohio and expanded operations in 1989 with another plant in East Liberty, Ohio. In

1989, Honda began manufacturing engines and suspensions at it plant in Anna, Ohio, where it had

been manufacturing motorcycles since 1979. In 1999, Honda announced "Honda Manufacturing

of Alabama" a new company that will produce engines and an SUV or a minivan (or both) at a

new plant in Lincoln, Alabama beginning in 2002.

Pressure for domestic-content legislation In the early 1980's, as imports from Japan increased and

Japanese automakers opened manufacturing facilities in the United States, there was concern by

the U.S. auto and auto parts industry that foreign-nameplate automobiles have more local content.

Legislation was introduced in Congress to require minimum local content by automakers. In

1981, the United Automobile Workers (UAW) launched a campaign to achieve legislation

requiring that automakers selling more than 100,000 cars per year in the United States be required

to include minimum domestic content percentages in parts and labor. Although none of these bills

were enacted, their mere discussion could have influenced foreign-based manufacturers to

increase production in the United States.

Three basically identical bills (S.707, H.R. 1234, and H.R. 4115), all subtitled the "Fair Practices

in Automotive Products Act," were introduced in 1983 in the 98th Congress to "establish domestic

content requirements for motor vehicles sold or distributed in interstate commerce in the United

States." They called for a U.S. Automobile Industry Advisory Council within the DOT to assist

in formulating a strategy to increase the domestic production of automotive products for sale and

distribution in interstate commerce. The bills provided for a membership of five consumer

representatives on such council.

The bills set forth for all motor vehicle manufacturers which produce over 100,000 motor vehicles

for ultimate retail sale in the United States "minimum domestic content ratios" (the domestic

value, including labor and parts, of the manufacturer's production costs of all automotive

products sold in the United States). The bills established penalties for a vehicle manufacturer who

failed to meet the minimum domestic content ratio beginning with the first model year following

January 1, 1984. The penalties would reduce imports of vehicles and auto parts by the percentage

point difference between the manufacturer's actual and required domestic content.

The bills required all such manufacturers to provide information to the DOT for the purposes of

administering this requirement. They required the DOT and the Federal Trade Commission to

study the effectiveness and impact of this legislation on the purchase of auto parts, and on

employment at dealerships. The bills allowed the Secretary of Transportation to terminate the Act

if the Secretary found that injuries to domestic industries had been prevented or remedied.

Finally, the bills required the DOT to appoint a government task force to study the impact of

currency exchange rates on vehicle manufacturers and the sale of automotive products.

In 1985, the House of Representatives bill H.R. 1050 was introduced in the 99th Congress, (but

not enacted into law), also called the "Made in America Act." The bill proposed to limit the

quantity of imported motor vehicles to 15 percent of the number of motor vehicles (domestic and
foreign) sold in the United States during the prior year, as determined by the Department of

Commerce (excluding motor vehicles imported by U.S.-based automobile manufacturers from

their Canadian subsidiaries). The bill imposed civil penalties for violations of the import

restrictions. The bill required the Secretary of Commerce to report annually to Congress on the

impact of this Act, and to terminate the limitations after December 31, 1990 if injury to the

domestic industry had been prevented or remedied.

A wave of transplants and joint ventures Starting in 1983, the other Japanese manufacturers

followed Honda in establishing transplant factories, or they began to enter into joint ventures with

the Big 3. General Motors and Toyota signed a Memorandum of Understanding to build a

subcompact car at a former GM plant in Fremont, California. In 1984, New United Motor

Manufacturing, Inc. (NUMMI) was formally established as a 50-50 joint venture and began

passenger car production. In 1991, NUMMI expanded production to pickup trucks, all of which

are sold by Toyota.

In 1983, Nissan opened a plant in Smyrna, Tennessee, to build pickup trucks. Nissan expanded

production to passenger cars in 1985 in Smyrna, and began engine production at the plant in

1989. In 1997, Nissan Powertrain Assembly began production of engines and transaxles in

Dechard, Tennessee to supply its cars and trucks.

In 1987, AutoAlliance International, Inc., a joint venture between Mazda and Ford, announced

the purchase of a Ford manufacturing facility in Flat Rock, Michigan, and began production of

passenger cars. Ford increased its 25 percent share in Mazda to 33.4 percent in 1996, and a

former Ford executive was named president of Mazda.

In 1988, Toyota opened a car manufacturing plant in Georgetown, Kentucky. In 1989-1991,

Toyota expanded production in Kentucky with axles and engines, and since then added minivan

production. In 1998, Toyota Motor Manufacturing, Indiana, Inc. began production of full-sized

pickup trucks in Princeton, Indiana, and expanded to SUVs. The same year, Toyota Motor

Manufacturing, West Virginia, Inc. began production of engines at its new plant in Buffalo, West

Virginia. Production of transmissions will be added at this plant in 2001.

In 1988, Diamond-Star Motors Corporation, a joint venture between Mitsubishi and Chrysler

(who owned 24 percent of Mitsubishi), began production of passenger cars in BloomingtonNormal, Illinois. In 1995, Mitsubishi purchased Chrysler's share in Diamond-Star Motors and

became the sole owner.

In 1989, General Motors of Canada, Inc. and Suzuki Motor Corporation of Japan began

production of a passenger car in Ingersoll, Canada, which offered Suzuki the opportunity to

access the North American market.

In 1989, Subaru-Isuzu Automotive, a joint venture of Fuji Heavy Industries and Isuzu Motors

Limited (GM owned 34.2 percent of Isuzu) began production of passenger cars and a pickup

truck in Lafayette, Indiana. GM increased its ownership of Isuzu to 37.5 percent. In 2000,

10
DMAX Ltd., a GM and Isuzu joint venture, 60 percent owned by Isuzu, will produce engines in

Moraine, Ohio.

The consolidation trend continued into the 1990s when Daimler-Benz and Chrysler merged, Ford

Motor Co. acquired Volvo's car division, General Motors purchased 50 percent of Saab, Ford

purchased Jaguar, and BMW took over Rover. In 2000, DaimlerChrysler purchased 34 percent

of Mitsubishi Motors.

Special rules for trucks The Big 3 have long held a higher market share for pickup trucks and

vans than for passenger cars. While consumer preference for Big 3 trucks is a factor, longstanding regulations concerning the import of trucks should also be considered. These rules could

have influenced Japanese manufacturers to transplant the production of pickup trucks to the

United States, more so than SUVs.

In 1962, the United States accused the European Community of unfairly restricting imports of

American poultry at the request of the West German poultry industry. Partly because American

imports of Volkswagen vans from West Germany were close in dollar value to the lost sales of

American chickens exported to Europe, the United States retaliated in 1963 by imposing a 25

percent duty on imports of light trucks21 - the so-called "chicken tax." Prior to this proclamation,

imported trucks had been subject to a tariff of 8.5 percent (and cars, 2.9 percent). The 25 percent

tariff has been retained in some form even though the poultry dispute was resolved long ago.

During the 1970s, Japanese manufacturers could avoid the 25 percent tariff by shipping cabchassis units without the cargo bed, which were assessed a 4 percent import duty. In the United

States, a bed was attached to the chassis. However, on May 20, 1980, the Treasury Department

ruled that cab-chassis units were trucks for the purposes of tariff classification, and were subject

to the 25 percent tariff rate. By then, nearly all imported trucks came from Japan.

Another opportunity for avoiding the 25 percent tariff hinged on the definitions of "trucks" and

"passenger vehicles." Subaru installed two seats in a cargo bed and Customs classified the hybrid

vehicle as a passenger car with a 2.9 percent tariff rate. In 1987, however, the Isuzu Trooper II

four-wheel-drive SUVs imported from Japan were held by Customs officials in U.S. ports while

they were stripped of rear seat belts and factory installed carpet in the cargo area. Customs

import specialists determined that the Trooper II would have been classified as a passenger car

under Isuzu's allocation in the Japanese VRA. The switching of classification by cosmetically

altering a passenger car and truck to circumvent the automobile VRA came under increasing

scrutiny by Customs officials.

On February 16, 1989, the Treasury Department announced that vans with rear side windows and

at least one rear door plus front and rear passenger seats were to be classified as passenger

vehicles subject to a 2.5 percent duty. This ruling was to prevent manufacturers from

cosmetically changing the classifications of vehicles. SUVs were also classified as passenger

vehicles if they had four doors. The new ruling eased the import of vans and SUVs (with four

^Presidential Proclamation 3564.

11
doors) into the United States while maintaining a high tariff on conventional pickup trucks. As of

1998, few pickup trucks, but large numbers of SUVs are imported into the United States from

overseas. As explained above, Nissan and Toyota invested heavily in plants in the United States

to build pickup trucks; Mazda and Isuzu sell Big 3-built pickup trucks under license; and

Mitsubishi phased out the sale of pickup trucks in the United States.

Incentives The enacted or proposed Federal measures discussed so far spurred transplants

indirectly, by regulating imports. However, State and local incentives packages that entail tax

abatements, infrastructure improvements and employee training have directly encouraged foreign

automakers' investment in U.S. manufacturing facilities.

Today, incentives have tripled since 1978 when Pennsylvania gave Volkswagen an incentive

package of $86 million to locate in a region that was seriously affected by economic downturns.

Tennessee followed with similar packages for Nissan, as did Kentucky for Toyota, and Ohio for

Honda. In 1992, BMW received $150 million to locate a plant in Spartanburg, South Carolina,

where it builds passenger cars and the new Sport Activity Vehicle. In 1993, Mercedes Benz

received commitments from Alabama of $253 million for its plant in Tuscaloosa, Alabama, where

it builds the M-Class SUV. In 1999, Alabama gave a an incentive package of $158 million to

Honda to build a new plant in Lincoln, where it will produce minivans or SUVs, or both.

Effects of currency fluctuations Movements in the value of foreign currencies against the dollar

significantly affected the decisions of automakers to relocate manufacturing facilities worldwide.

Fluctuations in currency exchange rates between the yen and the dollar influenced the shift of

foreign-owned production facilities to the United States in the later 1980s.

With the dollar strong and the Japanese yen weak until the mid-1980s, production of automobiles

in Japan was cheaper than in the United States. At that time, the Japanese automobiles built in

Japan and exported to the United States enjoyed a cost advantage of roughly $2,000 when

compared to a similar U.S.-built auto. Much of this cost advantage is attributed to currency

exchange and manufacturing costs.

After 1985, the yen appreciated significantly and operations in the United States held a cost

advantage over producing automobiles in Japan and exporting to the United States. Once the

cost advantage of producing in the United States was established, the number and scope of

foreign-owned operations accelerated. Japanese parts suppliers invested heavily in the United

States and relocated to supply the transplant operations. The movement of parts manufacturers to

supply the transplant operations has effectively removed foreign-owned manufacturers from the

vagaries of currency fluctuations and insulated the automakers and auto parts suppliers from

losses attributed to currency swings. Thus, the 1980's decisions to move operations to the United

States have a strong momentum of their own, and were not easily reversed even when the yen

weakened.

The yen's fall in value relative to the dollar since mid-1995 (from a high of 80 yen to the dollar in

mid-1995 to nearly 150 yen/dollar in mid-1998) means that Japanese vehicles and parts imported

into the U.S. are once again less expensive, and Japanese auto manufacturers resumed importing

12
somewhat larger numbers of vehicles, but without reducing their large production of transplants.

In the last few years, an economic turnaround in Japan and a stronger yen encouraged Japanese

manufacturers to continue investing in the United States.

Opportunities in Mexico All Big 3 automakers and many leading U.S. automotive parts suppliers

have manufactured in Mexico for a long time, but exports from Mexico to the United States have

only surged in recent years. In the mid- to late 1970s, Big 3 automakers faced increased

competition from Japanese automakers and opened production-sharing operations in Mexico to

take advantage of the maquiladora program. A maquiladora is a factory that assembles a

product in Mexico from mostly U.S. components and exports most of the assembled product back

to the United States. The 1989 Maquiladora Decree (initially called the Border Industrialization

Program when it began in 1965) allowed for the duty-free importation of foreign merchandise into

Mexico on a temporary basis, where it is assembled, manufactured or repaired and then exported

either to the country of origin or to a third country, and allowed for 100 percent foreign

ownership. U.S. automotive manufacturers and auto parts suppliers were among the leading

users of the maquiladoras, taking advantage of lower wage rates, lower overhead and utility

costs, and low transportation costs due to proximity to the United States. The maquiladora

program will formally end under the North American Free Trade Agreement (NAFTA), and

maquiladoras will operate in the same manner as any other Mexican firm by January 1, 2001.

Exchange rate fluctuations further encouraged automakers to step up operations in Mexico. The

devaluation of the Mexican peso on international currency markets in December 1994 and the

subsequent slump of the Mexican economy in 1995 resulted in a drop in U.S. exports of

automobiles and automotive parts to Mexico, but it had the opposite effect on U.S. imports from

Mexico. A healthy economy in the United States enabled automotive producers in Mexico to

increase their exports to the U.S. The recent stabilization of the peso along with increased

consumer confidence in Mexico is expected to lead to more joint ventures between U.S. and

Mexican automotive parts suppliers as they seek to modernize their plants, and presumably,

increase exports of autos and auto parts to the United States.

On January 1, 1994, the North American Free Trade Agreement was implemented. NAFTA

provides for the elimination of tariff and most nontariff barriers over a 10-year period. NAFTA

extends to Mexico the agreements made by Canada and the United States in 1965 and 1989 (see

below). NAFTA has enabled U.S. automotive producers to increase and rationalize their

manufacturing facilities in Canada and Mexico, improving their productivity and profitability.

Specifically, pickup trucks assembled in Mexico were no longer subject to the 25 percent tariff,

and could profitably be sold in the United States. Manufacturers have responded by adding

plants in Mexico and increasing capacity. Foreign automakers, such as Volkswagen which has a

plant in Puebla, Mexico, supply largely to the North American market.

Benefits of "globalization" Even aside from tariffs, import restrictions, currency fluctuations,

State incentives, etc., foreign-based manufacturers have intrinsic economic and marketing reasons

to set up transplant factories in North America and to increase the content of North American

parts in their transplant vehicles. Transportation costs can be saved by assembling vehicles where

the customers are and obtaining parts and raw materials close by where the vehicles are

13
assembled. Production in the customers' country enables the foreign-based company to become

more familiar with local consumer preferences, draw on local engineering and marketing knowhow, and produce a more saleable vehicle. For example, the 1998 Toyota Sienna minivan,

produced at the Georgetown, Kentucky plant and based on the Camry platform that is very

popular in the United States, has far outsold its predecessor, the imported Previa. Transplant

enterprises help the companies draw on local sources of credit and eases entry into joint ventures

with North American companies. By becoming more "global," the foreign-based manufacturers

hope to grow and become profitable. This is a long-term, persistent trend.

U.S.-Canada trade agreements It is appropriate to conclude this section with an overview of the

trade agreements that fostered a special relationship between the U.S. and Canadian automotive

industries, with massive exchanges of vehicles and parts. The U.S.-Canada Automotive Products

Trade Act of 1965 (APTA) was aimed at expanding automotive trade between the U.S. and

Canada by granting duty-free treatment to imports between the United States and Canada for

specified motor vehicles and parts for use as original equipment in the manufacture of these motor

vehicles. Direct investment expenditures on plant and equipment in Canada by the Canadian

affiliates of GM, Ford, and Chrysler increased substantially after the APT A became effective.

On January 1, 1989, the U.S.-Canada Free Trade Agreement (CFTA) became effective, retaining

the duty-free provisions of APTA. Under the agreement, all qualifying trade between the United

States and Canada would be free of duty as of January 1, 1998, and the 10-year phase-in of

staged duty reductions for all tariff barriers would be eliminated. In addition, the CFTA

addressed concerns of U.S. automakers by disallowing foreign auto companies from assembling

cars in Canada using Canadian auto parts, then shipping duty-free to the U.S. The agreement also

established a bilateral panel to assess the state of the North American automotive industry and to

propose public policy measures and private initiatives to improve the competitiveness of the

industry in domestic and foreign markets. The United States and Canada are one another's

principal trading partners, and much bilateral trade is generated by intracompany shipments by

General Motors, Ford and Chrysler. As was discussed above, NAFTA has now extended the

special relationship to Mexico, but only in the last few years.

1.3 The U.S.-Japan Agreement on Autos and Auto Parts

So far, we have discussed measures and trends that preceded the AALA by up to 25 years,

spurred the growth of transplant factories, and somewhat indirectly or implicitly boosted the

USCan parts content of the transplants. Now let us consider one measure that nearly coincided

with the AALA and quite explicitly called for higher USCan parts content in transplants.

On June 28, 1995, the United States and Japan signed the U.S.-Japan Agreement on Autos and

Auto Parts, a five-year comprehensive agreement covering all aspects of bilateral automotive

trade - motor vehicles, automotive parts, and Government of Japan regulation of the automotive

aftermarket. The agreement was intended to address difficulties experienced by U.S. firms in

accessing Japan's vehicle distribution system, eliminating regulations on the automobile parts

aftermarket in Japan, and improving opportunities for U.S. original equipment parts suppliers in

Japan, and with Japanese transplants in the United States.

14
As part of the Agreement, the United States negotiated 17 objective criteria to evaluate progress

in the three main areas addressed in the negotiations. Three criteria specifically pertain to market

access for original equipment parts:

(1) Japanese vehicle manufacturers in Japan and their transplants are to broaden suppliers'

opportunities through design-in and supplier outreach programs, localization of R&D, and

transparency in purchasing practices. The goal is to ensure that new suppliers in the United States

will have access to the market for parts procurement by the Japanese automakers and their

transplants. New suppliers will be given the opportunity to obtain business at the "design-in

phase" and transplant R&D, engineering, and procurement facilities are located in the United

States.

(2) Japanese vehicle manufacturers and Japanese transplant vehicle manufacturers must make an

effort to purchase parts without discrimination against suppliers based on capital affiliation. The

goal of this is to ensure that U.S. parts suppliers are not discriminated against with respect to

parts procurement when they sell to Japanese transplants.

(3) Japanese vehicle manufacturers must make an effort to change the extent of local parts

sourcing, considering data on purchases of parts made in the United States and vehicle production

by Japanese transplant vehicle manufacturers in the United States.

The U.S. Government established an Interagency Enforcement Team to monitor progress under

the Agreement. The Team is co-chaired by the Department of Commerce and the Office of the

U.S. Trade Representative. The Team has relied heavily upon the numerical scores on the AALA

labels to track the USCan content of transplant and import vehicles produced by Japan-based

companies. They have also used data from the U.S. Customs Service, the Japanese Automobile

Manufacturers Association and various U.S. manufacturer associations for this purpose at times.

On April 18, 1997, the Interagency Enforcement Team issued a report to the President evaluating

progress under the agreement22. Results stated that, "measured by parts purchasing data supplied

by the Japanese Automobile Manufacturers Association, purchases of U.S.-made parts by the

transplants rose by slightly over 6 percent in value in the first half of JFY 199623, to an annual rate

of $18.4 billion. Taking into consideration a decline in transplant production, this rate represents

a rebound from 1995 levels. Based on American Automobile Labeling Act (AALA) calculations,

the North American parts content of U.S.-produced Japanese vehicles rose from a productionweighted 47.6 percent in model year 1995 to 52.4 percent in model year 1997. The Japanese

automakers continue to make progress in implementing their 1995 global business plans. In the

United States, these companies are expanding the production of passenger cars, light trucks, and

22Report to President William Jefferson Clinton of the Interagency Enforcement Team

Regarding the U.S.-Japan Agreement on Autos and Auto Parts, U.S. Department of Commerce

and the Office of the U.S. Trade Representative, Washington, 1997.

23Japanese Fiscal Year, ending March 31, 1996.

15
major components, such as engines and transmissions-thereby creating sales opportunities for

U.S. parts suppliers and increasing employment of U.S. workers."24

The 1997 report indicated that a survey conducted by four major U.S. parts associations

(Automotive Parts and Accessories Association, Automotive Service Industry Association, Motor

and Equipment Manufacturers Association, and Specialty Equipment Market Association), show

continued modest growth in U.S. original equipment (OE) suppliers' business with Japanese

transplants in North America. Forty percent of the firms responding that attempt to sell to

transplants characterize their progress as "significant" or substantial," 25 percent as "modest,"

and 35 percent as "limited" or "none." These statistics show an improvement over the assessment

level from a previous survey in 1996. In addition, the results of the survey indicated that fewer

than 3 percent of the respondents expect sales in both the United States and Japan to decline,

while more than half of the remaining 97 percent expect business to grow. The remaining

respondents expect sales to Japanese transplants to account for about 16 percent of their total OE

sales by 1999, up from 14 percent in 1996.

On August 12, 1998, the Interagency Enforcement Team issued the fifth semi-annual monitoring

report to the President regarding the U.S.-Japan automotive agreement.25 The report noted that

in Japan fiscal year 1997, investment by the Japanese automakers in new production facilities in

the United States has displaced automotive imports from Japan, creating tens of thousands of jobs

for U.S. workers, and increasing the purchases of U.S. auto parts by Japanese transplants by 10

percent. Imports of parts from Japan continued to decline, largely due to Japanese transplants

substituting auto parts imported from Japan with U.S. parts, according to the report.

The report stated that the Japanese transplant levels of USCan content have increased significantly

from 47.6 percent in MY 1995 to 59.4 percent in MY 1998, using AALA data.26 These

percentages agree closely with the findings of our own evaluation (see Section 2.4, "True

Transplants").

The report included a presentation of domestic and foreign auto parts purchases by Japanese

automakers in Foreign Trade Zones (FTZ). Foreign Trade Zones are areas under U.S. Customs

supervision located in the United States that are considered outside the customs territory of the

United States for tariff purposes. Every passenger vehicle plant in the United States is located in

an FTZ. Products entering the U.S. customs territory after assembly in an FTZ can be assessed

duty rates in one of several ways in order to obtain the most favorable duty treatment on parts

incorporated into the finished product. Foreign Trade Zone regulations by the U.S. Department

^Report to President William Jefferson Clinton (1997), pp. 6, 30.

2:'Report to President William Jefferson Clinton of the Interagency Enforcement Team

Regarding the U.S.-Japan Agreement on Autos and Auto Parts, U.S. Department of Commerce

and the Office of the U.S. Trade Representative, Washington, 1998.

26

 The weighted average calculations include averaging both North American-built and

overseas-built vehicles of the same carline.

16
of Commerce require that automakers report the value of parts shipped into the FTZ from U.S.

locations ("domestic status inputs"), as well as the value of parts imported from foreign countries

("foreign status inputs") annually to the Commerce Department. These data on Japanese

automakers' reports on domestic status inputs are used to monitor trends in the purchases of U.S.

parts by Japanese transplants, and to estimate the percentage of domestic content of Japanese

transplant production. It should be noted that FTZ data tend to overstate the value of domestic

content as they include parts imported from Canada under the APTA/CFTA and parts imported

into the United States under normal customs procedures and then shipped to the FTZ.

FTZ data indicate that domestic content of transplant vehicles grew from 57.1 percent in United

States fiscal year (FY) 1992 to 61.8 percent in FY96. FTZ data also show that the value of

domestic purchases by the seven Japanese transplant automakers increased by 84.4 percent from

$9.0 billion in FY92 to nearly $16.6 billion in FY96.

The report also noted that data from the Japanese Automobile Manufacturers Association show

an increase in Japanese purchases of U.S. original equipment automotive parts from $16.4 billion

in JFY95 to $18.92 billion in JFY97.

A major finding in Chapter 2 of this NHTSA evaluation report (as well as in the Interagency

Enforcement Team report discussed here) is that USCan content increased substantially in the

transplant vehicles of Japanese-based companies from 1995 to 1998, subsequent to the nearly

simultaneous implementation of the AALA and the Trade Agreement. Under the circumstances,

it is virtually impossible to quantify how much of the effect should be attributed to the AALA

labels, how much to the Trade Agreement, and how much to the continuing effect of earlier

measures and trends described in Section 1.2. Nevertheless, the strong, explicit terms of the

Trade Agreement and the current near absence of consumer interest in the numerical scores of the

AALA (see Section 6.6) intuitively suggest that the Trade Agreement has had more direct effect

than the AALA labels. Furthermore, a major shift in production or parts-sourcing cannot be

implemented overnight. The response of the Japanese-based companies in 1995-98 must, to some

extent, already have been in the planning stages for some time. That suggests the earlier measures

were influential, too. Ironically, even though the numerical scores on the AALA labels have so

far been of little direct use to consumers, they have been quite useful to the Interagency

Enforcement Team that monitors progress under the Trade Agreement.

1.4 AALA requirements

The American Automobile Labeling Act was part of the Department of Transportation and

Related Agencies Appropriation Act for Fiscal Year 1993, P.L. 102-388. The AALA provides

that all new passenger cars (regardless of weight), certain small buses, and all trucks and

multipurpose passenger vehicles with a gross weight rating (GVWR) of 8,500 pounds or less,

manufactured on or after October 1, 1994, bear labels providing information about the value of

the USCan and other parts content of each vehicle.

The AALA amends Title II of the Motor Vehicle Information and Cost Savings Act (Cost

Savings Act) by adding a new section 210. On July 5, 1994, the President signed a bill (P.L. 103-

17
272) which revised and codified "without substantive change" the Cost Savings Act. The content

labeling provisions, which formerly existed as section 210 of the Cost Savings Act, are codified at

49 U.S.C. § 32304, Passenger motor vehicle country of origin labeling. On July 21, 1994, the

National Highway Traffic Safety Administration (NHTSA) published in the Federal Register (59

FR 37294) a new regulation, 49 CFR Part 583, Automobile Parts Content Labeling, to implement

the American Automobile Labeling Act.

Section 32304, "Passenger Motor Vehicle Country of Origin Labeling" requires passenger motor

vehicles27 manufactured on or after October 1, 1994 to be labeled with information about the

countries of origin of vehicles and parts. The purpose of the section is to enable consumers to

take this information into account in deciding which vehicle to purchase.

The following presents the AALA as it was in effect during model years 1995-98, the time frame

of this evaluation report.28 Section 32304 (b) requires each new passenger motor vehicle to be

labeled with the following five items of information:

1) The percentage USCan equipment (parts) content;

2) The names of any countries29 other than the U.S. and Canada which individually contribute

15 percent or more of the equipment content, and the percentage content for each such

country;

3) The final assembly place by city, state (where appropriate), and country;

4) The country of origin of the engine; and

5) The country of origin of the transmission.

Section 32304 (b) specifies that the first two items of information, the equipment content

percentages for the U.S./Canada and other countries, are calculated on a "carline" basis rather

than for each individual vehicle. The term "carline" refers to a name of a group of vehicles which

has a degree of commonality in construction, e.g., body, chassis.

27The term "passenger motor vehicle," defined in section 49 U.S.C. 32101 as a motor

vehicle with motive power, designed to carry not more than 12 individuals, was amended for

purposes of section 32304 to include any "multipurpose passenger vehicle" and "light duty truck"

that is rated at not more than 8,500 pounds gross vehicle weight rating or less. Thus, the motor

vehicle content labeling requirements apply to passenger cars, pickup trucks, SUVs, vans, and

small buses up to 8500 GVWR. Motorcycles are excluded.

28On July 28, 1999, NHTSA published in the Federal Register (64 FR 40777) a final rule

amending the regulation implementing the AALA. These changes are described in Section 1.7 of

this evaluation, "Recent amendments to the AALA."

29If there are more than two such countries, only the names of the two countries providing

the greatest amount of content need be listed.

18
Manufacturers of passenger motor vehicles are required to establish the required information

annually for each model year, and are responsible for the affixing of the label to the vehicle.

Dealers are responsible for maintaining the labels.

The AALA information "may be either part of the Monroney price information label required by

15 U.S.C. 1232, part of the fuel economy label required by 15 U.S.C. 2006, or a separate label.

A separate label may include other consumer information" (49 CFR Part 583.5).

In order to calculate the information required for the label, the vehicle manufacturer must know

certain information about the origin of each individual part or component used to assemble its

vehicles. For example, in order to calculate the information for the first item of the label, i.e., the

percentage of the value of the motor vehicle equipment installed on passenger motor vehicles

within a carline which originated in the U.S./Canada, the manufacturer must know the USCan

content of each individual part or component.

The statute specifies that suppliers of passenger motor vehicle equipment must provide

information about the origin of the equipment they supply. For purposes of determining the

USCan origin for the first item on the label, the statute provides different procedures depending

on whether equipment is received from an allied supplier (a supplier wholly owned by the

manufacturer, or, in the case of a joint venture assembly arrangement, any supplier wholly owned

by one member of the joint venture arrangement) or an outside supplier (a non-allied supplier of

passenger motor vehicle equipment to a manufacturer's allied supplier, or anyone other than an

allied supplier who ships directly to the manufacturer's final assembly point).

For equipment received from outside suppliers, section 32304 (a) (9) (A) provides that the

equipment is considered USCan if it contains at least 70 percent value added in the U.S./Canada.

Thus, any equipment that is at least 70 percent USCan is valued at 100 percent USCan, and any

equipment under 70 percent is valued at zero percent. This statutory provision is sometimes

referred to as the "roll-up, roll-down" provision.30 For equipment received from allied suppliers,

section 32304 (a) (9) (B) provides that the actual amount of USCan content is used.

The statute requires the Department of Transportation to promulgate regulations implementing

the content labeling requirements. Section 32304 (d) requires the promulgation of regulations

which specify the form and content of the required labels, and the manner and location in which

30The "roll-down" portion of the Act was eliminated under section 7016 (d) (1) (C) of

TEA-21. While equipment from an outside supplier that is at least 70 percent USCan is still to be

valued at 100 percent USCan, any equipment under 70 percent is valued, and must be reported, to

the nearest five percent. For example, 38 percent would be reported to the manufacturer as 40

percent, rather than zero as under current law. NHTSA issued a final rule on July 28, 1999 (64

FR 40777) amending the regulation to be consistent with the revised Act, effective June 1, 2000.

However, during the period in which this evaluation was conducted the Department of

Transportation had not yet amended 49 CFR § 583.6 and § 583.10 to conform to the amended

AALA; the elimination of the "roll-down" portion and the subsequent amended procedures for

calculating USCan parts content did not affect our surveys.

19
the labels must be affixed. Section 32304 (e) requires promulgation of such regulations as may be

necessary to carry out the labeling requirements, including regulations to establish a procedure to

verify the required labeling information. That section also directs that such regulations provide

the ultimate purchaser of a new passenger motor vehicle with the best and most understandable

information possible about the USCan or other origin of the equipment of such vehicles without

imposing costly and unnecessary burdens on the manufacturers. Finally, section 32304 (e) also

specifies that the regulations include provisions requiring suppliers to certify whether their

equipment is of U.S., USCan, or other origin.

On July 21, 1994, the National Highway Traffic Safety Administration published in the Federal

Register (59 FR 37294) a final rule establishing a new regulation, 49 CFR Part 583, Automobile

Parts Content Labeling, to implement the American Automobile Labeling Act. The regulation

established requirements for: 1) manufacturers of passenger motor vehicles; 2) suppliers of motor

vehicle equipment used in the assembly or passenger motor vehicles; and 3) dealers of passenger

motor vehicles. A summary of the requirements is set forth below.

Requirements for manufacturers of passenger motor vehicles Vehicle manufacturers are required

to affix to all new passenger motor vehicles a label which provides the following information:

1) USCan Parts Content31 - the overall percentage, by value, of the passenger motor vehicle

equipment that was installed on vehicles within the carline of which the vehicle is part, and

that originated in the United States and/or Canada.

2) Major Sources of non-USCan Parts Content ~ the names of the two countries, if any,

other than the United States and Canada which contributed at least 15 percent of the

average overall percentage, by value, of the passenger motor vehicle equipment installed

on vehicles within the carline of which the vehicle is part, and the percentage attributable

to each such country (if there are more than two such countries, the manufacturer need

only provide the information for the two countries with the highest percentages).

3) Final Assembly Point — the city, state (in the case of vehicles assembled in the United

States), and country of the final assembly point of the passenger motor vehicle.

31For the past several years, NHTSA has provided a limited, temporary provision in the

§ 583.6 (c) (6) content calculation procedures to give a vehicle manufacturer added flexibility in

making content determinations in those instances in which outside suppliers have not responded

to the manufacturer's requests for content information. In order to conform Part 583 with section

7106 (d) (4) NHTSA removed the time limitation in the amended final rule (64 FR 40777)

published July 28, 1999. In the changed regulation, if a manufacturer or allied supplier requests

information in a timely manner from one or more of its outside suppliers concerning the USCan

content of particular equipment, but does not receive that information despite a good faith effort

to obtain it, the manufacturer or allied supplier may make its own good faith value added

determinations, for no more than 10 percent, by value, of a carline's total parts content from

outside suppliers. The amended regulation was not in effect at the time of the surveys.

20
4) Country of Origin for the Engine Parts32 33

- the country of origin of the passenger motor

vehicle's engine.

5) Country of Origin for the Transmission Parts — the country of origin of the passenger

motor vehicle's transmission.

The label is also required to include a statement below this information reading as follows:

Note: Parts content does not include final assembly, distribution, or other non-parts costs.

Manufacturers are permitted, but not required to provide at the end of the note the following

additional statement for carlines assembled in the U.S. and/or Canada, and another country:

This carline is assembled in the U.S. and/or Canada, and in [insert the name of each other

country]. The USCan parts content for the portion of the carline assembled in [insert name of

country, treating the U.S. and Canada together, i.e., U.S./Canada] is

[ ]%. 3 4

The information for items 1) and 2) of the label is calculated, prior to the beginning of the model

year, for each carline. The information for items 3), 4), and 5) is determined for each individual

vehicle. However, the country of origin for groups of engines and transmissions is determined

once a model year.

Vehicle manufacturers are to calculate the information for the label, relying on information

provided to them by the suppliers. Under the final rule, manufacturers and allied suppliers are

required to request their suppliers to provide the relevant content information specified in Part

583, and the suppliers are required to provide them the specified information in response to such

requests. The vehicle manufacturers are required to maintain records of the information used to

determine the information provided on the labels.

32NHTSA amended 49 CFR § 583.5 so that the wording of the vehicle content label would

no longer use the terms "Engine Parts" and "Transmission Parts." It would instead use the terms

"Engine" and "Transmission." The changes did not affect the study since they were not in effect

at the time during which the study was conducted.

33NHTSA amended 49 CFR § 583.8, procedure for determining country of origin for

engines and transmissions, according to section 7106 (d) (1) (A). Assembly and labor costs

incurred for the final assembly are now to be included in making country of origin determinations

for engines and transmissions. The changes did not affect the study since they were not in effect

at the time during which the study was conducted.

34In order to conform to new requirements in section 7106 (d) 2, NHTSA added to §

583.5 an additional option permitting manufacturers to voluntarily identify USCan parts content

based on the country in which the vehicle was assembled.

21
For each year, manufacturers shall submit to the Administrator of the National Highway Traffic

Safety Administration three copies of the information required by §583.5 (a) to be placed on a

label for each carline. The information for each carline shall be submitted not later than the date

the first vehicle of the carline is offered for sale to the ultimate purchaser.

For model year 1995 vehicles and model year 1996 vehicles which are offered for sale to ultimate

purchasers before June 1, 1995, manufacturers and suppliers may, instead of following the

detailed calculation procedures set forth in the regulation, use procedures that they expect, in

good faith to yield similar results.

Manufacturers of passenger motor vehicles are required to establish the required information

annually for each model year, and are responsible for the affixing of the required label to the

vehicle.

In the final rule, NHTS A excluded all final stage manufacturers,35 as well as businesses that

produce a total of fewer than 1,000 passenger motor vehicles for sale in the United States

annually from providing items 1 and 2 of the label (the two items that are determined on a carline

bases). However, these manufacturers are required to provide items 3, 4, and 5 of the label.

Requirements for suppliers of motor vehicle equipment For any equipment that an outside

supplier (a supplier not wholly owned by the vehicle manufacturer) supplies to a vehicle

manufacturer, a supplier wholly owned by the vehicle manufacturer (an allied supplier) or, in the

case of a joint venture vehicle assembly arrangement, a supplier that is wholly owned by one

member of the joint venture arrangement, the outside supplier is required to provide, at the

request of that manufacturer or allied supplier, the following information:

1) The price of the equipment to the manufacturer or allied supplier;

2) Whether the equipment has, or does not have, at least 70 percent of its value added in the

U.S. and Canada;

3) For any equipment for which the USCan content is less than 70 percent, the country or

origin of the equipment (treating the U.S. and Canada together);

4) For equipment for which the USCan content is less than 70 percent, the country of origin

of the equipment (separating the U.S. and Canada).

For any equipment that an allied supplier supplies to a vehicle manufacturer, the supplier is

required to provide, at the request of the manufacturer, the following information:

1) The price of the equipment to the manufacturer;

2) The percentage USCan content of the equipment;

3) The country of origin of the equipment (treating the U.S. and Canada together);

4) For equipment that may be used in an engine or transmission, the country of origin of the

equipment (separating the U.S. and Canada).

35Final stage manufacturer means a person who performs such manufacturing operations

on an incomplete vehicle that it becomes a completed vehicle.

22
A supplier of engines and transmission is, in addition to the above requirements, required to

provide, at the request of the vehicle manufacturer, the country of origin for each engine or

transmission it supplies to the manufacturer, in the form of a certification. Outside suppliers that

directly supply to allied suppliers are required to provide the specified information and

certification directly to the allied suppliers. Suppliers are also required to maintain records of the

information used to compile the information provided to the manufacturers and outside suppliers.

The requirements apply only to suppliers which supply directly to the vehicle manufacturer or to

an allied supplier. No requirements are imposed on suppliers earlier in the chain, e.g., a company

which supplies an item of equipment to an outside supplier which then supplies it to a vehicle

manufacturer.

Requirements for dealers of passenger motor vehicles Dealers are required to maintain the label

on each vehicle until the vehicle is sold to a consumer. Dealers may temporarily remove separate

content labels (but not if they are part of the Monroney price sticker label or the fuel economy

label) for purposes of test drives or for moving vehicles in intra-dealer exchanges if each of the

following conditions is met:

1) The manufacturer advises that the label can be removed and replaced without damage;

2) The dealer removes the label immediately before each test drive or replaces it immediately

before moving a vehicle in an intra-dealer exchange and replaces it immediately after such

move;

3) The dealer advises the person taking the test drive about the existence of the label and

offers the opportunity to inspect the label (either on or off the vehicle).

Dealers are not specifically required to have brochures or posters explaining the AALA labels, or

to discuss the labels in sales presentations, or to provide any AALA-related information to

consumers other than the labels themselves.

Certifications and records NHTSA permits certifications and other records to be submitted and

retained electronically. The agency believes that this is consistent with the approach taken by the

Federal government in related areas, and with requirements to establish regulations that avoid

imposing unnecessary and costly burdens on the manufacturer. Manufacturers are required to

maintain records for five years after December 31 of the model year to which the records relate.

Suppliers are required to maintain all records which form the basis for the information it provides

on the certificates including, but not limited to, calculations of content certificates from suppliers,

and relevant information from manufacturers and suppliers. Suppliers must maintain records for

six years after December 31 of the calendar year set forth in the date of each certificate.

On September 15, 1995, NHTSA published in the Federal Register (60 FR 47878) a revised final

rule making several changes to the final rule in response to petitions for reconsideration of the

agency's July 1994 final rule implementing the statute. The revised final rule will reduce the

burdens associated with making content calculations and will also result in more accurate

information. The amendments made by the rule were effective October 16, 1995. NHTSA made

the following changes in the final rule:

23
1) If a supplier used material in producing passenger motor vehicle equipment which was

produced or assembled in the U.S. or Canada, the supplier will subtract from that material,

any value that was not added in the U.S. or Canada. The suppler can make a good faith

estimate of the value that was not added in the U.S. or Canada. This can be based on

information available to the supplier, e.g., information in its records, information it can

obtain from its suppliers, the supplier's knowledge of manufacturing processes, etc.

Suppliers cannot simply default to zero.

2) The supplier shall consider the amount of value added and the location in which that value

was added:

(a) From the time the supplier received the material back to and including two earlier

stages where the material was changed into a new and different product with a different

name, character, and use.

(b) The value of materials used to produce a product in the earliest of these two stages

will be treated as value added in the country in which that change occurred.

Recent amendments to the AALA As part of the NHTSA Reauthorization Act of 1998, Congress

amended the AALA to make a number of changes in the labeling requirement. This Act is part of

the Transportation Equity Act for the 21st Century (TEA-21), signed on June 9, 1998. These

changes did not take effect during the 1995-98 time frame of this evaluation and are not reflected

in any of the analyses of this report, but they could affect the findings if similar analyses were to

be conducted in the future:

Section 7106 (d) (1) (A) of TEA-21 amends the AALA to specify that assembly and labor costs

incurred for the final assembly of engines and transmissions are to be included in making the

country of origin determination. Section 7106 (d) (1) (B) amends the definition of final assembly

place. Section 7106 (d) (1) (C) amends the AALA to eliminate the "roll-down" portion of the

provision. While equipment from an outside supplier that is at least 70 percent USCan is still to

be valued at 100 percent USCan, any equipment under 70 percent must be reported to the nearest

five percent. Section 7106 (d) (2) amends section 32304 (d) of the AALA to provide that a

manufacturer's vehicle content label may include a line identifying the country in which the vehicle

assembly was completed. The full text of TEA-21 and the conference report is available on the

Web at http://www.fhwa.dot.gov/tea21.

1.5 Dissemination of AALA information

Neither the AALA nor the NHTSA regulation requiring the labels include any stipulation for

disseminating this information to the public other than the labels themselves. As of 2000, NHTSA

and other Federal agencies have not issued any brochures comparing AALA information by makemodel, or placed such information on their Web sites. Compilations of AALA data were

published in the Automotive News Market Data Book, a trade publication, in 1995 and 1996, but

not in subsequent years. Unlike crash test results and fuel economy ratings, for example, they

have not been published in popular journals such as Consumer Reports, Car and Driver, etc. Nor

is NHTSA aware of their publication in the literature of non-Government organizations that

promote the consumption of products made in the United States.

24
Several foreign-based manufacturers have advertised extensively that their vehicles are assembled

in the United States and/or contain large proportions of U.S. parts. In particular, two

manufacturers reported to NHTSA in our survey that they used brochures, newspaper ads,

magazine ads, and/or television ads to advertise that they purchase parts and materials from U.S.

suppliers, invest in U.S. manufacturing plants, and contribute to the U.S. economy in the form of

direct jobs, and donations to charitable groups and educational organizations.

However, these two manufacturers did not explicitly state the percentage of domestic content in

their vehicles in their media ads. NHTSA is not aware of any manufacturer that used AALA

statistics to demonstrate an edge over their competitors (comparable to Audi's advertising that

they had the best results on NHTSA's crash tests).

In 1994, the same two manufacturers produced brochures that presented sample parts content

labels. Both brochures were critical of the government's methodology for counting parts and

combining Canadian with United States parts in the numerical score. The two manufacturers

found that none of their customers were interested in the label and they discontinued distribution

of the consumer guides.

Chapter 6 of this report investigates, through a consumer survey, the current level of consumer

awareness of the existence of the labels and the extent to which they understand the information

on the labels and find it useful.

In this context, it should also be noted that country-of-assembly information was available to

consumers before the AALA, but not necessarily in a standardized and conveniently accessible

form like the AALA labels. Since model year 1981, the country of assembly can be decoded from

the Vehicle Identification Number (VTN), but it is safe to say that few consumers would know

how to decode it. The country of assembly is quite commonly specified on the Monroney price

sticker, but it is not required there by law. It is often listed, but not mandatory, on the

manufacturers' certification label (49 CFR Part 567) that is permanently affixed to the vehicle,

usually on the rear edge of the driver's door. It may be assumed that few consumers peruse these

certification labels before they buy vehicles. In recent years, organizations that supply information

about passenger vehicles via the Internet often specify the country of assembly.

25

CHAPTER 2

TRENDS IN U.S./CANADIAN CONTENT AND ASSEMBLY, 1995-98

United States/Canadian (USCan) parts content, as specified in the labels placed on new vehicles in

accordance with the American Automobile Labeling Act (AALA) did not rise during model years

1995-98. In fact, it declined from an average of 70 percent in model year 1995 passenger cars

and light trucks, the first year of the labels, to an average of 67.6 percent in model year 1998.

The principal reason for the overall decline was a reduction of USCan content - and a

corresponding increase in Mexican parts content - in Big 3 cars and light trucks. But there were

substantial gains in USCan content among the "transplant" vehicles. Similarly, the proportion of

vehicles sold in the United States that were assembled in the United States or Canada declined

from 82 percent in model year 1994 to 80 percent in 1998, primarily because more Big 3 vehicles

are being assembled in Mexico.

These statistical analyses of this chapter, as well as Chapters 3 and 4, just aim to describe what

actually happened to vehicle sales. They are not designed to identify cause-and-effect

relationships or to attribute any of the observed sales trends specifically to AALA or to other

regulations or international agreements.

2.1 The data base for studying U.S./Canadian content trends

Each manufacturer is required to notify NHTSA of the information that goes on the parts-content

labels for each of their lines of passenger cars, pickup trucks, sport utility vehicles (SUV) and

vans manufactured on or after October 1, 1994.l These letters, kept on file by NHTSA's Office

of Vehicle Safety Compliance provide information on the USCan content of virtually every 1995-

98 make-model in each model year. Phone calls to manufacturers filled the handful of gaps in the

letters.

Several details about the labels are relevant. Automotive News and, possibly, other sources

printed summaries of the label information for model years 1995 and 1996. There are a number

of discrepancies between these listings and the official letters to NHTSA: in every case, this

evaluation relies on the letters. The principal quantitative datum on the label is the percentage of

the vehicle's parts and components that are of USCan origin; as explained in Section 1.4, labor

and assembly are not included in the computation. The labels contain various data in addition to

the percent of USCan parts, but none of the other data are considered in this chapter. Since the

data on final assembly, engine and transmission only list countries by name, and do not specify

what percent derives from each country, they are not suitable for quantitative analyses such as

year-to-year computation of fleetwide averages. The percentage of parts from countries other

than the United States or Canada is only reported for those countries that contributed at least 15

lCode of Federal Regulations, Title 49, General Printing Office, Washington, 1998, Part

583.

27
percent of the parts. Without data on contributions lower than 15 percent, it is impossible to

calculate accurate fleetwide averages. In particular, it is impossible to measure the substantial

increase in Mexican parts content that undoubtedly took place in Big 3 vehicles during 1995-98,

since few models achieved more than 15 percent Mexican content.

Manufacturers are allowed certain leeways in computing the percentage of USCan parts value.

As explained in Section 1.4, manufacturers could simplify the calculation for certain outsidesupplied parts, counting them as 100% or 0% USCan ("roll-up" or "roll-down"), and they had

permission to use "good-faith" estimates rather than calculations on up to 10 percent of the value

of outside-supplied parts when these suppliers did not furnish data on the origin of the parts (and

in model year 1995 they had permission to use "good faith" estimates for any information not

provided by suppliers). Consequently, the USCan content percentages are estimates rather than

exact numbers, and at least some of their year-to-year variation could be due to the estimation

procedures.

New-vehicle sales or registration data by make-model and model year are needed to obtain

fleetwide averages of USCan content. The analyses of this chapter are based on registration data

from the New Car and Light Truck File that R. L. Polk supplies to NHTSA. The file counts how

many new vehicles were registered in each month, by make-model, subseries and model year. It

traces the registrations for vehicles of a specific model year, say 1995, from the time in 1994

when they were first offered to the public until the end of 1996 (1997 for trucks), by which time

nearly all of them had been cleared from the dealers' lots. The sum of all these monthly initial

registrations over the 3 or 4 year period is essentially equal to the total sales of that make-modelMY in the United States. Polk data from calendar years 1993 through June 1999 were available

as of March 2000 and used to tally the MY 1994-98 registrations. (To the extent that about 1

percent of MY 1998 production was still unsold or unregistered as of July 1, 1999, the MY 1998

registrations are underreported by about 1 percent.)

The advantage of these registration data is that they can be made to correspond exactly to the

information in the AALA letters. In both cases, the "model year" is the "production" model year,

identified by the 10th character of the Vehicle Identification Number (\TN) and written on titles

and registrations. Likewise, an exact correspondence was established between the make-model

definitions in the AALA letters and on the Polk files. Those definitions were mapped into pairs of

four-digit numerical codes as shown in Appendix A. The codes are similar to the ones used in

earlier NHTSA evaluations2 and indicate the specific make-model and the more general car/light

truck group to which the make-model belongs.

The registration data were also compared to production data for model year 1995-98 passenger

cars that the manufacturers have supplied to the Environmental Protection Agency for computing

Corporate Average Fuel Economy (pursuant to 40 CFR 86.085-37). They specify the number of

vehicles produced for sale in the United States during a production model year. When the Polk

2Kahane, C.J., Relationships between Vehicle Size and Fatality Risk in Model Year 1985-

93 Passenger Cars and Light Trucks, NHTSA Technical Report No. DOT HS 808 570,

Washington, 1997, Appendix B.

28
registration data and the manufacturer-supplied data did not agree (in 6 percent of the makemodel-year combinations), we used the manufacturer-supplied data.

To compute average USCan content for the entire fleet, or a subset, it makes more sense to take

value-weighted rather than sales-weighted (or registration-weighted) averages. For example, if

the fleet consists of one $20,000 car with 100 percent USCan content and one $80,000 car with 0

percent USCan content, the value-weighted average is

(100%xlx20,000 + 0%xlx80,000) / (1x20,000 + 1x80,000) = 20 percent

whereas the sales-weighted average is

(100%xl + 0%xl) / (1 + 1) = 50 percent

Surely, the value-weighted average better expresses, in economic terms, the share of USCan parts

in the total fleet. (Registration-weighted overall averages are also shown in Section 2.2, for

comparison purposes.)

In order to compute value-weighted averages, it is necessary to have price as well as sales

(registration) data by make-model and model year. Price data for model years 1994-98 are all

taken from Automotive News Market Data Books, annual publications that list the current model

year prices as of approximately April 1. These prices are defined the same way, year after year,

except that destination charges were added starting in 1997, a one-time increase on the order of 2

percent. We used the lowest price listed for each make-model, the "base sticker price." This is

not necessarily the same as the [unknown] average actual sales price: it excludes premiums for

higher-priced subseries (especially for pickup trucks and luxury cars) or optional equipment, but it

also excludes discounts that consumers received. Thus, the value-weighted averages will only be

approximately, not exactly, accurate.

Statistics on vehicle assembly countries, although unnecessary for the analysis of average USCan

parts content, provide useful supplemental information. Several data sources were used to

estimate for each make-model and model year (1994-98) the percent of vehicles sold in the United

States that were assembled in the United States, Canada, Mexico or overseas. The majority of

make-models had all their vehicles assembled in just one country in any given year. In makemodels where some units were assembled in one North American country and the remainder in

one overseas country, the Automotive News sales data and/or the Polk registration data usually

identify the percentage for each country. However, those two sources do not distinguish between

United States, Canadian and Mexican assemblies. "VTNs, on the other hand, specify the country of

assembly. State crash data for calendar year 1997 from eight States that report the VTN and send

their files to NHTSA - Florida, Maryland, Missouri, New Mexico, North Carolina, Ohio,

Pennsylvania and Utah - show the distribution of assembly locations among crash-involved MY

1994-97 vehicles. These distributions are assumed to be approximately correct for overall U.S.

registrations. Distributions for MY 1998 are estimated based on 1997 registrations and 1998

production, as in the following example:

29
Assembled 1997 1997 1998 1998 U.S. Registrations

In U.S.Regs Production Production Unadjusted3 Adjusted4

United States 82% 59,212 57,989 80.31 81%'o

Mexico 18% 35,987 37,789 19.00 19%

A data base was generated for all make-models of passenger cars, pickup trucks, SUVs and vans

with a gross vehicle weight rating (GVWR) or 8,500 pounds or less, for model years 1994-98,

stating the USCan content on the AALA label (MY 1995-98 only), the model year registrations,

the base sticker price, and the percent of U.S.-sold vehicles assembled in the United States,

Canada, Mexico and overseas. It is listed in Appendix A. As stated above, many of the numbers

are approximate rather than exact. But the data set is complete and has no missing data.

2.2 Overall trends in U.S./Canadian parts content and assembly locations

The principal finding of this analysis is that value-weighted average USCan parts content declined

from 70.01 percent in new MY 1995 cars and light trucks, the first year of the labels, to 67.64

percent in MY 1998. USCan content was 71.77 percent in 1996 and 68.10 percent in 1997:

All new passenger cars, pickup trucks, SUVs and vans

(8,500 pounds GVWR or less)

Value-Weighted Averages

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

14.37 M

15.61

13.60

15.05

14.73

Avg Base

Sticker Price

$ 18,385

19,328

19,706

21,055

21,741

Approximate

Total Value

$ 221.3 B

257.0

233.3

275.6

278.9

Value-Weighted Avg.

USCan Parts Content (%)

•

70.01

71.77

68.10

67.64

3

80.31 = (57,989/59,212) x 82; 19.00 = (37,789/35,987) x 18

4

81 = 80.31 / (80.31 + 19.00); 19 = 19.00 / (80.31 + 19.00)

30
1994

1995

1996

1997

1998

U.S./Canada

82.0

80.1

82.3

80.2

80.1

U.S.

69.7

66.8

68.0

68.1

67.4

Percent Assembled in

Canada

12.2

13.2

14.3

12.2

12.7

Mexico

1.7

2.3

3.5

3.5

3.4

Overseas

16.3

17.6

14.1

16.2

16.4

The percentage of new vehicles assembled in the United States or Canada declined from 82 in

1994, just before the labels, to 80 in 1998. The strongest trend during 1994-98, at least in relative

terms, was the doubling of Mexican assemblies. Overseas assemblies declined from 16.3 percent

in 1994 to 14.1 percent in 1996, but had recovered to 16.4 percent by 1998. United States and

Canadian assemblies did not change much from 1994 to 1998.

Overall registrations were stable (some of the year-to-year fluctuation is due to variation in the

length of the "production" model year). The average base sticker price increased 4 percent a

year, from $18,385 to $21,741. However, the larger than usual (6.8%) increase from 1996 to

1997 is primarily due to the inclusion of destination charges in the base sticker price in

Automotive News Market Data Books starting in 1997.

The initial impression from these aggregate statistics is that the introduction of the labels in 1995

was not followed by a massive increase in US Can parts content nor a massive shift from overseas

to U.S./Canadian assembled vehicles, on the contrary, both had declined by 1998. However,

these initial findings need to be confirmed by more detailed analyses of segments of the

automotive market and a comparison of trends in motor vehicles and other consumer products.

Trends are essentially the same if the data are registration-weighted rather than value-weighted.

The registration-weighted average USCan content and assembly are 1-2 percentage points higher

in each year than in the value-weighted data because the high-priced imports are given less weight

here. However, the net decline in USCan content from 1995 to 1998 is 2.2 percentage points,

similar to the trend in the value-weighted data.

Registration-Weighted (Not Value-Weighted) Averages

Percent Assembled in

Model

Yei"

1994

1995

1996

1997

1998

USCan Parts

Content (%)

71.77

73.26

69.98

69.53

U.S./Canada

84.8

83.1

85.0

83.4

83.2

Mexico

2.2

3.1

4.2

4.0

4.1

Overse

13.0

13.8

10.8

12.6

12.7

31
The remaining analyses of this chapter are all based on value-weighted averages for USCan

content.

2.3 "Big 3" vs. foreign-based nameplates

One way to segment the automotive market is to compare vehicles bearing the nameplates of the

"Big 3" domestic corporations, General Motors, Ford or Chrysler, regardless of who designed or

assembled them5, and vehicles with nameplates of foreign-based corporations6, regardless of

where they were built. The data analyzed in this report all precede the DaimlerChrysler merger.

Here are the relative market shares for the Big 3 and foreign-based nameplates in model years

1994-98, including all cars and light trucks, based on the model-year registrations as listed in the

data base in Appendix A (not value-weighted):

Big 3

Foreign-based nameplates

1994

73.3

26.7

1995

72.5

23.5

Market Shares (%)

1996

73.5

26.5

1997

71.4

28.6

1995

70.0

30.0

Clearly, the introduction of the labels in 1995 was not followed by an immediate or subsequent

shift from foreign-based nameplates to the Big 3. Now let's look at the trends in USCan content

and assembly location separately for Big 3 and foreign-based nameplate vehicles:

Big 3

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

10.54 M

11.32

10.00

10.75

10.31

Avg Base

Sticker Price

$ 17,319

18,009

18,785

20,003

20,782

Approximate

Total Value

$ 160.1 B

182.0

168.7

194.5

193.7

Percent Assembled in

Value-Weighted Avg.

USCan Parts Content («5

•

89.19

87.64

85.28

83.98

'The "Big 3 nameplates" include any car or light truck sold as a Chrysler, Dodge,

Plymouth, Eagle, Jeep; Ford, Lincoln, Mercury; Buick, Cadillac, Chevrolet, Geo, Oldsmobile,

Pontiac, Saturn or GMC, regardless of whether it was assembled in North America ("domestic")

or overseas ("captive import").

^'Foreign-based nameplates" in this report include any car or light truck sold as a VW,

Audi; BMW; Nissan, Infiniti; Honda, Acura, Jaguar; Mazda; Mercedes-Benz; Porsche; Saab;

Subaru; Toyota, Lexus; Volvo; Mitsubishi; Suzuki; Hyundai; Kia; Isuzu; or Land Rover,

regardless of whether it was assembled in North America ("transplant") or overseas ("import").

32
1994

1995

1996

1997

1998

U.S./Canada

97.6

97.1

96.1

95.6

96.1

U.S,

81.8

79.5

77.5

79.5

79.1

Canada

15.8

17.6

18.6

16.1

17.0

Mexico

1.9

2.5

3.7

3.8

3.5

Overseas

.5

.4

.2

.6

.4

Foreign-based Nameplates

Model

Year

1994

1995

1996

1997

1998

1994

1995

1996

1997

1998

Total

Registrations

3.84 M

4.29

3.60

4.31

4.42

U.S./Canada

40.9

38.7

45.8

43.3

43.9

Avg Base

Sticker Price

$21,175

22,532

22,150

23,577

23,922

Approximate

Total Value

$61.2B

74.9

63.6

81.1

85.1

Percent Assembled in

U.S.

38.1

36.1

42.8

40.7

40.9

Canada

2.9

2.6

3.0

2.6

3.0

Value-Weighted Avg.

USCan

Mexico

1.3

1.9

3.0

2.9

3.2

Parts Content (%)

•

23.42

29.64

26.90

30.45

Overseas

57.7

59.4

51.2

53.8

52.9

These statistics reveal the pattern that will appear repeatedly. Big 3 vehicles, starting from a high

USCan parts content in 1995 (89.19%), steadily lost USCan content in subsequent years and had

dropped to 83.98 percent by 1998. Vehicles sold by foreign-based companies substantially gained

USCan content, from 23.42 percent in 1995 to 30.45 percent in 1998, but even then they were

still far below the USCan parts content of the Big 3.

Shifts in assembly locations parallel the USCan parts content trends. Big 3 cars and trucks

dropped from 97.6 percent U.S. or Canadian assembly in 1994 to 96.1 percent in 1998, while

Mexican assemblies increased from 1.9 to 3.5 percent (well under 1% of Big 3 sales are "captive

imports" assembled overseas). Foreign-based nameplate vehicles increased from 40.9 percent to

43.9 percent assembly in the United States or Canada, and from 1.3 percent to 3.2 percent in

Mexico. Their overseas assemblies fell from 57.8 to 52.9 percent. Basically, Big 3 cars became

less U.S./Canadian and more Mexican, while import-brand cars became substantially more

U.S./Canadian and/or more Mexican, but less Japanese and German.

33
2.4 "Domestics" vs. "transplants" vs. "imports"

A more complex market segmentation takes into account where the vehicle was designed and

assembled as well as who sold it. Three large groups are "true domestics," designed by the Big 3

in North America, assembled by Big 3 plants in North America and sold by the Big 3; "true

transplants," designed overseas, assembled in North America in plants owned in whole or in part

by foreign-based corporations, and sold with foreign-based nameplates; and "true imports,"

designed and assembled overseas and sold with foreign-based nameplates. Some make-models,

however, do not fit into these categories but into one of six smaller groups. These groups and

their USCan content trends will be discussed one-by-one, but first let us look at their relative

market shares in MY 1994-98:

Big 3 nameplates

"True domestic"

Internat'l design, Big 3 factory

Internat'l design, transplant factory

"Captive import"

Foreign-based nameplates

Big 3 design & factory

"True transplant"

Part-time transplant

Mexican transplant

"True import"

1994

68.0

2.3

2.5

.5

1.1

15.2

.4

.4

9.6

Market Shares ((

1995

66.9

2.7

2.4

.5

.6

14.5

.6

.6

11.1

1996

69.6

1.4

2.4

.2

.8

15.0

.3

.8

9.7

Vo)

1997

66.4

3.0

1.6

.4

.6

15.7

.3

.8

11.2

199?

65.9

2.9

1.1

.2

.6

16.9

.4

.9

11.3

Market shares did not change dramatically for the three large categories. True domestics more or

less held their own, first gaining from 68.0 to 69.6 but eventually falling back to 65.9 percent of

all motor vehicle registrations. True transplants gained some market share, from 15.2 percent to

16.9 percent. True imports gained from 9.6 percent to 11.3 percent in 1998 - a boom year for

luxury vehicles.

"True domestics" include the many make-models that most people consider pure Big 3. They

have to be designed by the Big 3 in North America; in this age of multinational corporations and

the "international car" it is hard to say who designed what, but at least they are not obvious copies

of vehicles initially designed overseas. They can be assembled in the United States, Canada or

Mexico, but at plants owned by the Big 3. They carry Big 3 nameplates. Most Big 3 vehicles -

Dodge Caravan, Mercury Grand Marquis and Buick LeSabre to name just a few - are true

domestics. These models can be expected to have the highest USCan content, and indeed they

do:

34
Model

Year

1994

1995

1996

1997

1998

Total

Registrations

9.78 M

10.44

9.46

10.00

9.70

Avg

Base Sticker

Price

$ 17,659

18,383

19,018

20,289

21,024

True Domestics

% USCan Content

Avg

•

90.64

88.78

86.70

85.17

Min

70

70

60

60

Max

96

96

96

95

% Assembled

US/Can M

98.7

98.4

97.1

96.9

97.2

in

exi<

1.3

1.6

2.9

3.1

2.8

USCan parts content started at 90.64 percent in 1995, and although it had fallen substantially to

85.17 percent by 1998, that is still a lot higher than the average for any of the other eight groups

Although the labels usually shed no light on where the decrease is going, it is safe to speculate

that much of it went to Mexico during those years of the North American Free Trade Act

(NAFTA) and, before that, the maquiladora1 movement (see Section 1.2). Still, among all the

individual make-models here, USCan content was never lower than 60 percent, and it ranged as

high as 96 percent. Most of the models were closer to the high end, as evidenced by the average.

(Mercury Villager, the only make-model as low as 60 percent, was designed by Ford in

cooperation with Nissan, contains many Japanese components, and is almost on the borderline

between "true" domestics and the next category.) Mexican assembly of these vehicles likewise

increased from 1.3 to 2.8 percent; specifically, the Dodge Ram Pickup, GM Suburban and

Dodge/Plymouth Neon were assembled in Mexico in large numbers, other make-models in smaller

numbers.

"International" design cars built in Big 3 factories and sold with Big 3 nameplates include the

high-volume Ford Escort/Mercury Tracer and the Chrysler Sebring Convertible. Escort and

Tracer were originally based on the Mazda Protege design, but the cars sold in the United States

during 1994-98 were all built at Ford plants in the United States or Mexico and are, in many

ways, more Fords than Mazdas. The Sebring Convertible is fundamentally a Mitsubishi sold by

Chrysler; however it is assembled at a Chrysler plant in Mexico, not a Mitsubishi plant. These

make-models can be expected to have less USCan content than "true" domestics, due to a

combination of Japanese and Mexican influences (results for MY 1996 are anomalous because

Ford Escort had a short production run in that model year):

7A maquiladora is a factory that assembles a product in Mexico from mostly U.S.

components and exports most of the assembled product back to the United States. By agreement

between the two countries, the movement of components and assembled products is duty-free.

35
International Design; Big 3 Assembly; Big 3 Nameplate

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

.33 M

.43

.19

.44

.42

Avg

Base Sticker

Price

$ 9,323

9,971

13,893

13,350

13,662

%

Avg

•

79.15

70.49

72.80

64.92

USCan Content

Min

75

50

45

40

Max

80

85

80

80

% Assembled in

U.S.

65.9

59.7

28.9

71.5

71.0

Mexi<

34.1

40.3

71.1

28.5

29.0

USCan parts content has ranged from 70 to 85 percent in Escort and Tracer, but only from 40 to

50 percent in Sebring Convertible. The average was 79.15 percent in 1995, before the Sebring

Convertible existed, but it has fallen to 64.92 percent. Additional information on the labels

indicate both Japanese and Mexican content: Japanese engines and/or transmissions on some

Escorts and Tracers, Japanese and Mexican engines on Sebring Convertible, and Mexican and/or

Japanese content in excess of 15 percent in some model years.

"Transplant" vehicles sold with Big 3 nameplates form a cohesive group that includes the Geo

Prizm, designed by Toyota and built by New United Motor Manufactures, Inc. (NUMMI) the

GM-Toyota joint-venture plant located in Fremont, California; Geo Metro and Tracker, designed

by Suzuki and built by CAMt, a joint venture between General Motors of Canada and Suzuki

Motor Corp. located in Ingersoll, Ontario; Ford Probe, designed by Mazda and built by AutoAlliance International, a Ford-Mazda joint venture plant in Flat Rock, Michigan; and Chrysler

Sebring sedan, Dodge Avenger and Eagle Talon, designed by Mitsubishi and built at the Normal,

Illinois Chrysler-Mitsubishi joint-venture plant. These make-models can be expected to have less

USCan content than the preceding group:

International Design; Transplant Assembly; Big 3 Nameplate

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

.36 M

.38

.32

.24

.16

Avg

Base Sticker

Price

$11,277

12,412

12,805

13,668

14.294

%

Avg

56.45

56.96

54.29

61.21

USCan Content

Min

40

40

40

40

Max

72

72

65

73

% Assembled in

US/Can Mexico

100.

100.

100.

100.

100.

Although lower than the preceding groups, these vehicles still have a lot of USCan parts content.

They are the first indication in this report that transplants, unlike true imports, have a lot of

USCan parts. The U.S./Canadian value added to transplants goes far beyond mere assembly

labor.

36
"Captive imports" -i.e., cars designed and built overseas but sold in the United States by the Big 3

include Cadillac Catera, Ford Aspire, Mercury Capri, Dodge/Plymouth Colt, Dodge Stealth, and

Eagle Summit:

Captive Imports: International Design; Overseas Assembly; Big 3 Nameplate

Avg % USCan Content

Model Total Base Sticker

Year Registrations Price Avg Min Max

1994

1995

1996

1997

1998

.07 M

.08

.03

.06

.03

$ 11,932

10,701

9,307

24,143

30.635

5.00

5.00

3.62

4.00

5

5

3

4

5

5

5

4

Unlike all other vehicles with Big 3 nameplates, captive imports have very little USCan content.

Sales have dwindled in recent years. The large price increase in 1997 reflects the introduction of

Cadillac Catera.

Big 3 designed and built trucks sold with foreign-based nameplates are the reverse of the

preceding group. They include the Mazda Navajo and Pickup (which are essentially a Ford

Explorer and Ranger, respectively), the Nissan Quest (Mercury Villager) and the Isuzu Hombre

(GM "S/T" pickup). Since they are Big 3 vehicles produced in Big 3 plants (not joint venture or

transplant factories), they can be expected to have high USCan content. However, they only

account for a small proportion of foreign-based nameplate sales:

Big 3 Design; Big 3 Assembly; Foreign-Based Nameplate

Model

Year

1994

1995

1996

1997

1998

"True

Total

Registrations

.16M

.09

.10

.09

.09

transplants" are

Avg

Base Sticker

Price

$ 14,528

18,091

16,844

18,610

17,062

%

Avg

•

71.83

76.33

65.74

72.64

the highest-volume subgroup

USCan Content

Min

70

70

60

60

i of foreign-b.

Max

80

92

90

90

ised n

intuitively, the group that might have the greatest diversity of USCan content. They are designed

overseas, or at least at companies that are not the Big 3. They are primarily assembled in the

United States, Canada or Mexico at plants owned by foreign-based companies or jointly owned

with the Big 3. However, in some years, the company may import some units if, for instance,

demand exceeds North American production. But if imports account for over 35 percent of

registrations in any year, we will classify this make-model as a "part-time" rather than a "true"

37
transplant. At least part (usually all) of the North American assemblies are in the United States or

Canada; if all are in Mexico, we will classify the make-model as a "Mexican" rather than a "true"

transplant. They carry foreign-based nameplates. These models could have quite low USCan

content if they are little more than locally assembled kits of imported parts, but they could have

high USCan content if the manufacturer has brought over or locally developed in-house and

supplier parts operations:

True Transplants

Avg

Model Total Base Sticker

Year Registrations Price

1994

1995

1996

1997

1998

2.18M

2.27

2.03

2.36

2.49

$ 13,187

14,171

15,042

15,808

16,736

%

Avg

m

47.04

54.35

52.52

59.26

USCan Content

Min

25

30

40

40

Max

72

71

65

75

% Assembled in

No. Amer.

81.8

87.7

94.2

95.1

93.1

Overseas

18.2

12.3

5.8

4.9

6.9

Sales of true transplants increased, partly due to best-sellers such as Honda Accord and Toyota

Camry, and partly because new make-models such as Mercedes ML320, BMW Z3 and Toyota

Sienna joined the ranks.

USCan content increased quite substantially, from 47.04 percent in 1995 to 59.26 percent in

1998. At 75 percent, the USCan content of the 1998 Honda Accord was not much below the

average for true domestic vehicles (85.17%), and three times as high as the lowest make-model in

this group, the 1995 Toyota pickup (25%). However, most of the models are at an intermediate

level, well below the USCan content of Big 3 cars, yet containing U.S./Canadian value added far

beyond mere assembly labor. Many of the transplants have become more North American over

time, both in parts content and in the proportion assembled in the Western Hemisphere.

This increase of USCan parts in transplant vehicles since the inception of AALA is one of the

most important evaluation findings. Of course, it is inappropriate to conclude from these statistics

alone, in the absence of other evidence, that the AALA labels themselves "caused" the trend of

increasing USCan content in transplants. Many other factors, especially the U.S.-Japan

Agreement on Auto and Auto Parts, have been contributing to this trend (see Sections 1.2 and

1.3).

"Part-time transplants" are a small group of make-models that moved back and forth between

North American and overseas assembly, or that were produced half-and-half in both places,

including Suzuki Sidekick and Swift, Hyundai Sonata, VW Cabrio and Isuzu Amigo. Since their

production is not centered in North America, they have much lower USCan content, on the

average, than "true" transplants:

38
Part-Time Transplants

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

.06 M

.09

.03

.05

.06

"Mexican transplants"

Average

Base Sticker

Price

$ 11,041

13,257

14,569

15,175

15,508

include Volkswagen's

%

Avg

•

14.96

14.78

8.28

15.83

Jetta,

USCan Content

Min

5

5

2

1

Golf and New

Max

45

50

50

55

Beetle.

% Assembled in

North

America

36.7

20.3

33.7

37.9

53.8

Overs*

63.3

79.7

66.3

62.1

46.2

Sales more than

doubled in 1994-98. They resemble true transplants, except they are assembled exclusively in

Mexico, not in the United States or Canada:

Mexican Transplants (VW Jetta, Golf and New Beetle)

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

.06 M

.10

.11

.11

.14

Avg

Base Sticker

Price

$ 13,480

13,282

14,031

14,865

15 144

% USCan Content

Avg

•

10.00

15.00

9.07

10.35

Min

10

15

5

2

Mas

10

15

10

15

These models have far less USCan content than "true transplants." Additional information on the

labels suggests they contain large, fairly similar proportions of Mexican and German parts. The

labels also show a mix of Mexican and German engines. In other words, VW models assembled

exclusively in Mexico tend to contain Mexican parts, whereas true transplants assembled in the

United States or Canada contain U.S./Canadian parts. By contrast, Big 3 cars, even when they

are assembled in Mexico, still contain large percentages of U.S./Canadian parts.

"True imports" are designed overseas, assembled overseas (except a small proportion of Volvos

in Canada and 1995-96 BMW 300's in the United States) and carry foreign-based nameplates.

Since they include many luxury make-models, the average price is substantially higher than the

other groups. Sales grew in 1997-98 as the booming United States economy whetted appetites

for luxury cars and trucks:

39
Model

Year

1994

1995

1996

1997

1998

Total

Registrations

1.38 M

1.73

1.32

1.69

1.66

Avg

Base Sticker

Price

$29,417

29,683

29,694

30,919

31,320

True Imports

% USCan Content

Avg

#

4.12

4.74

4.54

3.91

Min

0

0

0

0

Max

20

20

15

15

% Assembled in

US/Can

.5

.8

.9

.3

.6

Overseas

99.5

99.2

99.1

99.7

99.4

USCan content is much lower than in transplants, averaging below 5 percent and rarely exceeding

10 percent in any individual make-model. Whereas foreign companies extensively manufacture or

purchase parts in the United States or Canada to put into the vehicles they assemble here, they do

not ship many USCan parts home, assemble them into vehicles and then ship the finished product

back to the United States.

By 1998, the USCan content of true transplants (59.26%) was substantially closer to true

domestics (85.17%) than to true imports (3.91%). In other words, the new-vehicle market

contains three important, quite distinct groups: domestics, which always had high USCan content,

but lost USCan content during 1995-98; imports, that have very low USCan content throughout

1995-98; and transplants, whose USCan content was midway between imports and domestics in

1995, but content gained substantially during 1995-98 and is now closer to domestics than

imports.

2.5 Cars vs. pickup trucks vs. SUVs vs. vans

There may be a perception that light trucks have higher USCan content than passenger cars, if

only because the Big 3 have a higher market share of light trucks than cars, and perhaps even

because consumers of light trucks place more value on "buying American" than car buyers. That

perception could lead to a belief that the market shift from cars to light trucks in recent years

ought to have increased average USCan content for the overall fleet.

The perception, however, is primarily true of pickup trucks and vans, not SUVs. Because the

market shift away from passenger cars is mainly to SUVs, not pickup trucks or vans, the effect of

this shift on net USCan content is small.

The growing popularity of SUVs is immediately seen in statistics on market shares. SUVs

increased from 11 to 18 percent of the new-vehicle market in just four years, while passenger cars

dropped from 58 to 53 percent. Pickup trucks captured close to 19 percent of sales each year,

and vans (with GVWR 8,500 pounds or less) 11 percent. Essentially, SUVs took the place of

passenger cars:

40
1994

Market Shares (%)

1995 1996 1997 1998

58.3

20.2

10.8

10.7

59

17

11

11

.7

.0

.6

.8

57.9

17.1

13.9

11.2

55.

19.

15.

9.

3

9

5

4

53.4

17.9

17.7

11.0

Passenger cars

Pickup trucks

SUVs

Vans

Passenger cars sold in the United States, by 1998, were about 58 percent Big 3 and 42 percent

import brands, the latter more or less equally divided between transplants and true imports. That

mix resulted in lower USCan content than pickup trucks, SUVs or vans:

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

8.37 M

9.32

7.87

8.33

7.86

Avg

Base Sticker

Price

$ 20,327

20,922

20,958

22,287

22,753

Passenger Cars

Avg %

USCan

Content

m

64.14

66.29

61.76

60.38

5/Car

75.5

74.0

77.5

75.8

73.9

% Assembled in

l Mexico C

2.6

3.1

3.6

3.1

3.6

)versi

21.9

22.9

18.9

21.1

22.5

USCan parts content decreased from 64.14 percent in MY 1995 to 60.38 percent in 1998.

During those years U.S./Canadian assembly also declined, but not nearly as much: from 75.5 to

73.9 percent. The decline in USCan content reflects primarily a reduction of USCan content in

Big 3 cars, and secondarily a shift from Big 3 cars to transplants and imports; it would have been

even greater if not for increased USCan content among transplants. Sales of passenger cars

decreased slightly.

Pickup trucks sold in the United States during 1994-98 were assembled 97-99 percent in North

America; each year 82-90 percent were Big 3 products. In other words, only 1-3 percent are true

imports. An important reason is that pickup trucks brought fully assembled into the United

States, except from Canada or, more recently, Mexico have long been charged a 25 percent tariff3

(see Section 1.2). That's given North America a historical advantage as place of assembly. It is

reflected in the high market share for the Big 3 and the high proportion of transplants among

trucks sold by foreign-based companies:

""Mission Impossible? AIADA Tackles 25% Truck Tariff," AIADA 's Showroom, Vol. 16,

No. 5, June/July 1999. In the 1994-98 time frame, the 25 percent tariff applies only to pickup

trucks imported from countries other than Canada or Mexico. Vans and SUVs are exempt.

41
Model

Year

1994

1995

1996

1997

1998

Total

Registrations

2.91 M

2.65

2.32

2.99

2.63

Avg

Base Sticker

Price

$11,302

12,397

13,015

14,286

14,433

Pickup trucks

Avg %

USCan

Content

*

83.33

83.36

83.55

83.09

% Assembled in

US/Can Mexico Overseas

95.6

95.1

92.4

92.1

92.3

1.0

1.9

5.8

6.8

7.3

3.5

3.1

1.8

1.1

.4

USCan content held its own as the Big 3 market share increased and overseas-assembled trucks

almost disappeared - and despite increasing production of Big 3 pickup trucks in Mexico.

Import-brand pickup trucks, both transplants and true imports, have lost sales since 1995. The

latest USCan content, 83.09 percent, is substantially higher than for passenger cars (60.38%).

SUVs are the growth market of the 1990's. Registrations increased by 67 percent from 1994 to

1998. They include a growing proportion of luxury models and since 1996 they have had a higher

average base sticker price than cars, pickups or vans. Sales have grown for models produced

throughout 1994-98 such as GMC Yukon, or for new models such as Ford Expedition that more

or less replaced existing models in a manufacturer's lineup, or for new models by manufacturers

that had just entered the SUV business, such as Mercedes ML320:

SUVs

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

1.56 M

1.80

1.88

2.33

2.61

Avg

Base Sticker

Price

$ 18,749

20,116

21,292

23,480

24.683

Avg %

USCan

Content

•

69.76

72.76

67.30

69.06

3/Car

84.6

79.6

81.6

75.3

78.5

% Assembled in

i Mexico C

1.5

4.0

4.1

2.4

)vers<

15.4

18.9

14.4

20.6

19.1

The USCan content and assembly trends of SUVs are much closer to those of passenger cars than

those of pickup trucks or vans. Those who perceive the SUV as a "Big 3 stronghold" are not

taking into account such highly successful imports as the Nissan Pathfinder, Toyota 4Runner and

RAV4 and Honda CRV or transplants such as Isuzu Rodeo and Honda Passport. USCan content

is not much higher than for cars and well below the levels for pickup trucks and vans. But it held

its own during 1995-98. Like cars, close to 20 percent are assembled overseas (SUVs are not

subject to the 25% tariff that applies to pickup trucks). Several Big 3 brands are now extensively

assembled in Mexico, further reducing USCan content and assembly. When the public substituted

SUVs for cars, they barely changed their domestic vs. transplant vs. import consumption patterns.

42
Vans have a level of USCan content and assembly comparable to pickup trucks. Even though

vans for passenger transport are not subject to the 25 percent tariff that applies to pickup trucks,

the Big 3 have kept a very high share thanks to a technological and marketing edge and

economies of scale. The vans in the data base include minivans (e.g., Plymouth Voyager, Ford

Windstar, Chevrolet Venture, Mazda MPV or Toyota Sienna) and full-sized vans with GVWR of

8,500 pounds or less (e.g., Dodge Ram Wagon and Van, Ford Econoline or GMC Savana):

Avg

Model

Year

1994

1995

1996

1997

1998

Total

Registrations

1.53 M

1.84

1.52

1.41

1.60

Base Sticker

Price

$ 16,575

17,614

18,555

19,994

20,048

Vans

Avg %

USCan

Content

85.70

84.79

81.09

80.42

% Assembled in

US/Can Mexico Overseas

96.6

95.2

96.4

95.6

97.7

3.4

4.8

3.6

4.4

2.3

Registrations were close to 1.6 million throughout 1994-98. USCan content started at 85.70

percent in 1995, even higher than pickup trucks, but it had declined to 80.42 percent by 1998.

Whereas the absolute numbers are comparable to those of pickups, the declining trend is similar to

cars. Average USCan content declined primarily because Big 3 vans had fewer USCan parts, not

because of a shift to transplants or imports. For example, USCan content in the Chevrolet

Venture/Olds Silhouette/Pontiac Trans Sport dropped from 95 percent in 1997 to 75 percent in

1998, while Mexican content increased to 17 percent.

2.6 Effect of within-group USCan content shifts vs. between-group market shifts

The overall USCan content of the new-vehicle fleet declined from 70.01 percent in MY 1995 to

67.64 percent in MY 1998, as shown in Section 2.2. The next sections enumerated four factors

that appear to be driving overall USCan content:

• A trend toward less USCan content within true domestic vehicles drives fleetwide USCan

content down.

• A trend toward more USCan content within true transplant vehicles drives fleetwide

USCan content up.

• A market shift from Big 3 to import-nameplate vehicles drives fleetwide USCan content

down.

• A market shift from passenger cars to SUVs drives fleetwide USCan content up.

Here are rough estimates of the relative importance of each factor:

• True domestic Big 3 vehicles constitute close to 66 percent of the vehicle fleet. USCan

content decreased by about 5.4 percentage points: from 90.6 percent in 1995 to 85.2

43
percent 1998. As a result, this factor accounts for a 66% x 5.4% = 3.6 percentage point

reduction in USCan content for the overall vehicle fleet. When domestic Big 3 vehicles

with international design (e.g., Ford Escort) are included, this factor rises to a 3.9

percentage point overall reduction.

• True transplant vehicles constitute about 17 percent of sales. USCan content increased by

about 12 percentage points: from 47 percent 1995 to 59 percent in 1998. This factor

accounts for a 17% x 12% = 2.0 percentage point increase in USCan content for the

whole vehicle fleet.

• The market share for the Big 3 dropped from 72.5 percent in MY 1995 to 70.0 percent in

MY 1998, while import-nameplate vehicles rose from 27.5 to 30.0 percent of sales. In

1998, USCan content was, on the average, 53.5 percentage points higher in Big 3 than in

import-nameplate vehicles: 84 vs. 30.5 percent. This factor accounts for a 2.5% x 53.5%

= 1.3 percentage point reduction in USCan content for the whole fleet.

• The market share for passenger cars dropped from 59.7 percent in 1995 to 53.4 percent in

1998, with nearly all the growth going to SUVs. In 1998, USCan content was, on the

average, 9 percentage points higher in SUVs than in passenger cars: 69 vs. 60 percent.

This factor accounts for a 6.3% x 9% = 0.6 percentage point increase in USCan content

for the entire fleet.

In all, the four factors approximately account for a net:

-3.9+ 2.0-1.3+ 0.6 = -2.6

and that corresponds closely to the actual net 2.37 percentage point reduction in USCan content,

from 70.01 to 67.64 percent, in the overall fleet from 1995 to 1998. In other words, the most

important factor has been the reduction of USCan content in Big 3 vehicles, and it has

overshadowed the substantial gains in USCan content among the transplant vehicles as well as any

effects of market shifts.

2.7 By manufacturer

The trends in USCan content differ substantially among manufacturers, as we shall see. There is,

however, no obvious correlation between aggregate USCan content trends and manufacturers'

success in gaining or maintaining market share. Let us first examine the market shares of 21

manufacturers, based on the "production model year registrations" as defined in Section 2.2, and

thus somewhat different (and more variable) than shares based on "calendar year sales" as

reported in Automotive News Almanacs. All statistics in this section are based on the nameplate

under which a vehicle is sold, not on who produced it. For example, NUMMI cars sold as Geo

Prizms are included in General Motors, and those sold as Corollas are included in Toyota:

44
1994

33.6

25.1

14.6

7.6

5.5

5.0

2.7

1.4

.3

.8

.2

.5

.4

.6

.6

.11

.05

.14

.02

.8

.1

Market Shares ('

1995

33.4

24.7

14.5

6.8

5.2

5.5

2.1

1.8

.7

.8

.2

.9

.6

.8

.6

.12

.13

.20

.05

.9

.2

1996

32.1

23.7

17.8

7.8

5.6

4.9

1.7

1.1

.7

.6

.2

1.1

.4

.4

.6

.12

.18

.17

.05

.6

.3

Vo)

1997

29.6

26.4

15.4

7.8

6.4

5.3

1.4

1.7

.8

.5

.2

1.1

.7

.9

.4

.13

.16

.19

.08

.7

.4

1998

29.3

24.8

15.9

8.7

6.9

4.2

1.5

1.2

1.0

.8

.2

1.5

1.0

.8

.7

.16

.13

.09

.07

.6

.5

General Motors

Ford

Chrysler

Toyota

Honda

Nissan

Mazda

Mitsubishi

Subaru

Isuzu

Suzuki

Volkswagen

Mercedes-Benz

BMW

Volvo

Jaguar

Landrover

Saab

Porsche

Hyundai

Kia

Companies with substantial gains (in absolute terms) are Chrysler, Toyota, Honda, Volkswagen,

Mercedes-Benz and Kia. General Motors, Nissan and Mazda lost market share. Ford was almost

unchanged. Now let us examine the trends in value-weighted average USCan parts content:

45
USCan Content (Average %)

1995 1996 1997 1998

General Motors

Ford

Chrysler

Toyota

Honda

Nissan

Mazda

Mitsubishi

Subaru

Isuzu

Suzuki

Volkswagen

Mercedes-Benz

BMW

Volvo

Jaguar

Landrover

Saab

Porsche

Hyundai

Kia

There are clear differences between the Big 3, who have high levels of USCan content (79-92%)

in their almost exclusively domestic vehicles; the Japanese companies, all except 1997-98 Suzuki

at an intermediate level (22-53%), selling a large proportion of transplants with some imports; and

the European and Korean companies, at a much lower level (0-13%), selling primarily imports.

At the same time, there are visible differences within each group. Among the Big 3, Ford started

the lowest, but held its USCan content and, by 1998 was the highest (85.8%). GM started at a

very high 91.9 percent but dropped substantially to 85 percent in 1998. Most of the drop came in

the last year, which saw an almost across-the-board reduction of USCan content in the various

GM models. Chrysler's USCan content dropped even more than GM's, from 88.6 to 79 percent.

All Japanese companies except Subaru and Suzuki increased their USCan content during 1995-

98, but Honda and Isuzu had the largest increases by far. Honda, at 53 percent, is now well ahead

of the others. Toyota and Mazda had increases of 7-9 percentage points, placing them in the high

30's. Nissan, Mitsubishi and Subaru changed less and had 23-31 percent USCan content in 1998.

46

91.9

85.8

88.6

30.5

36.0

22.9

29.4

30.0

26.2

25.0

24.7

7.8

2.0

4.2

2.0

6.1

< 5

1.3

< .5

7.6

7.2

91.7

84.9

84.0

36.2

47.9

23.0

37.8

41.3

33.9

33.1

16.5

10.3

2.0

11.8

2.0

5.7

< .5

1.0

< .5

5.0

5.0

90.3

82.6

80.1

34.2

42.7

25.8

33.7

27.8

32.4

38.4

13.5

7.1

< 5

9.1

2.0

5.1

< .5

1.8

< .5

1.3

5.0

85.0

85.8

79.0

37.4

53.0

26.1

38.7

30.6

23.6

47.8

10.1

7.3

13.4

9.2

1.7

5.0

< .5

1.9

< .5

1.1

4.2
European companies had much lower USCan content than Japanese vehicles. Volkswagen, with

many operations in Mexico, maintained a fairly steady USCan content around 8 percent. After

BMW and Mercedes opened assembly facilities in Spartanburg, South Carolina and Tuscaloosa,

Alabama, respectively, USCan content jumped to 9-13 percent. The other European vehicles have

little USCan content. Hyundai lost most of its USCan content after closing its Canadian assembly

plant.

When data are aggregated at the company level, there is little correlation between the trends in

USCan content and market share. Among the Big 3, GM lost USCan content and lost market

share; however, Chrysler lost even more USCan content but gained market share. Among

Japanese companies, Honda and Toyota gained USCan content and market share; however,

Nissan and Mitsubishi also gained USCan content but lost market share; Subaru lost USCan

content but gained market share. Most of the European companies gained market share but only

Mercedes-Benz and BMW increased USCan content. Hyundai lost both market share and USCan

content.

The data also suggest that companies sourced more parts during 1995-98 from countries with

lower manufacturing costs. Thus, Japanese and German companies sourced more parts in the

United States and Canada (or, in the case of VW, in Mexico), American companies acquired more

Mexican parts, and Korean companies obtained more from Korea.

Comparison of the assembly locations of vehicles sold in the United States in 1994 and 1998

shows differences among manufacturers as well as time trends:

Percent of U.S. Registrations Assembled in

MY U.S/Canada Mexico Overseas

General Motors

Ford

Chrysler

Toyota

Honda

Nissan

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

99.4

96.7

97.4

98.6

94.0

90.3

40.2

54.0

60.5

70.5

54.3

41.0

.6

2.1

1.9

1.4

4.8

9.7

4.8

1.0

.7

1.2

59.8

46.0

39.5

29.5

45.7

54.2

47
MY

Percent of U.S. Registrations Assembled in

U.S/Canada Mexico Overseas

Mazda

Mitsubishi

Subaru

Isuzu

Suzuki

Volkswagen

Mercedes-Benz

BMW

Volvo

Saab, Jaguar, Landrover, Porsche

Hyundai

Kia

General Motors and Chrysler substantially increased assemblies of vehicles in Mexico and exports

of those vehicles to the United States during 1994-98. Ford assembled about the same number of

vehicles in Mexico each year, but exported fewer of them to the United States (while selling more

in Mexico or other countries). The trends in assembly locations for GM and Chrysler vs. Ford are

consistent with the trends in USCan parts content.

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

1994

1998

52.7

53.7

40.9

45.7

62.0

57.9

49.5

75.5

48.7

22.5

22.3

11.9

7.2

9.3

2.8

65.9

53.0

47.3

46.3

59.1

54.3

38.0

42.1

50.5

24.5

51.3

77.5

34.1

47.0

100.0

77.7

100.0

88.1

92.8

90.7

100.0

100.0

97.2

100.0

100.0

100.0

48
Japanese companies rely heavily on transplants. Among the larger companies, Honda had the

highest percentage of transplants throughout 1994-98. Their proportion of U.S. sales assembled

in the United States or Canada increased from 60.5 percent in 1994 to 70.5 percent in 1998.

Toyota had a large increase, from 40.2 percent to 54.0 percent of U.S. registrations assembled in

U.S./Canada. Isuzu also had a large increase. Nissan, Subaru and Suzuki reduced assemblies in

U.S./Canada. Nissan is also the only Japanese company that assembled vehicles in Mexico for

sale in the United States.

Volkswagen, as stated above, assembles many cars in Mexico. Mercedes-Benz and BMW

increased their transplant production from nothing to 12-22 percent, still far below most Japanese

companies. Hyundai moved all assembly back to Korea.

USCan parts in transplant vehicles: It is especially interesting to focus on the percent of USCan

content in the transplant vehicles of the seven companies, all Japanese, that sold transplants

throughout 1995-1999. In the following table, "transplants" include "true transplants" and "Big 3

built vehicles sold with foreign-based nameplates" (such as Isuzu Hombre), in the nomenclature of

Section 2.4:

Transplant Vehicles: USCan Content (Average %)

1995 1996 1997 1998

Toyota

Honda

Nissan

Mazda

Mitsubishi

Subaru

Isuzu

Every Japanese manufacturer's transplants gained USCan parts content. Honda and Isuzu gained

over 24 percentage points. Toyota, Nissan, Mitsubishi and Subaru gained 5-7 points. In other

words, during 1995-98, the Japanese manufacturers succeeded in a concerted effort to increase

the proportion of U.S. sales assembled in North America and the proportion of USCan parts in

these North American-assembled vehicles. Although these trends must have existed even before

the AALA and the 1995 U.S.-Japan Agreement on Autos and Auto Parts (see Sections 1.2 and

1.3), they have certainly continued since AALA and the Agreement.

2.8 Make-models that gained or lost USCan content

By tracking the USCan content of individual make-models from 1995 to 1998, we can obtain

insight on what sorts of vehicles were the principal gainers, and losers in USCan content. Some

models, however, were not produced continuously from 1995 through 1998. To facilitate this

analysis, the 298 make-models of cars, pickup trucks, SUVs and vans in the original data base

49

49.4

47.1

44.0

66.2

57.6

35.0

35.0

53.1

65.4

45.4

69.5

57.6

40.0

48.1

52.7

59.6

46.2

67.0

51.4

40.0

46.4

54.7

72.0

51.1

68.8

63.4

40.0

60.6
were aggregated into 135 groups of vehicles produced from 1995 through 1998. For example, if

a manufacturer produced a model in 1995 and then discontinued it but essentially replaced it with

a new model in the same market class - e.g., Ford Bronco and Expedition, both full-sized SUVs -

these two models, together, form a group produced from 1995 through 1998. Also, when one

company sells two or more models of identical or similar design under different nameplates

(corporate twins), with identical or similar USCan content, they are grouped together for this

analysis - e.g., Buick LeSabre, Olds 88 and Pontiac Bonneville.

The procedure is to compare the USCan content for MY 1995 and MY 1998 and compute the

gain or loss; the average annual registrations for 1995 through 1998; and the gain score, the

product of A USCan and average registrations. For example, Honda Accord had 50 percent

USCan content in 1995 and 75 percent in 1998, a gain of 25 percentage points. Since average

annual new-vehicle registrations were 364,873, the gain score is

.25x364,873 = + 91,218

The interpretation of the gain score is that an increase of 25 percentage points in the USCan

content of Honda Accords is equivalent, so to speak, to manufacturing enough additional parts in

the United States and Canada to assemble 91,218 cars per year.

Among the 135 groups, only 30 increased USCan content from 1995 to 1998. The total newvehicle registrations for the 30 gainers was, on the average, 3,554,909 per year. The sum of the

gain scores for the 30 groups was 389,562 - i.e., the registration-weighted average increase in

USCan content for these models was 389,562/3,554,909 = 11 percentage points.

Sixty-six groups, totaling 8,249,643 vehicles per year lost USCan content from 1995 to 1998.

The sum of the gain scores was - 605,858. In other words, the sum of the losses exceeded the

sum of the gains, consistent with the decline in average USCan content of the entire vehicle fleet,

as reported in Section 2.2. The average reduction in USCan content among these 66 models was

- 605,858/8,249,643 = - 7.3 percentage points.

Thirty-nine groups, totaling 2,351,709 vehicles per year reported exactly the same USCan content

in MY 1995 and MY 1998.

Table 2-1 lists the 20 make-model groups with the most positive gain scores. Topping the list is

Honda Accord, with a gain score of 91,218, thanks to a 25 percentage point increase in USCan

content and a high volume of sales. Honda Civic is a close second, with a similar 25 percentage

point USCan increase and slightly lower sales. In third place is the Ford F-Series truck, whose

USCan content increased "only" 5 percentage points - from a high 90 to an even higher 95 - but

whose sales are so large that its gain score exceeds all the remaining models.

Most important, Table 2-1 shows that 15 of the top 20 gainers are transplants of one form or

another: 9 are "true" Japanese transplants (Accord, Civic, Taeoma, Altima, Corolla, Frontier,

Rodeo, Passport, Legacy), 2 are Japanese transplants sold with Big 3 nameplates (Geo Prizm and

Metro), 3 true import models were replaced or at least supplemented by a transplant or an

50
TABLE 2-1

TWENTY MAKE-MODEL GROUPS WITH GREATEST GAINS IN

U.S./CANADIAN PARTS CONTENT, 1995-98

1.

2.

3.

4.

5.

6.

7.

8

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

Honda Accord

Honda Civic

Ford F-Series

Toyota Pickup/Tacoma

Nissan Altima

Toyota Corolla

Nissan Pickup/Frontier

Toyota Previa/Sienna

Isuzu P'UP/Hombre

Isuzu Rodeo

Crown Vic/Grand Marquis

GeoPrizm

BMW 300/Z3

Toyota 4Runner

Honda Passport

Subaru Legacy

Explorer/Mountaineer

Volkswagen Jetta

Pathfinder/QX4

Geo Metro

Average USCan Content (%)

1995

50

45

90

25

40

45

30

5

5

35

80

50

5

5

35

35

80

10

0

45

1998

75

70

95

45

55

55

45

60

90

55

85

62

13.7

10

55

40

81

15

5

50

Gain

+ 25

+ 25

+ 5

+ 20

+ 15

+ 10

+ 15

+ 55

+ 85

+ 20

+ 5

+ 12

+ 8.7

+ 5

+ 20

+ 5

+ 1

+ 5

+ 5

+ 5

Average

Annual

Registrations

364,873

311,940

668,480

133,533

147,019

213,855

118,702

26,744

14,853

61,136

195,707

70,860

62,423

102,642

25,553

84,122

410,254

82,007

81,442

63,894

Gain

Score*

91,218

77,985

33,490

26,707

22,053

21,386

17,805

14,709

12,625

12,227

9,785

8,503

5,461

5,132

5,111

4,206

4,180

4,100

4,072

3,195

"Gain score = USCan gain x annual registrations

51
essentially domestic vehicle (Previa to Sienna, P'UP to Hombre, BMW 300 to 3OO/Z3), and 1

was a Mexican transplant (Jetta). The remaining 5 of the top 20 gainers include 3 Ford domestic

models (F-Series, Crown Victoria, Explorer) and 2 Japanese true imports (4Runner, Pathfinder).

The two groups that had the largest gain in percent USCan content (although not the largest gain

scores because sales volumes are not so high) are the Isuzu pickup truck, gaining from 5 to 90

when it shifted from an import (P'UP) to a domestic vehicle sold by Isuzu (Hombre); and the

Toyota van, gaining from 5 to 60 when it shifted from a true import (Previa) to a true transplant

(Sienna).

Table 2-2 lists the 20 make-model groups with the most negative gain scores. Topping the list are

three groups of domestic Chrysler products: Neon, Caravan/Voyager/Town&Country and Dodge

Ram Pickup. In fact, the entire list is Big 3 vehicles, 19 "true" domestics, and the Escort/Tracer,

an international design produced in Ford factories. Six, including the top three are Chrysler, 10

are General Motors, and only 4 are Ford, reflecting the corporate USCan content trends reported

in Section 2.7. Seven groups have a portion of their final assemblies in Mexico (Neon, Ram

Pickup, Cavalier, Escort, Suburban, Tahoe, Contour) and, presumably, increased their Mexican

parts content over the years.

Although the single most negative score (- 53,790) is not nearly as large as the most positive

(+ 91,218), negative scores are more persistent. The 20th model in Table 2-1 is down to + 3,195

while the 20th model in Table 2-2 is still at - 10,515.

Table 2-3 lists the 15 best-selling vehicles that reported identical USCan content in 1995 and

1998. These make-models show no obvious pattern. They include 4 true domestic groups

(Ranger, Saturn, Econoline, Mustang), 5 true transplants (Canary, Sentra, 626, Avalon, Eclipse),

5 true imports (Maxima, Volvo 850/70, Tercel, Mirage, Lexus ES) and the Geo Tracker

(essentially a Suzuki Sidekick sold by Chevrolet).

2.9 USCan content changes in carryover vs. redesigned vs. entirely new models

In the majority of cases, this year's vehicles of a particular make-model are not too different from

the past year's: they are essentially carryover models. Every four years or more, however,

successful make-models are extensively redesigned: a fundamentally new vehicle is sold under the

same name as last year's product. For example, the 1996 Ford Taurus is a major redesign of the

1995 Taurus. In other cases, a vehicle design and its name are both discontinued, but the

manufacturer produces a new vehicle with a new name, yet aimed at more or less the same market

segment, such as the 1997 Malibu replacing the 1996 Corsica as Chevrolet's mid-sized sedan.

When do most of the shifts in USCan content take place? The most dramatic shifts might be

expected when vehicles are redesigned or replaced. But since models carry over far more often

than they are redesigned or replaced, it should come as no surprise that the cumulative bulk of the

change is in carryover models.

The quantitative analysis was based on a "year-to-year" change data file. Make-model groups

were defined as in the preceding section. A record was created for each of three "current" years:

52
TABLE 2-2

TWENTY MAKE-MODEL GROUPS WITH GREATEST LOSSES IN

U.S./CANADIAN PARTS CONTENT, 1995-98

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

Dodge/Plymouth Neon

Caravan/Voyager/T&C

Dodge Ram Pickup

GM C/K Pickup

Grand Am/Skylark/Achieva

Cavalier/Sunfire

Escort/Tracer

LeSabre/88/Bonneville

Jeep Grand Cherokee

GM U Van

Corsica/Beretta/Malibu

Taurus/Sable

Blazer/Jimmy/Bravada

GM S/T Pickup

Jeep Cherokee

Ford Windstar

GM Suburban

Intrepid/Vision

GM Tahoe/Yukon

Contour/Mystique

Average

1995

92

89

86

95

91

90

79.3

95

93

92

91

90

95

95

84

95

95

94

95

80

USCan Content (%)

1998

71

80.1

74

90

80

81

71

86

84

75

80

86.1

90

90

74

90

85

86

86

75

Gain

-21

- 8.9

-12

- 5

-11

- 9

- 8.3

- 9

- 9

-17

-11

- 3.9

- 5

- 5

-10

- 5

-10

- 8

- 9

- 5

Average

Annual

Registrations

256,143

514,774

320,541

657,069

275,333

335,653

330,360

279,949

262,349

121,600

182,490

487,752

325,838

271,136

134,866

232,223

112,673

139,611

121,563

210,293

Gain

Score*

- 53,790

- 45,809

- 38,465

- 32,853

- 30,287

- 30,209

- 27,393

-25,195

-23,611

- 20,672

- 20,074

-19,135

- 16,292

- 13,557

- 13,487

-11,611

-11,267

-11,169

- 10,941

- 10,515

*Gain score = USCan gain x annual registrations

53
TABLE 2-3

FIFTEEN HIGHEST-VOLUME MAKE-MODEL GROUPS

WITH UNCHANGED US/CANADIAN PARTS CONTENT, 1995-98

1. Toyota Camry

2. Ford Ranger

3. Saturn

4. Ford Econoline Van

5. Nissan Maxima

6. Ford Mustang

7. Nissan Sentra

8. Mazda 626

9. Toyota Avalon

10. Volvo 850/70

11. Mitsubishi Eclipse

12. Toyota Tercel

13. Mitsubishi Mirage

14. Lexus ES

15. Geo Tracker

Average

1995

55

80

95

90

5

90

45

65

60

2

72

10

5

10

40

USCan Content

1998

55

80

95

90

5

90

45

65

60

2

72

10

5

10

40

(%)

Gain

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Average

Annual

Registrations

354,770

272,722

263,541

165,949

142,800

139,274

137,703

87,424

68,517

62,996

61,992

48,965

48,492

46,952

37.439

54
1996, 1997 and 1998, consisting of the USCan content and registrations in the current and the

previous model year and a description of the change, if any, in that make-model. For example, the

"1996 Honda Civic" record shows USCan content of 70 in the current year (1996), 45 in the

previous year (1995) and 228,874 registrations in the current year, 325,294 in the previous year.

The contribution of 1996 vs. 1995 Honda Civic, a carryover make-model to overall USCan shifts

is estimated by

Gain(N) = [USCan(N) - USCan(N-l)] [Regs(N) + Regs(N-l)] = .25 x 554,168 = 138,542

For the three "current" years 1996, 1997 and 1998 combined, there were 72 make-model-year

combinations where USCan content increased from the previous to the current year; 62 were

carryover models, 7 were redesigns and 3 were replacement models with new names. The gain

scores for the 62 carryover models added up to 1,196,361; the sums for the 7 redesigns and 3

replacements were 61,841 and 53,670, respectively. In other words, the overwhelming bulk of

the USCan increases is in the carryover models, because they greatly outnumber the redesigns and

replacement models. However, the registration-weighted average gain in USCan content is 6.6 in

the carryover models, 7.8 in the redesigns and 15.7 in the replacements, indicating a potential for

greater change when the model is redesigned or replaced.

Similarly, there were 126 make-model-year combinations where USCan content declined from the

previous to the current year; 115 were carryover models, 8 were redesigns and 3 were

replacement models. The gain scores for the 115 carryover models added up to - 1,574,401; the

sums for the 8 redesigns and 3 replacements were - 137,749 and - 45,430. Here too, most of the

USCan loss is in the carryover models, simply because they far outnumber the redesigned or

replaced models. However, the registrations-weighted average loss in USCan content is 4.8 in

the carryover models, 4.2 in the redesigns and 6.7 in the replacements.

This preponderance of USCan change in carryover models is found in both Big 3 and transplant

vehicles.

55

CHAPTER 3

REGRESSION OF NEW VEHICLE SALES

BY U.S./CANADIAN CONTENT AND OTHER FACTORS

The regulation that establishes content labels for new vehicles in accordance with the American

Automobile Labeling Act (AALA) explicitly says their purpose is "to aid potential purchasers in

the selection of new passenger motor vehicles by providing them with information about the value

of the U.S./Canadian and foreign parts content of each vehicle."1 Presumably, the labels would

guide people who strive to "buy [North] American" and/or admire United States/Canadian

(USCan) engineering and quality to favor vehicles with higher USCan parts content. Conversely,

the labels might incline people who esteem the products of another nation(s) to buy vehicles with

a high percentage of parts from that nation(s) (and low USCan content).

Chapter 2 showed that USCan content did not increase for the new-vehicle fleet as a whole from

1995 to 1998. In fact, it declined from 70 to 67.6 percent. Nor were there strong shifts from

imported to domestic vehicles, or vice-versa in 1995, the model year the labels were introduced,

or subsequently. However, the aggregate statistics do not reveal the sales trends for individual

make-models. Did models that increased USCan content typically experience increases or

decreases in sales? Have transplant [Big 3] vehicles with relatively high USCan content sold

better or worse, since 1995, than comparable vehicles with low USCan content?

Questions like those are addressed by regression analyses of year-to-year changes in sales of

individual make-models as the dependent variable and their year-to-year changes in USCan

content as an independent variable. Other factors, additional independent variables, are the yearto-year change in price, the vehicle type (car, pickup truck, etc.) the nameplate type (Big 3,

transplant or import), and whether or not the make-model was redesigned.

Regressions were run on the entire data base of 410 points and on many subsets. The majority of

them showed an occasionally statistically significant association between increased USCan content

and increased sales. Although results vary a lot, they associate, on the average, a 2 percent

increase in sales with a 10 percentage-point increase in USCan content. It must be emphasized

that regression results do not, by themselves, establish a causal relationship between USCan

content and sales. This report does not claim that increasing USCan content made the sales go

up. Indeed, a strong causal relationship is improbable, given that our consumer survey showed

little or no use of the numeric USCan content score in vehicle purchasing decisions (Section 6.6).

This report merely notes that models with increasing USCan content had, on the average, better

sales performance than the models without it. In other words, the models that have been gaining

popularity have also been gaining USCan content, but their popularity is not necessarily a

consequence of their USCan content.

lCode of Federal Regulations, Title 49, General Printing Office, Washington, 1998, Part

583.2.

57
Specifically, a robust regression coefficient might have been construed as evidence of a possible

cause-and-effect relationship - i.e., obtaining similar regression coefficients for USCan content in

the numerous regressions on subsets of the data. The coefficients in this chapter are only partially

robust. On the one hand, the regression coefficients in analyses of Big 3 vehicles alone are similar

to the coefficients in analyses of transplants/imports alone. But the coefficients for USCan

content in passenger cars are quite positive, while the coefficients for USCan content in light

trucks are mixed at best and are often negative. There does not appear to be any intuitive reason

to suspect a negative effect in light trucks; if anything, truck buyers have traditionally been viewed

as more interested in "buying American" than car buyers. The findings suggest that the observed

relationships between USCan content and sales, although real in a statistical sense, probably have

little to do with direct cause and effect.

Nevertheless, the overall results of this chapter at least suggest that increasing USCan content

does not harm sales.

3.1 The data base for the regression analyses

Appendix B lists the entire data base, including all variables, used in the regression analyses. It

comprises 410 data points (make-model-group/current MY combinations).

The starting point for creating the data base is the file described in Section 2.1, consisting of 298

individual make-models of passenger cars, pickup trucks, SUVs and vans with a gross vehicle

weight rating (GVWR) of 8,500 pounds or less, sold in the United States during at least one

model year from 1994 to 1998. The file specifies, for each model year, the USCan content on the

AALA label (MY 1995-98 only), the production-model-year registrations (1994-98) and the base

sticker price (1994-98). It is listed in Appendix A.

However, production-model-year registrations are inappropriate here. Registration data derive

from R. L. Polk files, where the "production" model year is based on the 10th character of the

Vehicle Identification Number (VEST). The length of a manufacturer's "model year production

run" is sometimes 12 months, but it can also be substantially longer or shorter. That makes it

difficult to compare a make-model's sales from one model year to the next, because one might be

based on a longer production run than the other.

In this chapter, vehicles will be grouped by their "sales" model year: all vehicles sold between

October 1 of year N-l and September 30 of year N, regardless of their actual production model

year, are classified in sales model year N. Sales statistics by make-model for sales model years

1994-98 were compiled from Automotive News. Sales can easily be compared year to year,

because they are based on 12-month periods. The analysis is done with the caveat that vehicles of

sales-model-year N may include some vehicles of production year N-l (holdovers) or N+l (early

introductions), whereas the AALA label information for model year N pertains specifically to

vehicles of production year N. Thus, the sales data are not an exact match for the AALA label

data.

58
This file in Appendix A also has too many individual make-models for our purpose. It was

condensed and abridged to 116 high-volume make-model groups (MMG), to facilitate year-toyear comparisons of sales, USCan parts content and base sticker price:

• In Appendix A, models that were substantially redesigned are listed separately (e.g., 1994-96

Toyota Camry and 1997-98 Toyota Camry); here, they are combined to make a single MMG.

• Similarly, if a manufacturer produced a model in 1994, say, and then essentially replaced it in

1995-98 by another model with a new name but in the same market class - e.g., Hyundai Excel

and Accent, both economy cars - these two models, together, form one MMG produced from

1994 through 1998.

• Also, when one company sold two or more models of identical or similar design under different

nameplates (corporate twins), with identical or similar USCan content, they were grouped

together - e.g., Buick LeSabre, Olds 88 and Pontiac Bonneville.

• Make-models with low sales volume often have extreme sales fluctuations and are poor

candidates for regressions of year-to-year sales trends. The MMGs in this analysis all average

at least 20,000 sales per year. These more popular models/groups have relatively smoother,

more predictable sales trends.

Whenever two or more individual make-models are combined into a single MMG, the MMG sales

for each model year are the sums of the sales of the constituent models. The price and USCan

content are the sales-weighted averages of the individual values.

Even when MMGs contain more than one make-model, they are all the same type of vehicle,

passenger car, pickup truck, sport utility vehicle (SUV) or van. Thus, each MMG is assigned a

single "vehicle type" code.

Each MMG is coded "Big 3," "Transplant" or "Import." Big 3 comprises all vehicles sold with

one of the nameplates of the Big 3 domestic manufacturers, regardless of where it was produced

or designed. In the nomenclature of Section 2.4, they include "true domestics" such as Dodge

Caravan, Mercury Grand Marquis, Saturn, etc.; "international designs assembled in Big 3

factories," such as Ford Escort; "transplant vehicles sold with Big 3 nameplates" such as Geo

Prizm; and "captive imports" such as Cadillac Catera. Transplants are all make-models with

nameplates of foreign-based companies but assembled exclusively or primarily in the United

States or Canada. They include "true transplants" such as Honda Accord, Toyota Tacoma,

Mazda 626, etc. and "Big 3 designed/built vehicles with foreign-based nameplates" such as the

Mazda pickup truck. Imports are all make-models with foreign-based nameplates assembled

exclusively or primarily outside the United States or Canada. They include "true imports" such as

Nissan Pathfinder, Mercedes E-class, Lexus ES, etc.; "Mexican transplants" such as Volkswagen

Jetta; and "part-time transplants" such as Hyundai Sonata (however, none of the latter met the

20,000 sales per year criterion).

59
The next step is to transform the MMG-oriented file of 116 records into an MMG*MY file

containing 410 records showing the change in sales, price and US Can content from the preceding

year to the current year. This file contains one record for each MMG in each model year (1995-

98) for which vehicles of that MMG were sold in that year and in the preceding year. These 410

records become the data points for the regression analyses. For example, the MMG consisting of

the single make-model Ford Mustang (sold throughout 1994-98) generates four records with the

"current" model year 1995, 1996, 1997 and 1998, respectively:

Current

MY

1995

1996

1997

1998

Current Model

Sales

138,867

129,718

112,311

136,488

Price

14,530

15,180

15,880

16,675

Year

USCan

90

90

80

90

Preceding Model

Sales

147,744

138,867

129,718

112,311

Price

13,365

14,530

15,180

15,880

Year

USCan

Unknown

90

90

80

Sales declined relative in 1995 (relative to 1994), 1996 (relative to 1995) and 1997 (relative to

1996) but rose in 1998 (relative to 1997). The base sticker price rose every year. USCan parts

content was unchanged in 1996 (relative to 1995), declined in 1997 (relative to 1996) but rose in

1998 (relative to 1997).

The dependent variable in the regressions will be the natural logarithm of the ratio of the sales of

the current to the preceding model year,

A_Sales = log [Sales(MY) / Sales(MY-l)]

Similarly, one of the independent variables is the natural logarithm of the price ratio:

A_Price = log [Price(MY) / Price(MY-l)]

Log ratios of sales and price are often used in econometric analyses like these because they tend

to have fairly linear relationships with one another. Another advantage is that the resulting model

predicts by how many percent sales will change for each 1 percent increase in price ("elasticity")

The independent variable pertaining to USCan content, for "current" model years 1996-98 is the

arithmetic difference in the proportions of USCan content this year and the preceding year, as

reported to NHTSA:

for MY 1996-98: AJJSCan = .01 [USCan(MY) - USCan(MY-l)]

The reason for multiplying by .01 (changing percents to proportions) is to put A_Sales, A_Price

and A_USCan on the same magnitude basis: a value of .01 corresponds to a 1 percent sales

increase, a 1 percent price increase, and a 1 percentage point USCan increase. Regression

coefficients will measure the elasticity of the relationships.

60
When the "current" model year is 1995, the preceding year's USCan content is unknown, since

there were no labels in MY 1994. The definition of A_USCan for 1995 is based on the following

rationale: in 1995, consumers gained the ability to differentiate the USCan content of one makemodel from another. Before that, they did not have information to differentiate individual makemodels. But they were not completely uninformed. Even the average consumer could probably

distinguish a Big 3 vehicle from a foreign-based nameplate. However, the subgroup who were

truly interested in content and country of origin - the types most likely to be reading the labels

starting in 1995 - likely knew more than the average consumer. Many of this subgroup probably

could distinguish transplants from imports among vehicles with foreign-based nameplates, based

on magazine articles, brochures, inquiries to dealers, etc. In other words, in 1994, they could

classify vehicles as Big 3, transplant, or import, but they could not differentiate USCan content

within those three categories. They could only assume that each make-model was at the average

for its category. In 1995, they could differentiate. Since A_USCan should represent the change

in information from one year to the next, A_USCan for 1995 ought to be the difference between

the actual USCan content for that specific make-model and the average USCan content for all

make-models in its class - Big 3, transplant, or import, as the case may be. Based on the methods

of Chapter 2, the average percentages of USCan content in 1995 were 90.09 percent for the Big 3

(excluding transplants and imports sold with Big 3 nameplates, as will be explained below), 48.39

percent for transplants sold by foreign-based companies, and 4.69 percent for imports sold by

foreign-based companies. Thus,

for MY 1995: AJJSCan = .01 [USCan(95) - 90.09] for Big 3 vehicles

.01 [USCan(95) - 48.39] for transplants

.01 [USCan(95) - 4.69] for imports

Big 3 vehicles ordinarily include "true domestics," "international designs assembled in Big 3

factories," "transplant vehicles sold with Big 3 nameplates" and "captive imports." An exception

must be made for 1995. Six Big 3 MMGs in 1995 are not "true domestics" in the nomenclature

of Section 2.4: Escort/Tracer, Ford Probe, Ford Aspire, Geo Prizm, Geo Metro and Geo Tracker.

Content-sensitive consumers would probably have known that Ford Aspire was a Korean import

and would never have expected it to have 90.09 percent USCan content; thus, AJLJSCan =

.01 [USCan(95) - 90.09] does not make sense for Ford Aspire; indeed, it is not clear what they

would have expected. As a result, the 1995 Ford Aspire is not included in the file, although the

1996 and 1997 Aspires are included, with AJJSCan = .01 [USCan(MY) / USCan(MY-l)]. By

the same token, the "Geo" nameplate would immediately signal content-sensitive consumers that

Prizm, Metro or Tracker have less USCan content than the typical Big 3 vehicle; these, too, are

excluded in 1995. On the other hand, even content-sensitive consumers were likely unaware of

the Mazda heritage in Escort/Tracer and expected it to have typical Big 3 USCan content; it is

included for 1995. Ford Probe is in-between: the Mazda influence is stronger and probably better

known than for Escort/Tracer, although there is no unique nameplate like "Geo"; since there is

doubt, it's best to leave it out for 1995.

By the same logic, content-sensitive consumers were likely unaware that Nissan Quest and the

Mazda pickup were qualitatively more U.S./Canadian than the typical transplant; both of these

MMGs are included with transplants, and AJJSCan = .01 [USCan(95) - 48.39] makes sense for

61
1995. Volkswagen Jetta and Golf, although technically "Mexican transplants," are probably

viewed the same as other imports; these MMGs are included with imports, and A_USCan =

.01 [USCan(95) - 4.69] in 1995.

The regression data points will be weighted by the sum of the current and preceding model year's

sales. Thus, in the case of Ford Mustang, the sales, price and USCan data shown above yield the

following variables for the regressions:

MY

1995

1996

1997

1998

ASales

-.062

-.068

-.144

+ .195

A_USCan

- .0009

.000

-.100

+ .100

APrice

+ .084

+ .044

+ .045

+ .049

Weight Factor

286,611

268,585

242,029

248,799

In these four data points it is evident that sales increased in the one year that USCan content went

up, and sales declined when USCan content went down or stayed the same. If the remaining 406

data points all had the same pattern (they don't, of course), there would be a very strong

association between sales and USCan content.

Another independent variable is defined at the MMG*MY level. It is a nominal (non-numeric)

variable with 11 categories. It identifies ten actions or conditions that are likely to increase or

reduce sales from the previous model year, such as: redesign of the model, introduction of new

models, introduction of competitors. The 11th category, "no change" indicates none of these ten

apply. The ten change categories are:

1. Redesign, same name (e.g., 1997 Toyota Camry): extensive redesign of a model may

stimulate sales and is often accompanied by a price increase.

2. Redesign, new name - one model replaces another in the same market class (e.g., 1997

Expedition replaces 1996 Bronco as Ford's full-sized SUV): introduction of a new model

can greatly spur sales, especially if the old model was no longer a good seller. Price may

also increase.

3. Last year before redesign, same name (e.g., 1995 Mercedes E-class): sales occasionally

drop off as customers tire of the old design and wait for the new one.

4. Last year before redesign, new name (e.g., 1997 Volvo 850, which was replaced by 1998

Volvo S70): sales may decline as customers tire of the old design and wait for the new.

5. Last year it existed (e.g., 1996 Caprice/Roadmaster): sales often plunge as models are

phased out; conversely manufacturers may abruptly phase out models whose sales plunge.

6. Additional name introduced in an existing MMG (e.g., in 1996, Plymouth Breeze joined

Dodge Stratus and Chrysler Cirrus): usually increases net sales for the MMG.

62
7. One name dropped from an existing MMG (e.g., in 1998, Eagle Vision was dropped and

only Dodge Intrepid remained): usually decreases net sales for the MMG.

8. Competitor introduced in the same market class, sometimes by the same manufacturer

(e.g., 1995 Ford Aerostar is in this category, because Ford Windstar was introduced at

that time): can reduce sales [of Aerostar, in this example] drastically.

9. Second year the MMG existed2 (e.g., 1996 Honda Odyssey): sales in the second year are

often higher than in the first, partly because the new model needs time to catch on, partly

due to the technicality that the first year is sometimes less than a full year.

10. Second year after a redesign or renaming (e.g., 1996 Subaru Legacy), sales in the second

year are often higher than in the first, partly because the new design needs time to catch

on, partly due to the technicality that the first year is sometimes less than a full year.

The entire file of 410 data points is listed in Appendix B. It includes 264 cases where none of the

above ten change categories apply (these are superior regression candidates), and 146 cases that

fit into one of the change categories.

3.2 Regression examples and strategy

The initial regression encompasses all 410 data points, as shown in Table 3-1. The dependent

variable is A_Sales; the independent variables are the continuous parameters AJJSCan and

A_Price and the nominal variables Nameplate (Big 3, transplant or import), Vehicle Type, Model

Change Code and Current Model Year. Each data point (MMG-current MY combination) is

weighted by the sum of the current and preceding year's sales. The analysis is performed by the

General Linear Model (GLM) procedure on the Statistical Analysis System (SAS)3. This model

has an overall F value of 5.45 (p < .0001, given that there are 20 model degrees of freedom and

389 error df). R-squared is .2153. In other words, some of the independent variables are strongly

associated with the year-to-year change in sales, enough to make the overall model highly

significant; yet, at the same time, it is no surprise that these independent variables, by themselves

do not explain every change in sales.

The most important statistic for this study is the regression coefficient of AJLJSCan, + .04144.

This is a weak positive correlation, and it is not statistically significant (t = 0.23, p > .05). For

statistical significance at the two-sided .05 level, the absolute value oft would have to exceed as

little as 1.97 or as much as 2.13 in the regressions of this chapter, depending on the error degrees

^'First year an MMG existed" is not a possible category for a data point in the regressions.

All data points are for MMGs that existed in the current and the preceding year, otherwise

ASales cannot be defined.

3

SAS/STAT User's Guide, Version 6, Fourth Edition, Volume 2, SAS Institute, Cary, NC,

1989, pp. 891-996.

63
Dependent variable:

Aggregation method:

N of observations:

Weighting factor:

Degrees of freedom:

Model F value:

R-square:

TABLE 3-1: INITIAL REGRESSION ANALYSIS,

ALL MAKE-MODEL GROUPS IN 1995-98

A_SALES (log of the ratio of current MY to preceding MY sales)

by make-model group and current model year

410

SALES_2Y (sum of current MY and preceding MY sales)

20 model, 389 error

5.34 (p = .0001)

.2153

REGRESSION COEFFICIENTS

Parameter

INTERCEPT

A USCAN

A PRICE

NAME_PLT

BIG 3

TRANSPLANT

IMPORT

VEH TYP

CAR

PICKUP

SUV

VAN

CHG MODL

NO CHANGE

REDES SAME NAME

REDES NEW NAME

LAST YRBF REDES

LASTYRBFRENAM

LAST YR IT EXIST

ADDL NAME INTROD

ONE NAME DROPPED

COMPETITOR INTRO

2ND YR IT EXIST

2ND YR AFT REDES

CURR_YR

1995

1996

1997

1998

Estimate

- .01205

.04144

- .72895

.00000

-.00111

- .00014

.00000

.05544

.15181

- .00741

.00000

.01767

.33526

.00755

- .09154

- .39261

.12775

- .49985

-.30152

.17681

.10845

.00273

.01890

.00265

.00000

t for HO:

Parameter=0

-0.48

0.23

-2.66

-0.04

-0.00

2.03

4.80

-0.22

0.48

3.49

0.19

-1.25

-4.50

1.35

-2.85

-3.18

2.79

3.10

0.09

0.65

0.08

Pr > |t

.6337

.8206

.0081

.9696

.9969

.0435

.0001

.8268

.6328

.0005

.8467

.2134

.0001

.1763

.0046

.0016

.0055

.0021

.9286

.5150

.9326

64
of freedom (df), and for the two-sided .01 level, 2.6 to 2.95. A two-sided test is appropriate

when, as in this case, there is no specific "right" or "expected" direction for the effect.

The coefficient says that each 1 percentage-point increase in USCan content is associated with a

0.04 percent increase in sales. In other words, models that increased from 50 to 60 percent

USCan content, or from 80 to 90, or from 5 to 15 experienced, on the average, a 0.4 percent

increase in sales, after controlling for the other independent variables. Not a big change.

The regression coefficients for the other independent variables are intuitively reasonable. The

coefficient for A_Price is a strong - .72895 and it is statistically significant (t = -2.66, p < .01).

We expect a negative coefficient for A_Price - i.e., when prices are increased, all else being equal,

sales should decline. In econometric terminology, the sales-price elasticity is - .72895: when

prices increase by 1 percent, sales drop by 0.73 percent. This coefficient, however, needs to be

interpreted with caution. As stated at the beginning of this chapter, regressions do not clarify

what is the "cause" and what is the "effect," if indeed there is any cause-and-effect relationship at

all. Sometimes sales influence prices rather than the other way around. A manufacturer might

raise prices, to maximize profits, if a model sells very well. In that case, the observed price-sales

elasticity could be positive, rather than the usual negative. Although this regression produced a

strong negative coefficient for A_Price, others might not.

The intercept is - .012, indicating that a passenger cars USCan content, price or design lost 1.2

percent sales per year. The coefficients for Big 3, Transplant and Import are all close to zero,

indicating little market shift from one of these to another in 1995-98. The coefficients for Pickup,

SUV and Van are measured relative to Car (which is arbitrarily assigned a zero effect). The

model says that pickups and especially SUVs did significantly better than cars, while vans did

about the same. SUV sales gained about 15 percent per year relative to cars.

Relative to MMGs that were essentially unchanged from one year to the next, sales gained

substantially for MMGs that were redesigned with a new name (e.g., Ford Bronco to Expedition),

or if a new make-model was added to an existing MMG (e.g. Plymouth Breeze to Dodge Stratus

and Chrysler Cirrus in 1996) or for MMGs in the second year of their existence or in the second

year after a redesign/rename. Sales plunged in the last year of an MMG's existence, or when one

of the make-models in an MMG was dropped, or an important competitor was introduced. The

effects for Current Model Year are all weak, indicating a relatively smooth overall sales trend

from 1995 to 1998, without strong intermediate ups and downs.

The weakest feature of the regression in Table 3-1 is the inclusion of all the models that had

changed from one year to the next. Intuitively, it is much harder to predict sales when models are

substantially redesigned - some new designs prosper and others flop - than when models are the

same from year to year. Mathematically, since there are only a few data points in each of the ten

change groups, it is difficult for the regression to differentiate the effects of model changes from

the effects of other variables: e.g., did those few models that faced a new competitor sell so

poorly for that reason alone, or was it in part because they also raised prices and/or lowered

USCan content?

65
A more attractive approach, illustrated in Table 3-2, is to limit the regression to MMGs that were

essentially unchanged from the previous year, that did not fit into any of the ten change

categories. The penalty is that the sample is reduced from 410 to 264 data points. This model

also has a highly significant overall F value of 2.40 (p < .001, 10 model df, 253 error df).

R-squared is .0865. Although that is lower than the .2153 in the preceding regression, this is not

an inferior model: it is true we eliminated one of the best explanatory variables, Model Change,

but we also eliminated all the variance explained by that variable by excluding the data points with

model changes. Although R-squared is lower, the mean-square-error dropped by 40 percent.

The regression coefficient for AUSCan, + .29028, is much higher than in the first model, but it is

still not statistically significant at the two-sided .05 level (t = 1.68). The coefficient says that each

1 percentage-point increase in USCan content is associated with a 0.3 percent increase in sales.

In other words, models that increased from 50 to 60 percent USCan content, or from 80 to 90, or

from 5 to 15 experienced, on the average, a 3 percent increase in sales, after controlling for the

other independent variables. It bears repeating that this is not significant and not necessarily a

cause-and-effect relationship. But if the relationship were cause-and-effect, would a sales

increase of this magnitude be plausible? The consumer survey found that only 7 percent of newvehicle purchasers actually read the label at a dealership (Section 6.4), and none of these

individuals explicitly stated they had used the USCan content scores to comparison-shop among

make-models, or that they had selected or rejected a specific vehicle because of its high or low

USCan parts content (Section 6.6). That a major boost in USCan content could directly cause a

sales increase of 3 percent is improbable given the survey findings.

The coefficient for A_Price in Table 3-2 is negative, as in Table 3-1, but not nearly as strong. The

coefficients for the other variables are about the same in both regressions: little effect for

Nameplate and Current-MY, a strong sales increase for pickup trucks and, especially, SUVs

relative to passenger cars. Given that Nameplate and Current-MY are not significant in either

regression, it might be desirable to drop them for parsimony and to raise overall F. However, in

GLM models the inclusion of a few extraneous variables usually has little influence on the

important coefficients; these variables will be retained because they might conceivably be

significant in some subsets of the data that will be candidates for subsequent regressions.

Another possible shortcoming of both preceding regressions is that they contain some data points

representing extraordinary year-to-year changes in sales. Sometimes a make-model's sales will

increase 50 or 100 percent from one year to the next, or decrease by 50 percent, for idiosyncratic

reasons that cannot be boiled down to regression parameters. Sales fluctuations of that

magnitude could hardly be due to USCan content. But if USCan content happened to have gone

up or down in the year of a big sales change, it could sway the regression to give unwarranted

weight to that data point in calibrating the AJLJSCan-A_Sales relationship. Intuitively, it seems

desirable to eliminate the potential distorting effect of these outliers by restricting the regressions

to data points with A_Sales within certain reasonable bounds. The strategy will be to perform

each regression first with all available data points, and then on subsets with successively narrower

ranges of A_Sales:

66
TABLE 3-2

REGRESSION ANALYSIS FOR ALL UNCHANGED MAKE-MODEL GROUPS IN 1995-98

Dependent variable:

Aggregation method:

N of observations:

Weighting factor:

Degrees of freedom:

Model F value:

R-square:

A_SALES (log of the ratio of current MY to preceding MY sales)

by make-model group and current model year

264

SALES_2Y (sum of current MY and preceding MY sales)

10 model, 253 error

2.40 (p = .0098)

.0865

REGRESSION COEFFICIENTS

Parameter

INTERCEPT

AJJSCAN

A_PRICE

NAME_PLT

BIG 3

TRANSPLANT

IMPORT

VEHJTYP

CAR

PICKUP

SUV

VAN

CURRYR

1995

1996

1997

1998

Estimate

- .03607

.29028

- .20523

.00000

.02030

.02159

.00000

.05568

.11511

- .00180

.02841

- .00364

.00218

.00000

t for HO:

Parameter=0

- 1.64

1.68

-0.71

0.75

0.60

2.17

4.01

-0.05

1.03

-0.13

0.07

Pr>|t

.1031

.0947

.4774

.4512

.5516

.0310

.0001

.9569

.3063

.8933

.9413

67
Lower and Upper Limits on ASales:

Lower limit - .7

Upper limit + .7

-.6

+ .6

Corresponds to Year-to-Year

Decrease no more than - 50

Increase no more than +100

-45

+ 82

-.5

+ .5

-.4

+ .4

Percentage Changes in

-39

+ 65

-33

+ 49

-.3

+ .3

Sales:

-26

+ 35

-.2

+ .2

-18

+ 22

percent

percent

For example, only 11 of the 410 data points in Table 3-1, and only 2 of the 264 data points for

unchanged MMGs in Table 3-2 had A_Sales outside the ± .7 range. It seems plausible to exclude

the few cases where sales were halved or doubled, since something happened in those models

obviously unrelated to USCan, price, or any of the other variables in the regression. Without

those points, the regression ought to fit the data better and, intuitively, it ought to calibrate the

A_USCan effect better. A_Sales limits of ± .6, ± .5 or ± .4 likewise exclude only small numbers

of data points with sales changes generally beyond what could likely be attributed to the

parameters in our regressions; perhaps they could further refine the calibration of the AUSCan

coefficient. But the ASales limits should not be allowed to shrink beyond ± .3 or ± .2, because

substantial numbers of data points are excluded and the year-to-year changes get into a range that

could be due to parameters in our regressions.

No theoretical statistical basis is claimed for this consecutive truncation of the range of the

dependent variable. Nevertheless, repeating the analysis for the full data set with the six truncated

sets ought to provide a better empirical impression of the robustness of the A_USCan coefficient.

The 14 principal regressions of this chapter are: the analysis of the full 410-point data set, already

shown in Table 3-1; six successive truncations of that data set, as described above; the analysis of

264 data points for unchanged MMGs, shown in Table 3-2; and six successive truncations of the

unchanged data points.

The next strategy is to analyze subsets of the motor vehicle fleet: regressions of only the Big 3

vehicles, or only those with foreign-based nameplates (transplants plus imports), or just the

transplants; regressions of just passenger cars, and within that subset, just cars with Big 3

nameplates, with foreign-based nameplates, and just transplants; and regressions for light trucks,

and subgroups of light trucks. The numerous regressions help to gauge the robustness of the

results. If the AJLJSCan coefficients vary a lot among subgroups without any intuitively

reasonable explanation, it could be a sign that the association between increasing popularity and

increasing USCan content is more coincidental than systematic. Moderately consistent results

would at least support, although not necessarily prove, an organic link.

At the same time, however, it is interesting to look at subsets because real differences in how

consumers view USCan content could be reflected in the AUSCan coefficients. For example, the

data in Section 6.2 indicate that consumers of Big 3 vehicles are, on the average, more concerned

68
about "buying American" than people who buy imports. If so, that could portend a more positive

AJJSCan coefficient in the regression limited to Big 3 vehicles than in an analysis of imports. On

the other hand, maybe people who buy transplants are the most likely to use the labels, because

there are substantial differences in USCan content within the transplant group, so we could see

the most positive coefficients in the analyses of transplants. There may also be a public perception

that people who drive light trucks care more about USCan content than car drivers. Maybe the

historically higher market shares of the Big 3 in trucks than cars have fed that perception. Is the

AUSCan coefficient higher in the light truck analyses?

3.3 Regression results

Table 3-3 presents, in two pages, the AJUSCan coefficients in 56 regression analyses of passenger

cars and light trucks, combined - i.e., the percentage sales increase associated with a 1 percentage

point increase in USCan content from the preceding model year to the current one. The first set

of numbers in Table 3-3 represent the regression on the full data set of 410 MMG-MY

combinations, already documented in Table 3-1. The AJLJSCan coefficient is + .04, and it is not

statistically significant (t = .23, p > .05). As stated above, the coefficient says that each 1

percentage-point increase in USCan content is associated with a 0.04 percent increase in sales.

The second entry in the "all make-model groups" section of Table 3-3 calibrates the AJUSCan

coefficient after excluding 11 data points with |A_Sales| > .7 - i.e., cases where sales increased by

more than 100 percent or decreased by more than 50 percent from the preceding year. The

regression based on the remaining 399 points has about the same F value as the initial regression

in Table 3-1 (4.77 vs. 5.34) and about the same R-squared (.2016 vs. .2152), but the mean-square

residual error is reduced by 36 percent. The A_USCan coefficient rises to + . 13, but it is still not

statistically significant (t = .85, p > .05). The coefficients for the other independent variables are

usually close to the values in Table 3-1; for example A_Price has a - .601 coefficient. One

exception is the coefficient for "redesigned with a new name": some of the outliers that were

excluded were redesigns with new names that experienced sales increases over 100 percent;

without those outliers, the coefficient is much smaller than in Table 3-1, although still positive.

The remaining five coefficients in the first section of Table 3-3, "all make-model groups," are

relatively stable: .13, .08,. 11,. 13, and .19. As the allowed range of ASales contracts and more

outliers are excluded, the N of data points shrinks, slowly at first but more rapidly at the end: 410,

399, 391, 378, 363, 332 and 285. Even though N gets smaller, t-values increase because getting

rid of the outliers increases the signal-to-noise (residual error) ratio. For example, the second,

third and sixth regression all produce coefficients of .13, but their t-values are .85, .94 and 1.23,

respectively. The last of these regressions produced a AJJSCan coefficient that is statistically

significant (t = 2.10, p < .05).

The second section of Table 3-3, "all unchanged make-model groups," probably has the most

meaningful results because it is limited to MMGs that were essentially the same as the previous

year and excludes the sales-distorting effects of models being introduced, redesigned or

discontinued. The first entry is based on the full set of 264 unchanged-MMG data points and it

has already been documented in Table 3-2. The A_USCan coefficient is + .29 and it is not

69
TABLE 3-3

ALL VEHICLES: SALES INCREASE (%) PER 1 PERCENT INCREASE IN US/CANADIAN CONTENT, MY 1995-98

coefficients for AUSCan in the regressions of ASales by AUSCan and other variables in 116 high-volume make-model groups

AUSCan = U.S./Canadian content on current MY AALA label - content on preceding MY AALA label J

ASales = log (current MY sales) - log (preceding MY sales)

Limited to make-model groups with sales changes in the following ranges:

b) no more than:

b) no more than:

coefficient

t-value

N of data points

is coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

Any

Any

.04

.23

410

.29

1.68

264

-.31

-1.01

230

.26

.94

156

100

-50

.13

.85

399

.26

1.53

262

-.05

-.22

224

.23

.83

155

82

-45

.13

.94

391

.26

1.69

258

-.06

-.25

221

.24

1.01

153

65

-39

.08

.56

378

.25

1.67

253

-.06

-.26

213

.23

.99

150

49

-33

.11

.88

363

.26

1.81

250

.10

.55

204

.24

1.06

149

35

-26

.13

1.23

332

.30

2.45*

230

.26

1.51

189

.44

2.18*

140

22

-18

.19

2.10*

285

.30

2.77**

204

.36

2.27*

163

.41

2.30*

124

All make-model groups

All unchanged make-model groups

Big 3 make-model groups

Unchanged Big 3 groups

* coefficient is statistically significant at the .05 level.

** coefficient is statistically significant at the .01 level.

t in 1995, AJJSCan = USCan(95) - 90.09 for Big 3; USCan(95) - 48.39 for transplant; USCan(95) - 4.69 for import.
TABLE 3-3 (continued)

Limited to make-model groups with sales changes in the following ranges:

Transplant/imported groups

Unchanged transplants/imports

Transplant make-model groups

Unchanged transplant groups

6) no more than:

6) no more than:

coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

Any

Any

.27

1.44

180

.43

2.06*

108

.02

.14

69

.35

1.62

44

100

-50

.14

.85

175

.38

1.89

107

.02

.14

69

.35

1.62

44

82

-45

.14

.90

170

.34

1.80

105

.02

.14

69

.35

1.62

44

65

-39

.17

1.12

165

.36

1.90

103

.06

.37

68

.35

1.62

44

49

-33

.21

1.49

159

.39

2.22*

101

.06

.37

68

.35

1.62

44

35

-26

.07

.62

143

.22

1.47

90

-.04

-.30

64

.22

1.29

41

22

-18

.09

.88

122

.20

1.61

80

.04

.33

60

.23

1.56

40

* coefficient is statistically significant at the .05 level.
statistically significant (t = 1.68, p > .05). The other entries in that section, with truncated ranges

of A_Sales, produce virtually the same AJJSCan coefficients: .26, .26, .25, .26, .30 and .30. N

shrinks slowly here, because most of the unchanged MMGs do not have volatile year-to-year sales

shifts: 264, 262, 258, 253, 250, 230 and 204. The last two AJJSCan coefficients are statistically

significant at the .05 and .01 levels, respectively.

The simple arithmetic average of the 14 AJJSCan coefficients in the first two sections of Table

3-3 is a heuristic indicator of the central tendency in these analyses. That average is .2. In other

words, a 10 percentage-point increase in USCan content is associated with a 2 percent increase in

sales. No claim is made that this is the "best," unbiased estimate from the data, nor have any error

bounds been computed for it.

The next two sections of Table 3-3 limit the analyses to vehicles with Big 3 nameplates. They

account for somewhat over half the data points. The regression procedure is the same as above,

except that the Nameplate variable is omitted, since all data points have Big 3 nameplates. The

initial regression, based on all 230 "Big 3" data points, yields a AJJSCan coefficient of- .31,

negative, but not statistically significant (t = -1.01). Truncating the allowed range of A_Sales to

± .7 weakens the coefficient to - .05. It stays at that level for two more truncations and then

changes sign and even becomes a statistically significant + .36 when |A_Sales| < .2 (t = 2.27,

p < .05). The regression results for unchanged Big 3 MMGs are more stable. The analysis for all

156 unchanged points produces a AJJSCan coefficient of + .26 that is not statistically significant

(t = .94). The first four truncated analyses produce nearly the same results. The last two

regressions produce higher coefficients, .44 and .41 that are both statistically significant.

The second page of Table 3-3 analyzes non-Big 3 cars (transplants and imports). The first two

sections of this page analyze transplants and imports together. The regressions include the

Nameplate variable, and it has two possible values: transplant or import. In the uppermost

section, where all transplant/import MMGs are included, the AJJSCan coefficients range from

+ .07 to + .27. None of them are statistically significant. In the analyses of unchanged

transplant/import MMGs, the coefficients are slightly higher, ranging from + .20 to + .43; the first

and the fifth are statistically significant at the .05 level.

When the regressions are limited to transplant models only, and all of these are included, even the

ones with redesigns, etc., the AJJSCan coefficients are close to zero, ranging from - .04 to + .06.

However, when the analyses are further limited to transplants without important year-to-year

model changes, the coefficients are all positive, ranging from + .22 to + .35.

Table 3-3 shows more or less the same relationship between AJJSCan and A_Sales for Big 3,

transplant and import vehicles, or at least that the relationship is not obviously stronger in one of

the groups than in the others.

The two pages of Table 3-4 display all the regressions in Table 3-3, but for passenger car MMGs

only. Just under two-thirds of the MMGs are passenger cars. The regression procedure is the

same as in Table 3-3, except that the Vehicle Type variable is omitted, since all vehicles are cars.

It is immediately noticeable that the coefficients are more positive than in Table 3-3, often

72
TABLE 3-4

PASSENGER CARS: SALES INCREASE (%) PER 1 PERCENT INCREASE IN US/CANADIAN CONTENT, MY 1995-98

coefficients for AUSCan in the regressions of ASales by AUSCan and other variables in 78 high-volume make-model groups

AUSCan = U.S./Canadian content on current MY AALA label - content on preceding MY AALA label %

ASales = log (current MY sales) - log (preceding MY sales)

Limited to make-model groups with sales changes in the following ranges:

'o) no more than:

0) no more than:

coefficient

t-value

N of data points

s coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

Any

Any

.30

1.22

267

.54

2.61**

169

.37

.86

137

.71

1.96

89

100

-50

.41

2.06*

261

.54

2.61**

169

.50

1.40

133

.71

1.96

89

82

-45

.42

2.30*

255

.51

2.71**

167

.51

1.54

131

.70

2.19*

88

65

-39

.43

2.47*

247

.49

2.70**

163

.55

1.72

126

.67

2.17*

86

49

-33

.41

2.72**

235

.52

2.98**

160

.54

2.05*

118

.69

2.31*

85

35

-26

.34

2.69**

213

.46

3.06**

146

.55

2.38*

108

.72

2.62*

79

22

-18

.35

3.18**

179

.43

3.31**

128

.63

3.14**

88

.63

2.62*

67

All make-model groups

All unchanged make-model groups

Big 3 make-model groups

Unchanged Big 3 groups

* coefficient is statistically significant at the .05 level.

** coefficient is statistically significant at the .01 level.

t in 1995, AUSCan = USCan(95) - 90.09 for Big 3; USCan(95) - 48.39 for transplant; USCan(95) - 4.69 for import.
TABLE 3-4 (continued)

Limited to make-model groups with sales changes in the following ranges:

Transplant/imported groups

Unchanged transplants/imports

Transplant make-model groups

Unchanged transplant groups

b) no more than:

6) no more than:

coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

Any

Any

.30

1.22

130

.50

2.02*

80

.26

1.10

45

.46

1.73

30

100

-50

.34

1.59

128

.50

2.02*

80

.26

1.10

45

.46

1.73

30

82

-45

.33

1.67

124

.45

1.94

79

.26

1.10

45

.46

1.73

30

65

-39

.35

1.77

121

.47

2.07*

77

.26

1.10

45

.46

1.73

30

49

-33

.39

2.14*

117

.53

2.50*

75

.26

1.10

45

.46

1.73

30

35

-26

.19

1.30

105

.32

1.95

67

.15

.82

42

.31

1.62

28

22

-18

.15

1.12

91

.26

1.73

61

.16

.94

40

.31

1.62

28

* coefficient is statistically significant at the .05 level.
reaching statistical significance at the .01 level. The 14 regression results for all passenger car

MMGs (first two sections of Table 3-4) produce A_USCan coefficients ranging from + .30 to

+ .54. Ten of the 14 are significant at the .01 level and only one is not statistically significant.

AUSCan coefficients are even larger when the data are limited to Big 3 passenger cars, ranging

from + .37 to + .72, and eight of them are statistically significant. The second page of Table 3-4

shows positive A_USCan coefficients for transplants/imports as well, ranging from + . 15 to + .53;

5 of 14 are statistically significant. Even the analysis of transplant models only, based on

substantially fewer data points, produces uniformly positive coefficients.

If the coefficients for passenger cars are higher than in the all-vehicles analyses, it can only be that

the coefficients for light trucks are lower or even negative. Table 3-5, a set of regressions for

light truck MMGs only, shows a lot of negative AJUSCan coefficients, some of which are

statistically significant. These regressions include the Vehicle Type variable, and it has three

possible values: pickup, SUV or van. The first 14 regressions in Table 3-5 include all light truck

MMGs: Big 3, transplant and imported. The A_USCan coefficients range from - .56 to + .01 and

are statistically significant in one case; however, none of the coefficients for the unchanged

MMGs are statistically significant. When the analyses are limited to Big 3 light trucks, the

AUSCan coefficients are just a shade more negative; again none of the coefficients for the

unchanged MMGs are statistically significant. The coefficients for transplants and imports, on the

second page of Table 3-5, are more positive than for the Big 3, ranging from - .53 to + .40; all but

one of the 14 coefficients for unchanged MMGs are positive.

These mixed but often negative coefficients for light trucks are an important caveat for the results

of this chapter. There does not appear to be any intuitive reason to suspect a negative effect in

light trucks. The findings suggest that the various relationships between USCan content and

sales, although real enough in a statistical sense, might not have that much to do with cause and

effect. Among passenger cars, certain high-volume make-models that drive the regressions,

specifically transplants such as Honda had increasing USCan content and sales, while other highvolume make-models, specifically Big 3 models such as General Motors, lost USCan content [to

Mexico] and sales. But among light trucks, the transplants that gained USCan content did not

particularly increase their sales, while some high-volume Big 3 models, especially Chrysler and

General Motors lost USCan content [to Mexico] while sales boomed. If the relationship in cars

were "causal" it would not likely be reversed in light trucks, but if the pattern in cars is more of a

coincidence (i.e., the sales increases and decreases are essentially due to factors other than USCan

content), there could more easily be the opposite pattern in trucks.

Nevertheless, the generally positive coefficients of this chapter, even though they fall short of

proving that USCan content benefits sales, at least do not suggest that increasing USCan content

does sales any harm.

In all the preceding regressions, the definition of A_USCan in 1996, 1997 and 1998 was the actual

year-to-year change, while a less direct surrogate had to be used in 1995. Did the inclusion of the

1995 data points distort the regressions or push the results in one direction? Table 3-6 repeats the

principal regressions of this chapter, the first two sections of Table 3-3, but using only the 317

data points from model years 1996-98, and not the 93 data points for MY 1995. The AJJSCan

75
TABLE 3-5

LIGHT TRUCKS: SALES INCREASE (%) PER 1 PERCENT INCREASE IN US/CANADIAN CONTENT, MY 1995-98

coefficients for AUSCan in the regressions of ASales by AUSCan and other variables in 38 high-volume make-model groups

A_USCan = U.S./Canadian content on current MY AALA label - content on preceding MY AALA label $

ASales = log (current MY sales) - log (preceding MY sales)

Limited to make-model groups with sales changes in the following ranges:

o) no more than:

o) no more than:

coefficient

t-value

N of data points

is coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

Any

Any

-.11

-.36

143

-.21

-.62

95

-.69

-1.96

93

-.22

-.77

67

100

-50

-.29

-1.30

138

-.30

-.97

93

-.65

-2.07§

91

-.29

-.68

66

82

-45

-.31

-1.43

136

-.30

- 1.09

91

-.67

-2.34§

90

-.33

-.85

65

65

-39

-.56

-2.80§§

131

-.30

-1.09

90

-.70

-2.55 §

87

-.32

-.85

64

49

-33

-.37

- 1.86

128

-.30

- 1.09

90

-.42

- 1.42

86

-.32

-.85

64

35

-26

-.27

-1.55

119

-.12

-.53

84

-.22

-.85

81

-.01

-.03

61

22

-18

-.19

-1.10

106

.01

.04

76

-.10

-.42

75

.04

.15

57

All make-model groups

All unchanged make-model groups

Big 3 make-model groups

Unchanged Big 3 groups

§ coefficient is negative and statistically significant at the .05 level.

§§ coefficient is negative and statistically significant at the .01 level.

| in 1995, AUSCan = USCan(95) - 90.09 for Big 3; USCan(95) - 48.39 for transplant, USCan(95) - 4.69 for import.
TABLE 3-5 (continued)

Limited to make-model groups with sales changes in the following ranges:

Transplant/imported groups

Unchanged transplants/imports

Transplant make-model groups

Unchanged transplant groups

6) no more than:

6) no more than:

coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

coefficient

t-value

N of data points

Any

Any

-.43

- 1.37

50

.40

.92

28

-.41

-1.19

24

.03

.08

14

100

-50

-.51

-1.77

47

.20

.50

27

-.41

-1.19

24

.03

.08

14

82

-45

-.53

-1.87

46

.16

.41

26

-.41

-1.19

24

.03

.08

14

65

-39

-.46

-1.57

44

.16

.41

26

.01

.02

23

.03

.08

14

49

-33

-.03

-.09

42

.16

.41

26

.01

.02

23

.03

.08

14

35

-26

-.09

-.31

38

.07

.19

23

-.06

-.16

22

- .02

-.05

13

22

-18

.20

.92

31

.26

.94

19

.12

.61

20

.17

.76

12
TABLE 3-6

MY 1996-98 ONLY, ALL VEHICLES:

SALES INCREASE (%) PER 1 PERCENT INCREASE IN U.S./CANADIAN CONTENT

coefficients for AUSCan in the regressions of ASales by AUSCan and other variables in 116 high-volume make-model groups

AUSCan = U.S./Canadian content on current MY AALA label - content on preceding MY AALA label

ASales = log (current MY sales) - log (preceding MY sales)

All make-model groups

oo

All unchanged make-model groups

Limited to make-model groups with sales changes in the following ranges:

o) no more than:

o) no more than:

coefficient

t-value

N of data points

s coefficient

t-value

N of data points

Any

Any

-.28

-1.19

317

.30

1.46

202

100

-50

.04

.24

309

.30

1.46

202

82

-45

.06

.35

303

.30

1.52

200

65

-39

.06

.35

294

.28

1.51

196

49

-33

.16

1.01

281

.31

1.68

193

35

-26

.29

2.18*

257

.48

3.08**

179

22

-18

.31

2.58*

220

.44

3.28**

159

* coefficient is statistically significant at the .05 level.

** coefficient is statistically significant at the .01 level.
coefficients are fairly similar to those in Table 3-3, although more volatile as might be expected

from using fewer data. They range from - .28 to + .48; all but one are positive. The 14

coefficients average to + .21. That is essentially identical to the + .20 average of the first 14

A USCan coefficients in Table 3-3.

3.4 Relationships between USCan content and price

There is a perception - and it is supported by the survey responses of the manufacturers in

Chapter 7 - that cost-efficiency is one of the motives for relocating parts factories and/or

switching from outside suppliers in one country to another. Specifically, Japanese and Western

European manufacturers might save money by using fewer parts from their home countries and

more USCan parts at times when the USCan parts cost less. But the Big 3 might save by

acquiring fewer USCan and more Mexican parts. If these cost savings were passed directly to the

consumer on the make-models where they occurred, we would expect an association of USCan

content and price. If such association existed, there could further be an indirect effect on sales: a

change in USCan content causing lower prices in turn causing higher sales. It is important to

remember, though, that cost is not the same thing as price. A manufacturer who experiences a

cost-savings on a particular make-model is free to retain the savings as increased profit or to

spread the savings as price reductions on other make-models if that appears to be a better market

strategy. Even if USCan content is uncorrelated with retail prices it may still affect manufacturing

costs.

These hypotheses can be statistically assessed by performing regressions on the data file described

in Section 3.1. A_Price will now be the dependent variable, while A_USCan continues as the

principal independent variable. The data will be limited to current model years 1996, 1997 and

1998: we are only interested in the effect of actual year-to-year changes in USCan on prices, and

cannot use 1995 data, where the actual change in USCan from 1994 is unknown and AUSCan

was a surrogate measuring, as it were, the change in USCan perceived by the consumer.

Separate analyses are needed for Big 3 vehicles and those sold by foreign-based companies,

because the effects could be in opposite directions. In the Big 3, most of the limited movement in

parts was presumably between the United States/Canada and Mexico, although in most cases that

cannot be inferred directly from the labels, which only mention countries that contribute over 15

percent of the value of parts, or engines, or transmissions. Thus, lower USCan might result in

lower costs: a positive A_USCan coefficient. (That expectation could, in fact, be incorrect if a

substantial portion of the parts movement was to Japan or Western Europe rather than Mexico.)

In the foreign-based companies, a movement of parts from Japan or Western Europe to North

America might have lowered costs. If so, the higher the USCan content the lower the cost

(negative coefficient). Captive imports are deleted from the Big 3 data and Korean manufacturers

from the transplant/import data because they do not fit the paradigms just described.

Make-model groups that were substantially redesigned, with the same name or a new name, are

excluded in the first year of their redesign/rename because they essentially became different

vehicles and cannot be expected to have the same price. The other eight model-change

categories, such as "last year before redesign," "second year it existed," etc. are retained because

79
the basic vehicle is the same in the current and the previous year; however, the model-change

variable is kept in the regression because these factors could affect prices for marketing reasons.

Table 3-7 documents the regression of AJPrice by A_USCan and other variables for 160 Big 3

MMG data points of model years 1996-98. This model fits the data well, with overall F = 7.94

(14 model df, 145 error df, p < .0001) and R-squared = .4339. But the regression coefficient for

A_USCan is not statistically significant (t = -0.76). The observed effect, -.042 is quite weak and

its sign is inconsistent with the hypothesis that most of the parts movement in the Big 3 was

between U.S./Canada and Mexico. It associates, for example, a 0.42 percent reduction in prices

with a 10 percentage-point increase in USCan content - essentially little or no effect.

The intercept in this regression is .01957, and its interpretation is that the price inflation for

unchanged passenger cars was about 2 percent in 1998. Among vehicle types, pickups and SUVs

had significant positive coefficients, indicating that their prices rose faster than passenger car

prices. The various model-change-related categories had little effect on price4. The strongest

effect by far is the 5 percent price increase attributed to model year 1997 (t = 8.62). This

primarily reflects the changeover, starting with the 1997 Automotive News Market Data Book

from excluding to including the destination charge in the list price. Price increases were also

significantly higher than average in 1996 (t = 2.08), but only by 1.3 percent.

Table 3-8 limits the Big 3 analysis to the 116 data points that were not in any of the modelchange-related categories. The A_USCan coefficient is again negative, -.084, and stronger than in

the preceding regression but it is still not statistically significant (t = -1.20) and it is still weak in

practical terms. It associates a 0.84 percent reduction in prices with a 10 percentage-point

increase in USCan content.

Table 3-9 shows a regression of 118 data points of foreign-based manufacturers, excluding

Hyundai and Kia. Transplants and imports are both included; however, unlike the A_Sales

regressions, the Nameplate variable is not used (because we do not assume here that a change in

USCan content would have different effects on costs/prices in transplants and imports). The

A_USCan coefficient is +.03531 and it is not statistically significant (t = 0.48). This is a negligible

effect, and its sign is inconsistent with the hypothesis that movement from Japan or Western

Europe to North America should lower costs.

The intercept is -.00071, indicating essentially zero inflation in the "baseline" year 1998, when a

strong dollar presumably helped importers hold the line on prices. Prices escalated more for light

trucks than cars. There was a significant price increases in 1996; however, the 1997 increase

primarily reflects the inclusion of destination charges in the price computation.

4The two categories that might be expected to affect price - actual redesigns - are

excluded from the data. The "one make-model dropped from the MMG" category has a

significant negative effect because it just so happened, in this data set, that the highest-price makemodels were dropped.

80
TABLE 3-7: REGRESSION OF A_PRICE BY A_USCan

IN ALL 1996-98 BIG 3 MAKE-MODEL GROUPS

(excluding captive imports)

Dependent variable:

Aggregation method:

N of observations:

Weighting factor:

Degrees of freedom:

Model F value:

R-square:

A_PRICE (log of the ratio of current MY to preceding MY price)

by make-model group and current model year

160

SALES_2Y (sum of current MY and preceding MY sales)

14 model, 145 error

7.94 (p = .0001)

.4339

REGRESSION COEFFICIENTS

Parameter

INTERCEPT

A_USCAN

VEH TYP

CAR

PICKUP

SUV

VAN

CHG_MODL

NO CHANGE

LAST YRBF REDES

LASTYRBFRENAM

LAST YR IT EXIST

ADDL NAME INTROD

ONE NAME DROPPED

COMPETITOR INTRO

2ND YR IT EXIST

2ND YR AFT REDES

CURR YR

1996

1997

1998

Estimate

.01957

- .04199

.00000

.01155

.01664

- .00024

.00000

.01564

- .00432

-.01234

- .02064

- .06851

- .02140

- .00918

- .00409

.01253

.05001

.00000

t for HO:

Parameter=0

3.88

-0.76

1.87

2.36

-0.03

1.54

-0.34

-0.70

-1.21

-2.37

-0.85

-0.72

-0.52

2.08

8.62

Pr>|t|

.0002

.4490

.0642

.0195

.9732

.1262

.7363

.4868

.2276

.0189

.3975

.4743

.6027

.0388

.0001

81
TABLE 3-8: REGRESSION OF A_PRICE BY AJJSCan

IN UNCHANGED 1996-98 BIG 3 MAKE-MODEL GROUPS

(excluding captive imports)

Dependent variable:

Aggregation method:

N of observations:

Weighting factor:

Degrees of freedom:

Model F value:

R-square:

AJPRICE (log of the ratio of current MY to preceding MY price)

by make-model group and current model year

116

SALES_2Y (sum of current MY and preceding MY sales)

6 model, 109 error

13.39 (p = .0001)

.4243

REGRESSION COEFFICIENTS

Parameter

INTERCEPT

AJUSCAN

VEHTYP

CAR

PICKUP

SUV

VAN

CURR_YR

1996

1997

1998

Estimate

.01903

- .08398

t for HO:

Parameter^

3.50

-1.20

Pr>|t|

.0007

.2334

00000

00730

00907

00506

01754

05311

00000

1.01

1.22

-0.60

2.57

8.10

.3143

.2240

.5501

.0114

.0001

82
TABLE 3-9: REGRESSION OF A_PRICE BY AJJSCan

IN ALL 1996-98 TRANSPLANT/IMPORT MAKE-MODEL GROUPS

(excluding Korean manufacturers)

Dependent variable:

Aggregation method:

N of observations:

Weighting factor:

Degrees of freedom:

Model F value:

R-square:

A_PRICE (log of the ratio of current MY to preceding MY price)

by make-model group and current model year

118

SALES_2Y (sum of current MY and preceding MY sales)

13 model, 104 error

1.8O(p = .O523)

.1838

REGRESSION COEFFICIENTS

Parameter

INTERCEPT

AJJSCAN

VEH TYP

CAR

PICKUP

SUV

VAN

CHG MODL

NO CHANGE

LAST YRBF REDES

LASTYRBFRENAM

LAST YR IT EXIST

ADDL NAME INTROD

COMPETITOR INTRO

2ND YR IT EXIST

2ND YR AFT REDES

CURR YR

1996

1997

1998

Estimate

- .00071

.03531

.00000

.03777

.02771

.02317

.00000

.00359

.00463

.05292

- .06237

.02905

- .03008

.02442

.02887

.03753

.00000

t for HO:

Parameter=0

-0.07

0.48

2.37

1.56

0.70

0.20

0.08

0.85

- 1.27

0.43

- 1.05

1.69

2.44

2.92

Pr>|t

.9405

.6353

.0199

.1222

.4869

.8429

.9352

.3978

.2057

.6711

.2943

.0942

.0164

.0043

83
Table 3-10 limits the analysis to the 80 data points for entirely unchanged MMGs. The AJUSCan

coefficient is a negligible +.021 and it is not statistically significant (t = 0.28).

Large year-to-year changes in price are much rarer than extreme sales fluctuations. Only two

transplant/import data points, and no Big 3 data points had |A_Price| > .2. Exclusion of those two

points had little effect on the results.

These analyses showed that changes in USCan content in specific make-models had no significant

association with the retail prices in those make-models. As explained above, the results do not

preclude the possibility that changes in USCan content affected manufacturers' costs, because

cost-savings are not necessarily passed on as price reductions on the make-models where they

occur.

84
TABLE 3-10: REGRESSION OF A_PRICE BY AJJSCan

IN UNCHANGED 1996-98 TRANSPLANT/IMPORT MAKE-MODEL GROUPS

(excluding Korean manufacturers)

Dependent variable:

Aggregation method:

N of observations:

Weighting factor:

Degrees of freedom:

Model F value:

R-square:

A_PRICE (log of the ratio of current MY to preceding MY price)

by make-model group and current model year

80

SALES_2Y (sum of current MY and preceding MY sales)

6 model, 73 error

2.72 (p = .0193)

.1828

REGRESSION COEFFICIENTS

Parameter

INTERCEPT

A_USCAN

VEHJTYP

CAR

PICKUP

SUV

VAN

CURR_YR

1996

1997

1998

Estimate

- .00090

.02104

t for HO:

Parameter=0

-0.09

0.28

Pr>|t|

.9277

.7803

00000

02779

04274

02488

02851

03973

00000

1.73

2.08

0.74

2.28

2.95

.0880

.0414

.4596

.0254

.0042

85

CHAPTER 4

IMPORT DEPENDENCE IN MOTOR VEHICLES AND PARTS

COMPARED TO OTHER CONSUMER PRODUCTS, 1992-98

United States/Canadian (USCan) parts content did not rise in absolute terms after labels were

placed on new vehicles in accordance with the American Automobile Labeling Act (AALA).

Chapter 2 showed it declined from an average of 70 percent in model year 1995, the first year of

the labels, to 67.6 percent in model year 1998. But in 1995-98 the strong U.S. economy and

dollar must have worked to stimulate imports of all sorts of products. Maybe the growth of

import dependence in motor vehicles would have been even stronger if not for the AALA labels,

the U.S.-Japan Agreement on Autos and Auto Parts, and other measures. One way to evaluate

the effect of these measures is to examine trends in motor vehicles and parts relative to 27 other

selected consumer products such as appliances, clothing, etc., that are not regulated by the

AALA. (Although some of those products have mandatory or optional country-of-origin labels,

their labels did not come into existence or change significantly in or near 1995, the year the

AALA took effect.) The analyses of this chapter show that the longer-term growth in import

dependence among motor vehicles and parts from 1992 to 1998 was less than the average of the

27 other consumer industries - but in the years immediately before and after the AALA, it was

about the same as in the other industries. In other words, there is little evidence that the AALA

had any immediate effect on relative import dependence, although conceivably the AALA, the

U.S.-Japan Agreement and other measures could have been factors in the longer-term effect.

The analyses of this chapter are based on data issued by the U.S. Department of Commerce, and

they differ in a number of important ways from the information on the AALA labels and the

statistics considered in Chapters 2 and 3. Above all, the percentages here are for the United

States only, while AALA percentages are for the United States and Canada combined. Other

differences are described in Section 4.1. The trends should only be expected to resemble, not

correspond exactly, to the trends in Chapter 2.

4.1 The data base for comparing import dependence trends in various industries

The regulation that establishes labels for new vehicles in accordance with the AALA specifies

detailed procedures for computing what percent of the value of the parts was manufactured in the

United States or Canada1. In particular, the percentage shown on the label applies only to parts

content and does not include assembly labor or other factors that add value to the finished

lCode of Federal Regulations, Title 49, General Printing Office, Washington, 1998, Part

583.

87
vehicle2

. The percentage includes parts made in Canada as well as the United States. Directly

comparable statistics are not available for other consumer industries.

On the other hand, U.S. Industry and Trade Outlook, published annually by McGraw-Hill and

developed by the U.S. Department of Commerce and several private organizations3, tabulates

annual figures on U.S. production ("value of product shipments"), exports and imports in a large

number of industries including new motor vehicles and automotive parts/accessories. The tables

can be used to define import dependence as follows:

net imports = imports - exports

apparent domestic consumption = product shipments + net imports

net import dependence = (net imports / apparent domestic consumption) %

The Outlook statistics for motor vehicles and for parts differ in a number of important ways from

the information on the AALA labels:

• AALA statistics are calculated for each individual make-model, but the Outlook only

aggregates statistics for entire industries.

• Production statistics in the Outlook are for the United States only, while AALA

percentages are for the United States and Canada combined. In the Outlook, shipments

from the United States to Canada are included among exports, and from Canada to the

United States, among imports.

• The Outlook tallies all exports as well as imports, making it possible to calculate net

imports. The AALA only tells us the percentage of non-USCan parts in vehicles sold in

the United States, but nothing about the percentage of USCan parts in vehicles sold

outside the United States. Thus, the AALA cannot be used to tally exports, or net

imports.

2On July 28, 1999, NHTSA published a final rule (64 FR 40777) amending the regulation

implementing the AALA. Effective June 1, 2000, assembly and labor costs incurred for the

assembly of engines and transmissions are to be included in making country of origin

determinations for those parts. The new rule, however, was not in effect during the 1992-98 time

frame of the analyses of this chapter.

3U.S. Industry & Trade Outlook '98, McGraw-Hill, New York, 1998; U.S. Industry &

Trade Outlook '99, McGraw-Hill, New York, 1999.

88
• The Outlook statistics for motor vehicles add the entire value of any vehicle assembled in

the United States, including all transplants, to "value of product shipments" and the entire

value of any vehicle assembled outside the United States to "imports." During 1995-98,

the AALA considered only the value added by parts (and not by assembly labor, etc.) and

estimated what proportion of the value of the parts was USCan, regardless of where the

vehicle was assembled.

• The Outlook statistics are by calendar year while the AALA data are by model year.

• The Outlook statistics for motor vehicles include heavy trucks and buses as well as cars

and light trucks, but the AALA only applies to cars and light trucks.

• The Outlook statistics for parts/accessories include aftermarket parts and accessories as

well as the original parts in new vehicles, but the AALA only applies to the original parts.

In other words, neither the Outlook statistics for vehicles nor for parts should be expected to

correspond exactly or even closely to the industry-wide totals computed from AALA data in

Chapter 2, either in absolute terms or in the detailed year-to-year fluctuations. Nevertheless,

there is reason to believe that the overall trends in the Outlook statistics will more or less mirror

the trends in the AALA data. If net import dependence, as defined in the Outlook, were to

increase substantially, say five percentage points or more, we would expect a corresponding

increase in non-USCan parts in AALA labels, and vice-versa. Thus, the statistics in this chapter

may be satisfactory for a heuristic, directional comparison of trends in motor vehicles and parts

relative to other industries, but not for a quantitative analysis of the relative effect of the AALA

Even though the Outlook statistics are not directly comparable to the AALA data, they have two

advantages: (1) The Outlook statistics for motor vehicles and parts are directly comparable to the

Outlook statistics for other consumer products. (2) Outlook statistics exist even before 1995, the

first year of the AALA labels. That permits a comparison of 1995-98, when vehicles had the

labels, to 1992-94, when they did not.

Whenever possible, statistics are derived from U.S. Industry & Trade Outlook '99, because it has

final numbers from 1992 through 1996 (1997 for exports and imports) and estimates for 1997

(production) and 1998. Outlook '98 only has forecasts for 1998, but had to be used for a few

industries omitted in the 1999 book. Industries are classified by Standard Industry Classifications

(SIC). "Motor Vehicles" include SIC 3711 (motor vehicles and car bodies) and 3713 (truck and

bus bodies). Outlook '99 presents the following statistics, in millions of current dollars, for U.S.

production ("product data - value of shipments"), imports and exports in SIC 3711 and 37134:

*U.S. Industry & Trade Outlook '99, McGraw-Hill, New York, 1999, p. 36-12. ,

89
Production

151,629

168,682

201,307

205,644

205,930

217,694

220,141

Imports

59,805

67,803

78,806

84,042

86,992

92,369

94,032

Exports

17,539

18,399

22,123

21,522

22,904

24,525

27,854

1992

1993

1994

1995

1996

1997

1998

They are used to compute net imports, apparent U.S. consumption and percent net import

dependence.

Net

Imports

42,266

49,404

56,683

62,520

64,088

67,844

66,178

Consumption

193,895

218,086

257,990

268,164

270,018

285,538

286,319

Import

Dependence (%

21.80

22.65

21.97

23.31

23.73

23.76

23.11

1992

1993

1994

1995

1996

1997

1998

These statistics show fluctuating import dependence, but an overall trend toward slightly higher

import dependence in later years. Although differing on a year-to-year basis, they convey the

same general impression as the overall results in Section 2.2: that U.S./Canadian content and

assembly have both declined slightly in recent years, while Mexican or overseas parts and

assembly increased.

The corresponding statistics for automotive parts (SIC 3465, 3592, 3647, 3691, 3694 and 3714)

are as follows5:

1992

1993

1994

1995

1996

1997

1998

Production

104,109

118,293

134,462

143,859

148,201

152,647

157,074

'Ibid., p. 37-5.

Imports

21,055

23,461

27,267

28,800

30,837

33,093

34,913

Exports

22,437

26,064

27,927

29,323

30,285

35,150

38,489

90
Net

Imports

- 1,382

- 2,603

- 660

- 523

+ 552

- 2,057

-3.576

Consumption

102,727

115,690

133,802

143,336

148,753

150,090

153.498

Import

Dependence (%

- 1.35

-2.25

-0.49

-0.36

+0.37

- 1.37

-2.33

1992

1993

1994

1995

1996

1997

1998

The United States was a net exporter of parts in 1992-93, had close to a zero trade balance in

1994-96 and again became a net exporter in 1997-98. The balance of trade is much more

favorable for parts than for finished motor vehicles, because many parts are "exported" to Canada

and Mexico where they are assembled and then "re-imported" as finished vehicles. But the longterm trend is essentially the same: no dramatic change in import dependence.

These statistics for motor vehicles and parts were then compared to 27 other important consumer

products from industries not regulated by the AALA, the U.S.-Japan Agreement on Autos and

Auto Parts, etc. The criteria for selecting the products included.

• Availability of statistics in Outlook '99 or, at least, Outlook '98.

• They should be manufactured goods. Raw materials such as coal or cement, and services

such as education or financial management are not included.

• They should be final products, sold at least in substantial part to individual consumers.

Intermediate products or goods purchased almost exclusively by manufacturers or

corporations, such as semiconductors, airplanes or oilfield machinery, are excluded.

• They should be large industries, with annual sales of $10 billion or more. In some cases,

statistics for reasonably similar products with lower sales have been aggregated to add up

to more than $10 billion, even though they were listed in separate chapters in Outlook

(e.g., power hand tools with lawn and garden equipment).

• Products that are unsuited for large-scale export or import because people intrinsically

need a local product, such as newspapers, are excluded.

The purpose of these criteria is to generate many "control groups" of products that: (1) are

bought by more or less the same people who buy new motor vehicles - consumers - and who may

have a similar interest in "buying American'Tbuying imported" whether the product is a car, a

television or a suit. (2) are not regulated by the AALA, the U.S.-Japan Agreement on Autos and

Auto Parts, etc. and did not introduce or significantly reformat their country-of-origin information

in or near 1995. That is not to say the control group industries lack country-or-origin information

or are unregulated. On the contrary, many if not most of these products carry optional "Made in

91
" labels and the Federal Trade Commission has detailed regulations specifying under what

circumstances a product may be labeled "Made in U.S.A." For textile, wool and fur products,

labels have been mandatory since long before 1992 and subject to additional regulations6. In all

the control groups, however, the labels were essentially the same in 1992-94 as in 1995-98. Thus,

we will be able to investigate if the import-dependence trend in vehicles and parts diverged from

the trend in the control groups after the introduction of AALA labels on vehicles in 1995.

The 27 groups of consumer products were defined as follows. Statistics are from Outlook '99,

except groups marked with an asterisk are based on Outlook '98:

1. Plumbing parts - sinks, toilets, bathtubs and fixtures (SIC 3088, 3261, 3431 and 3432)

2. Lighting fixtures, lamps (SIC 3645, 3646 and 3648)*

3. Carpets and rugs (SIC 227)

4. Paper napkins, towels and tissue (SIC 2676)*

5. Drugs and Pharmaceuticals (SIC 283)

6. Cosmetics, soap and detergents (SIC 284)*

7. Tires (SIC 3011)

8. Power-driven hand tools plus lawn and garden equipment (SIC 3524 and 3546)

9. Air-conditioning and heating equipment (SIC 3585)

10. Farm machinery and equipment (SIC 3523)

11. Photographic equipment and supplies (SIC 3861)

12. Book publishing (SIC 2731)

13. Greeting cards, stationery, forms, looseleafs, bank checks, etc. (SIC 2771 plus 2782)

14. Computers and peripherals (SIC 3571, 3572, 3575 and 3577)

15. Telephone apparatus [customer and company equipment] (SIC 3661)

16. Apparel (SIC 23 minus SIC 239)

17. Curtains, household cloth furnishings and other non-apparel textile products (SIC 239)

18. Leather products [shoes, luggage, purses, gloves, etc.] (SIC 2386, 314, 315, 316 and 317)

19. Alcoholic beverages (SIC 2082, 2084 and 2085)

20. Meat, poultry and dairy products (SIC 2011, 2013, 2015 and 202) *

21. Other processed foods [all processed foods except alcoholic beverages, meat, poultry and

dairy products] (SIC 20 minus SIC 2011, 2013, 2015, 202, 2082, 2084 and 2085)*

22. Household audio and video equipment (SIC 3651)*

23. Household furniture (SIC 251)

24. Household appliances [cooking, refrigerators, laundry, vacuum cleaners, etc.] (SIC 363)

25. Recreational goods [sporting goods, dolls, toys, games, bicycles, motorcycles, recreational

boats] plus musical instruments(SIC 3732, 3751, 3942, 3944, 3949, and 3931]

26. Jewelry [precious plus costume] (SIC 3911 plus 3961)

27. Medical instruments and supplies (SIC 384)

6

Senie, A.L., Federal Laws on "MADE IN THE U.S.A." Labeling, U.S. Department of

Commerce, www.tradecompass.com/library/legal/fedus.htm. Complying with the Made In the

USA Standard, Federal Trade Commission, www.ftc.gov/bcp/conline/pubsfouspubs/madeusa.htm.

Part 303- Rules and Regulations under the Textile Fiber Products Identification Act (Footnote),

Arent Fox, www.webcom. com/%7Elewrose/trr/textile.html.

92
4.2 Basic statistics and trends, 1992-98

Table 4-1 shows the apparent U.S. consumption, production (value of product shipments),

imports, exports and import dependence for each of these industries in calendar year 1998, and

compares them to motor vehicles and parts. The size of these industries, as measured by apparent

consumption, ranges from just under $10 billion (plumbing parts; cards and stationery) to $267

billion for "other processed foods," almost as large as motor vehicles ($286 billion). However,

the sum of the 27 control groups, $1,256 trillion, far exceeds spending on motor vehicles.

Import dependence ranges from -11.87 percent for medical and dental instruments to 79.97

percent for leather goods. Net import dependence for the 27 control groups together is 11.55

percent. Thus, finished motor vehicles are higher than average, at 23.11 percent, while parts and

accessories are lower than average, at -2.33 percent.

Manufactured products fall into four categories of import dependence. The United States is a

major net exporter of air conditioners and medical/dental instruments (also aircraft, but they are

excluded here since little of the product is purchased by individual consumers). Many products,

including automotive parts, have net import dependence in the positive or negative single digits,

indicating net self-sufficiency. Quite a few important industries, such as computers, furniture and

appliances have moderate import dependence (14-26%), resembling finished motor vehicles. The

United States is a heavy net importer of apparel, leather goods, audio and video, recreational

goods and jewelry.

Table 4-2 ranks motor vehicles, auto parts and the 27 control group products from lowest to

highest percent import dependence in each of the years 1992 to 1998. The industries are listed in

the order of their 1992 ranking. Most industries stayed at about the same rank throughout 1992-

98. Air conditioners and medical instruments had the two lowest rates of net imports (highest

percent net exports) in each year. Recreational goods, jewelry, apparel, audio/video and leather

products had the highest import dependence in all years. A few industries had major growth in

import dependence during 1992-98: drugs (dropped from 9th to 16th), hand tools and garden

equipment (4* to 10th), computers (19th to 24th), book publishing (3rd to 7th) and furniture (16th to

20th). Only telephone apparatus (18th to 12th) and farm machinery (8th to 4th) gained selfsufficiency by four or more ranks. Motor vehicles and parts were neither big gainers nor losers,

but did slightly better than average: motor vehicles improved from 24th to 23rd and parts from 10th

to 8th.

During 1992-98, import dependence for the composite of 27 control group industries gradually

increased from 7.34 to 11.55 percent, while it increased a bit less in motor vehicles, 21.80 to

23.11 percent, and it decreased in parts from -1.35 to -2.33 percent (net exports increased):

93
TABLE 4-1: 1998 STATISTICS FOR 29 INDUSTRIES (in millions of Dollars)

Product

1 Plumbing parts

2 Light fixtures

3 Carpets & rugs

4 Paper napkins, towels, tissue

5 Drugs

6 Cosmetics, soap, detergents

7 Tires

8 Hand tools & garden eqpt

9 A/C & heating eqpt

10 Farm machinery & eqpt

11 Photo eqpt & supplies

12 Book publishing

13 Cards & stationery

14 Computers & peripherals

15 Telephone apparatus

16 Apparel

17 Curtains, household cloth prods

18 Leather products

19 Alcoholic beverages

20 Meat & dairy products

21 Other processed foods

22 Household audio & video

23 Household furniture

24 Household appliances

25 Recreational goods

26 Jewelry

27 Medical/dental instruments

ALL OF THE ABOVE

Finished motor vehicles

Auto parts & accessories

Apparent

Consumption

9,165

10,713

11,350

17,543

89,937

47,229

15,574

10,289

22,604

14,411

24,750

19,800

8,601

136,700

34,467

96,307

i 26,660

21,332

32,504

157,985

267,079

25,189

32,966

24,480

40,228

10,160

48,340

1,256,363

286,319

153,498

Production

8,685

8,909

11,210

18,183

83,788

49,651

14,571

10,302

25,198

15,028

20,000

20,475

8,324

101,500

33,767

52,679

22,930

4,272

27,909

164,303

268,615

9,571

27,591

20,492

23,433

5,785

54,080

1,111,251

220,141

157,074

Imports

780

2,515

950

429

18,263

2,511

3,454

1,772

2,857

3,772

9,600

1,365

513

79,300

8,650

51,883

4,925

17,875

6,005

4,214

19,209

19,788

7,058

7,138

22,519

4,920

7,010

309,275

94,032

34,913

Exports

300

711

810

1,069

12,114

4,933

2,451

1,785

5,451

4,389

4,850

2,040

236

44,100

7,950

8,255

1,195

815

1,410

10,532

20,745

4,170

1,683

3,150

5,724

545

12,750

164,163

27,854

38,489

Import

Dependence (%)

5.24

16.84

1.23

- 3.65

6.84

- 5.13

6 .44

- 0.13

-11.48

- 4.28

19.19

- 3.41

3.22

25.75

2.03

45.30

13.99

79.97

14.14

- 4.00

- 0.58

62.00

16.30

16.29

41.75

43.06

-11.87

11.55

23.11

-2.33
Ul

TABLE 4-2: 29 INDUSTRIES RANKED FROM LOWEST TO HIGHEST IMPORT DEPENDENCE, 1992-98

Product 1992 1993 1994 1995 1996 1997 1998

A/C & heating eqpt

Medical/dental instruments

Book publishing

Hand tools & garden eqpt

Cosmetics, soap, detergents

Paper napkins, towels, tissue

Meat & dairy products

Farm machinery & eqpt

Drugs

Auto parts & accessories 10 8 10 9 10

1

2

3

4

5

6

7

8

9

1

2

3

4

5

7

9

6

10

2

1

3

5

4

6

7

13

8

2

1

5

6

3

7

4

10

11

2

1

6

9

4

7

5

3

13

2

1

6

9

4

7

5

3

14

2

1

1

10

3

6

5

4

16

Other processed foods

Carpets & rugs

Plumbing parts

Cards & stationery

Tires

Household furniture

Curtains, household cloth prods

Telephone apparatus

Computers & peripherals

Alcoholic beverages

Light fixtures

Household appliances

Photo eqpt & supplies

11

12

13

14

15

16

17

18

19

20

21

22

23

11

12

13

14

16

17

19

15

23

18

21

20

22

9

11

14

12

16

18

20

15

23

17

21

19

22

8

12

15

13

16

20

18

14

23

17

21

19

22

8

11

15

14

16

20

17

12

23

18

21

19

22

10

11

15

13

16

20

18

12

23

19

21

17

22

9

11

14

13

15

20

17

12

24

18

21

19

22

Finished motor vehicles 24 24 24 24 24 24 23

Recreational goods

Jewelry

Apparel

Household audio & video

Leather products

25

26

27

28

29

25

27

26

28

29

25

27

26

28

29

25

27

26

28

29

25

27

26

28

29

25

26

27

28

29

25

26

27

28

29
Net Import Dependence (%)

1992

1993

1994

1995

1996

1997

1998

Motor

Vehicles

21.80

22.65

21.97

23.31

23.73

23.76

23.11

Automotive

Parts

-1.35

-2.25

-0.49

-0.36

+0.37

- 1.37

-2.33

27 Other

Industries

7.34

7.99

8.79

8.98

9.03

10.03

11.55

4.3 Before vs. after the AALA labels: 1992-94 vs. 1995-98

Potentially the best single indicator of the possible impact of AALA labels and the U.S.-Japan

Agreement on Autos and Auto Parts is to compare import dependence for 1995-98, when motor

vehicles had the labels and the Agreement was in effect7, to 1992-94, the "before" period. If any

of these measures made a really big difference in the marketplace, we would expect to see a

change in import dependence for 1995-98 vs. 1992-94, perhaps not in absolute terms, but

certainly relative to the 27 control group industries unaffected by the AALA labels (subject to the

caveat that the import-dependence statistics in this chapter do not correspond exactly to the

USCan parts information on the labels). In other words, we have a 2x2 experimental design

where AALA labels and the Agreement are the "treatment" received only by the automotive

industries in 1995-98:

Automotive industries

Control group industries

1992-94 1995-98

Table 4-3 ranks motor vehicles, parts and 27 control group industries from lowest to highest

import dependence in 1992-94 and in 1995-98. Import dependence for 1992-94 [1995-98] is

computed by adding up the production, exports and imports for 1992-94 [1995-98] and, as usual,

dividing net imports by apparent consumption. Based on ranks, auto parts and accessories

improved slightly relative to the control group industries, from 9th place in 1992-94 to 8th place in

1995-98. Finished motor vehicles ranked 24* in both time periods. There was no dramatic shift

away from import dependence (like farm machinery, that changed from 11th to 3rd) or towards it

(like drugs, moving from 8th to 14*).

7The Agreement was signed on June 28, 1995 (see Section 1.3).

96
TABLE 4-3

29 INDUSTRIES RANKED FROM LOWEST TO fflGHEST IMPORT DEPENDENCE

BEFORE AALA (1992-94) VS. AFTER AALA (1995-98)

Product

Medical/dental instruments

A/C & heating eqpt

Book publishing

Hand tools & garden eqpt

Cosmetics, soap, detergents

Paper napkins, towels, tissue

Meat & dairy products

Drugs

Auto parts & accessories

Other processed foods

Farm machinery & eqpt

Carpets & rugs

Plumbing parts

Cards & stationery

Telephone apparatus

Tires

Household furniture

Alcoholic beverages

Curtains, household cloth prods

Household appliances

Light fixtures

Photo eqpt & supplies

Computers & peripherals

Finished motor vehicles

Recreational goods

Apparel

Jewelry

Household audio & video

Leather products

Import Dependence

1992-94 1995-98

Rank

24

-1.32

22.14

Rank

24

-0.94

23.48

Change

1

2

3

4

5

6

7

8

-9.65

-9.39

-4.43

-3.91

-3.52

-2.85

-2.38

-1.34

1

2

6

9

4

7

5

14

-12.28

-10.10

-3.20

-0.82

-4.62

-3.03

-3.93

3.95

-2.63

-0.71

1.24

3 . 09

-1.11

-0.18

-1.56

5.29

0.38

10

11

12

13

14

15

16

17

18

19

20

21

22

23

-0.77

-0.09

0.09

2.94

2.97

8.26

9.18

9.68

9.95

10.00

10.50

11.52

14.58

15.90

10

3

11

15

13

12

16

20

17

18

19

21

22

23

-0.49

-5.10

1.37

5.07

3.09

2.78

7.02

13.95

11.81

11.95

12.77

15.32

18.30

22.60

0.29

-5.01

1.28

2.14

0.12

-5.48

-2.16

4.28

1.86

1.95

2.26

3.80

3.73

6.70

1.34

25

26

27

28

29

31.65

35.19

36.07

58.67

68.92

25

27

26

28

29

36.79

41.16

40.15

60.29

76.32

5.13

5.97

4. 08

1.62

7.40

ALL EXCEPT AUTOS & PARTS 8.07 9.95 1.88

97
The right column of Table 4-3 indicates the change in import dependence: the arithmetic

difference between the percent import dependence in 1995-98 and 1992-94. For auto parts and

accessories, import dependence increased by 0.38 percent; for finished motor vehicles, by 1.34

percent. Both of these are slightly better, but not really very different from the 1.88 percent

increase in the combined 27 control group industries. These numbers do not suggest a large

impact for the AALA "treatment" when import dependence is measured relative to other

industries "untreated" with the AALA/Agreement.

Table 4-4 ranks the 29 industries by their change in import dependence from 1992-94 to 1995-98

(the right column of Table 4-3). Eight products, ranging from telephone apparatus to paper

napkins, towels and tissue, were able to reduce import dependence (or increase relative net

exports) from 1992-94 to 1995-98. Five industries, ranging from recreational goods to leather

products, slid 5 percent or more toward greater import dependence. Auto parts and finished

motor vehicles are in neither extreme group. Instead, they are both close to the median of the 29

industries, parts ranking 11th and finished motor vehicles ranking 14th. They behaved like the

"typical" industries unaffected by the AALA/Agreement.

4.4 Short-term change: just before AALA (1994) vs. just after AALA(1995)

Theoretically, the effect of the AALA, if there is any, could take place immediately, in 1995, or it

could lag (if consumers are not initially aware of the labels) or even lead (if manufacturers move

operations to North America in anticipation of the labels). It could be a one-time effect, or

gradual and cumulative. But certainly one change we might look for is 1994 vs. 1995. We

already saw in Section 2.2 that there was no dramatic shift, in absolute terms, from overseas to

U.S./Canadian assembly between 1994 and 1995. Table 4-5 explores the short-term effect

relative to other industries. It ranks the 29 consumer products based on the change in import

dependence from 1994 to 1995.

There was no major shift in the direction of trade from 1994 to 1995. Only farm machinery,

telephone apparatus and leather products changed import dependence by more than 2 percent in

either direction. The 27 control group products, as a whole, increased import dependence by 0.19

percent. Auto parts were almost exactly at the median, increasing by 0.13 percent. Finished

motor vehicles, on the other hand, had the 4th largest increase of import dependence among the 29

industries. Still, this increase, 1.34 percent, is only slightly larger than the median for the 29

products. In any case, Table 4-5 confirms that the AALA was not followed by an immediate

reduction of import dependence for automotive products, relative to the rest of the economy.

4.5 Longer-term change: 1992 vs. 1998

A better way to study the possible longer-term, cumulative effects of the AALA, the U.S.-Japan

Agreement on Autos and Auto Parts and other measures that have affected the international auto

industry is to study import dependence in two widely separated years. Table 4-6 compares the

automotive industry to other products over a longer period of time by ranking the 29 industries on

the change in import dependence from the single year 1992 to the single year 1998. Nine

98
TABLE 4-4

29 INDUSTRIES RANKED BY CHANGE IN IMPORT DEPENDENCE

BEFORE AALA (1992-94) VS. AFTER AALA (1995-98)

Product

Telephone apparatus

Farm machinery & eqpt

Medical/dental instruments

Tires

Meat & dairy products

Cosmetics, soap, detergents

A/C & heating eqpt

Paper napkins, towels, tissue

Cards & stationery

Other processed foods

Auto parts & accessories

Book publishing

Carpets & rugs

Finished motor vehicles

Household audio & video

Alcoholic beverages

ALL EXCEPT AUTOS AND PARTS

Change in Import

Dependence

Rank %

11

14

0.38

1.34

1.88

Import Dependence (%)

1992-94 1995-98

1

2

3

4

5

6

7

8

9

10

-5.48

-5.01

-2.63

-2.16

-1.56

-1.11

-0.71

-0.18

0.12

0.29

8.26

-0.09

-9.65

9.18

-2.38

-3.52

-9.39

-2.85

2.97

-0.77

2.78

-5.10

-12.28

7.02

-3 .93

-4.62

-10.10

-3.03

3.09

-0.49

-1.32

22.14

8.07

-0.94

12

13

1

1

.24

.28

-4

0

.43

.09

-3

1

.20

.37

23.48

15

16

1.

1.

62

86

58

9

.67

.95

60

11

.29

. 81

9.9 5

Curtains, household cloth prods

Plumbing parts

Household appliances

Hand tools & garden eqpt

Photo eqpt & supplies

Light fixtures

Jewelry

Household furniture

Recreational goods

Drugs

Apparel

Computers & peripherals

Leather products

17

18

19

20

21

22

23

24

25

26

27

28

29

1.95

2.14

2.26

3.09

3.73

3.80

4.08

4.28

5.13

5.29

5.97

6.70

7.40

10.00

2.94

10.50

-3.91

14.58

11.52

36.07

9.68

31.65

-1.34

35.19

15.90

68.92

11.95

5.07

12.77

-0.82

18.30

15.32

40.15

13.95

36.79

3.95

41.16

22.60

76.32

99
TABLE 4-5

29 INDUSTRIES RANKED BY CHANGE IN IMPORT DEPENDENCE

JUST BEFORE AALA (1994) VS. JUST AFTER AALA (1995)

Product

Change in Import

Dependence

Rank %

Import Dependence (%)

1994 1995

Farm machinery & eqpt

Telephone apparatus

Tires

Meat & dairy products

Medical/dental instruments

A/C & heating eqpt

Alcoholic beverages

Cards & stationery

Other processed foods

Cosmetics, soap, detergents

Jewelry

Curtains, household cloth prods

Auto parts & accessories

ALL EXCEPT AUTOS AND PARTS

Plumbing parts

Recreational goods

Household appliances

Paper napkins, towels, tissue

Computers & peripherals

Book publishing

Light fixtures

Hand tools & garden eqpt

Household furniture

Household audio & video

Carpets & rugs

Apparel

Finished motor vehicles

1

2

3

4

5

6

7

8

9

10

11

12

-3.88

-3.88

-1.54

-1.13

-1.01

-0.77

-0.14

-0.13

-0.12

0.03

0.09

0.10

3.64

7.86

9.73

-2.85

-10.95

-8.20

9.96

3.29

-0.73

-4.08

37.93

10.87

-0.24

3.99

8 .18

-3.98

-11.96

- 8. 97

9. 82

3.16

-0.85

- 4. 04

38.02

10.97

13

14

15

16

17

18

19

20

21

22

23

24

25

26

0.13

0.19

-0.49

8.79

0.43

0.46

0.53

0.62

0.67

0.77

0.84

0.90

1.25

1.31

1.31

1.32

4. 08

31.37

10.58

-3.17

19.76

-4.11

12.36

-3.59

10.49

60.15

0.68

36.25

1.34 21.97

-0.36

8.98

4 .51

31.83

11.10

-2.55

20.43

-3.34

13.20

-2.68

11.73

61.46

1.99

37.57

23.31

Drugs

Photo eqpt & supplies

Leather products

27

28

29

1

1

2

.70

.91

.66

-0

16

70

.89

.51

.09

0.

18.

72.

81

42

75

100
TABLE 4-6

29 INDUSTRIES RANKED BY LONG-TERM CHANGE IN IMPORT DEPENDENCE

1992 VS. 1998

Product

Change in Import

Dependence

Rank %

Import Dependence (%)

1992 1998

Telephone apparatus

Medical/dental instruments

Farm machinery & eqpt

Tires

Cosmetics, soap, detergents

Meat & dairy products

A/C & heating eqpt

Paper napkins, towels, tissue

Auto parts & accessories

Other processed foods

Cards & stationery

Carpets & rugs

Finished motor vehicles

Book publishing

Plumbing parts

Alcoholic beverages

Hand tools & garden eqpt

ALL EXCEPT AUTOS AND PARTS

1

2

3

4

5

6

7

8

-7.34

-2.82

-2.53

-2.18

-1.98

-1.83

-1.36

-1.16

9.37

-9.06

-1.75

8.62

-3.15

-2.17

-10.12

-2.48

2.03

-11.87

-4.28

6.44

-5.13

-4.00

-11.48

-3.65

13

-0.98

1.31

4.21

-1.35

21.80

7.34

-2.33

10

11

12

0

0

1

.17

.47

.29

-0

2

-0

.75

.75

.05

-0

3

1

.58

.22

.23

23.11

14

15

16

17

1.45

3.53

3.97

4.20

-4 .86

1.71

10.17

-4.32

-3 .41

5.24

14. 14

-0.13

11.55

Household audio & video

Curtains, household cloth prods

Household appliances

Light fixtures

Photo eqpt & supplies

Household furniture

Drugs

Jewelry

Recreational goods

Apparel

Leather products

Computers & peripherals

18

19

20

21

22

23

24

25

26

27

28

29

4.21

4.84

5.58

6.51

6.90

7.51

8.20

9.49

10.25

11.24

12.45

16.12

57.80

9.15

10.72

10.33

12.29

8.79

-1.36

33.57

31.50

34.06

67.52

9.63

62.00

13.99

16.29

16.84

19.19

16.30

6.84

43.06

41.75

45.30

79 .97

25.75

101
industries, including auto parts were able to reduce import dependence (or increase net exports)

from 1992 to 1998. But most industries became more import-dependent, including four that

increased by more than 10 percent. For the 27 control group industries as a whole, import

dependence increased by 4.21 percent. Finished motor vehicles did somewhat better than the

median, with just a 1.31 percent increase; auto parts, substantially better, with a 0.98 percent

reduction.

These statistics suggest that the auto industry had less increase in import dependence during the

1990's than other consumer goods, possibly in response to the combination of measures that have

been applied over the years. Foreign-based auto manufacturers transplanted many parts and

assembly operations to the United States or Canada, more so than in other industries. Thus,

motor vehicles and parts were able to offset, at least to some extent, the economy-wide trend of

sourcing in Mexico or other countries with lower manufacturing costs. Of course, from these

statistics alone, it is impossible to tease out from the various other measures the specific

contribution, if any, of the AALA labels.

102
CHAPTER 5

SURVEY BACKGROUND AND METHODS

To determine the extent of knowledge and use of the labels by consumers, manufacturers, and

dealers, NHTSA commissioned the conduct of three surveys. All three surveys came under a

single study, known as "Surveys of Consumer Information on the Domestic Content of New

Cars and Light Trucks." It targeted these three groups for new passenger motor vehicles:

1) consumers, who recently bought or planned to buy a passenger motor vehicle;

2) manufacturers, including the Big 3 and foreign-based manufacturers; and 3) dealers, of Big 3

and foreign-based vehicles in the United States. Computer Assisted Telephone Interviewing

(C ATI) was used to conduct the consumer survey. Vehicle manufacturers and dealers were

surveyed by mail. The surveys were performed by Chilton Research, a NHTSA contractor, in

mid-1998.

This chapter describes the objectives of the consumer, manufacturer, and dealer surveys, the

characteristics of the respondent groups, the survey instruments, the methodologies, the pretests, and the data collection procedures.

5.1 Objectives of the data collection

Consumer survey: Determine the extent to which potential and actual purchasers of new

passenger cars, pickup trucks, vans, and sport utility vehicles think the national origin of the

vehicle and its parts are important vis a vis other factors in selecting a vehicle; are knowledgeable

about the origin of their own and other vehicles; know that the content label exists and have seen

or read it; correctly interpret the information on the label and find it easy to follow; and take this

information into account in their purchase decision making.

Manufacturer survey: Inquire about the effects of this regulation on manufacturers of these

vehicles in terms of cost, manufacturing changes, parts sourcing and sales.

Dealer survey: Determine the extent to which dealers of passenger cars, pickup trucks, vans, and

SUVs understand the content labels, and provide this new information to potential and actual

customers, and find it useful or detrimental in marketing.

5.2 Preparatory steps

Pursuant to 5 CFR 1320.8(d), NHTSA issued a notice soliciting public comments on the

proposed data collection in the Federal Register on Thursday, July 24, 1997 (62 FR 39886). A

copy of this notice appears in Appendix C. NHTSA received one public comment in response to

this notice, from the National Automobile Dealers Association (NAD A), requesting that the

surveys be made shorter and less time-consuming. In response, the surveys were extensively

streamlined.

103
This data collection effort was conducted in accordance with all relevant Federal regulations and

requirements, including the Privacy Act of 1974 (5 USC 552a), the Privacy Act Regulations (34

CFR Part 5b), the Freedom of Information Act (5 USC 522), and related regulations (41 CFR

Part 1-1, 45 CFR Part 5b, and 40 CFR 44502). Manufacturers who wished to submit information

under a claim of confidentiality did so in accordance with 49 CFR Part 512, NHTSA's regulation

concerning Confidential Business Information.

5.3 Consumer survey

Statistical methodology for stratification and sample selection: The consumer survey used a

national probability sample, with a county-based stratification scheme in which telephone

households are assigned to 20 sampling strata. It used a Random Digit Dialing (RDD) sample

frame that includes a current file of approximately 40,000 telephone exchanges, each of which is

coded for membership in a county, state, Metropolitan Statistical Area, and census region. For

every county in the U.S., the total number of households, African-American households,

Hispanic/Latino households, and median income has been recorded. The 20 sampling strata are

defined using a two-way cross-classification of regional and metropolitan characteristics.

The study used a three-stage sampling process: (a) Sample telephone exchanges, (b) Sample

households, (c) Select qualified respondents within households: people who had purchased/leased

new vehicle in past six months or were planning to purchase/lease a new vehicle in the next three

months.

In order to provide the ability to produce unbiased estimates at the regional and metropolitan/nonmetropolitan levels, the contractor employed a national sample of telephone households stratified

into 20 distinct and independent sampling strata. The 20 sampling strata are defined using a twoway cross-classification of regional and metropolitan characteristics. First, all states and counties

are assigned to one of the ten regional strata as defined by the United States Bureau of the

Census. Within the nine regions other than New England, counties are assigned to a metropolitan

stratum if they are part of a Metropolitan Statistical Area (MSA) currently recognized by the

Office of Management and Budget, and to a nonmetropolitan stratum, otherwise. In New

England, the definition employed is that adopted in 1975 by OMB, wherein New England County

Metropolitan Areas (NECMA's) were defined, replacing the MSA definition based on towns and

townships.

The sampling procedures used provide an unbiased representative sample of virtually all telephone

households including an unbiased sample of unlisted or unpublished residential numbers in their

correct proportions. The sample selection process, at all stages, was based on the strict

application of accepted sampling procedures and variance reduction methods.

It was expected that between 6 percent and 8 percent of households would have a qualified

respondent.

Estimation procedure: Data were weighted to population characteristics for all U.S. households.

These characteristics include number of adults living in the household, region, household income,

104
and characteristics of head of household. During the interviewing, this information was collected

from all respondents completing the interview, and approximately 10 percent of the respondents

who did not qualify for the survey. In this way, information was gathered about how closely the

total screened sample represents U.S. households. Data on U.S. household demographic

distributions throughout the nation were obtained from the Current Population Survey (CPS). All

data were weighted, including screens, by the household characteristics. To correct for any overor under-sampling by demographic groups a sample balancing technique called Raking Ratio

Estimation, or iterative proportional fitting, was used.

Raking Ratio Estimation helps control the weight variation and allows control on numerous

demographic groups without requiring a separate control count for each cell in the crossclassification of the demographic groups. Raking adjusts the sample counts to conform to one

marginal distribution, such as household income, and then adjusts again to another marginal

distribution, such as region. This continues for the marginal distributions for all characteristics

used in the weighting scheme. Each adjustment throws off the accuracy of the previous

adjustments so the procedure is repeated in an iterative fashion until there is close conformity for

all the marginal distributions.

This procedure resulted in every case (completed purchaser or planner interview) being assigned a

weight factor. All of the analyses in Chapter 6 are based on weighted data. However, most of the

case weights are close to 1, because the contractor's RDD procedure produces samples that are

already quite nationally representative and need only a slight adjustment. The "design effect" of

using the weighted data was only 1.04 - i.e., both the point estimates and the variances with

weighted data are for all practical purposes the same as they would have been with unweighted

data.

Degree of accuracy: The sampling procedures were designed to achieve samples of 385

purchasers and 385 planners, and these would allow a margin of error of ±5 percent at the 95

percent confidence level for purchasers and planners, separately. In other words, a yes/no

question (1 = yes, 0 = no) with a mean of .5 will have a sample standard deviation of .0255 for the

planners, and also for the purchasers (95 percent confidence level = 1.96 standard deviations).

The combined sample of planners and purchasers was originally anticipated to number 770, and

the margin of error for the combined sample was expected to be ±3.5 percent at the 95 percent

confidence level. The actual sample turned out to be somewhat smaller, 646 people, allowing a

±3.9 percent margin or error.

Questionnaire development and pretest: The consumer questionnaire was developed over a fourmonth period, beginning in June 1997, and pretested in October 1997. The survey instrument was

formatted for use with an online Computer Assisted Telephone Interviewing (CATI) system. Ten

interviews were completed as part of the pretest; six with purchasers and four with planners.

The average length of interview during the pretest was 10.5 minutes. None of the pretest

respondents were aware of AALA, and therefore the true length of the survey could not be

estimated because the series of questions about AALA was not administered. The survey was

105
reduced in length because it exceeded the 10-minute maximum proposed by NHTSA. The

modified survey was approved by the Office of Management and Budget (OMB) in August 1998.

Survey procedure: The consumer survey was conducted using Computer Assisted Telephone

Interviewing. The CATI system takes a question within a questionnaire and displays it on a

computer terminal. The interviewer, who is on-line via telephone with the designated respondent,

reads the question from the computer screen and enters the respondent's answer directly into the

computer. Skip pattern logic is programmed into the computer so the computer program controls

the sequence in which questions are asked and only questions that should be asked appear on the

screen. As an answer is entered by the interviewer, the program conducts on-line editing

operations including coding checks which reject ineligible codes entered by the interviewer for

precoded questions and validation checks of any entered data that falls outside of an acceptable

range.

The CATI system also includes computer programs that control the release of sample and perform

all manual controls and clerical tasks such as scheduling callbacks, adjusting for time zone

differences, executing the call rule and cycling and rotating calls through various time periods.

Consumer survey data was collected over a period of 5 XA weeks, starting in September 1998.

Interviewing for the study was conducted at the contractor's Indiana, Pennsylvania, and

Youngstown, Ohio facilities coordinated through the Pennsylvania headquarters. Interviewing

shifts ran on weekdays between the hours of 5:30 and midnight, allowing calls to be made until

9:00 p.m. local time on the West Coast, and on weekend afternoons and evenings. Households

were never contacted after 9:30 p.m. local time.

Households were screened to determine if any household member had bought or leased a new

motor vehicle in the last six months or planned to buy or lease on in the next three months. For

the purposes of the survey, "new" motor vehicle was defined as a Model Year 1998, 1999, or

2000 vehicle. Respondents were also instructed not to include the purchase of a used vehicle. If

either of these criteria were met, the interviewer asked to speak to the person in the household

most responsible for making the purchase or lease decision and conducted the interview with that

person. If the primary decision-maker was not available, the interviewer asked for his/her first

name and the best time to call back to reach him/her.

Interviewers attempted to complete the full interview at the time of screening. However, when

necessary, interviewers offered to call back at a more convenient time to accommodate

respondents' time constraints. When this occurred, interviewers recorded the date and time of the

appointment in CATI. That sample piece was the delivered to an interviewer's computer terminal

on the specified date and time for the call back.

One out often who were not eligible for participation in the study was asked a short series

of demographic questions (referred to as "short completes"). Data obtained from these interviews

were used to develop sample weights.

106
Sample control: Up to ten attempts, spread over ten separate interviewing sessions, were made to

reach a respondent. These attempts varied as to the day of the week and the time of the day.

After each call, interviewers recorded the disposition of the call in the CATI system. "Live"

numbers that still had the potential to produce a completed interview were prioritized for future

calls in the following order: 1) respondent requested a callback, 2) no answer, busy signal,

answering machine, and 3) unused sample.

Telephone numbers that were consistently busy, didn't answer, or answered by a machine were

called on weekday mornings and afternoons. If these numbers still remained busy or didn't

answer, CATI has a device to identify if they were non-working or non-residential and stop

further calls.

Refusal conversion: In order to minimize the loss of eligible respondents and to improve the

overall response rate, a follow-up "refusal conversion"was made on all initial refusals (with the

exception of those designated as so irate that further attempts would be fruitless).

For each initial eligible refusal, interviewers recorded in CATI the reasons for refusal (if known)

and the level of hostility the respondent had when refusing. This information was then used by

specially trained conversion interviewers when calling back a respondent to encourage him/her to

participate in the study. Respondents who were classified as "hard" refusals by the original

interviewer were not re-contacted by the refusal conversion interviewers.

Two weeks into the field period, refusal conversions efforts began. Eligible respondents who

refused on first contact were taken out of the general sample and routed to refusal conversion

interviewers. Fresh refusals were held for a minimum of three days before the conversion attempt

was made. The refusal conversion interviewer read the comments entered into the CATI by the

original interviewer to understand why the person refused before re-contacting the person.

Completed interviews: A total of 17,839 numbers were called, yielding 646 fully-completed

interviews with purchasers or planners:

Full interviews completed 646

Purchasers 425

Planners 221

Other successful contacts 6,558

"Short complete" - demographics only 651

Terminations - not a purchaser or planner 5,892

Over quota 15

Failed contacts 839

Refusals 813

Early terminations 26

107
Other calls that did not produce data 9,796

No answer, busy, answering machine 1,288

Left message, did not call back 1,175

Head of household not available 10

Non-working number, FAX, modem, etc. 4,766

Not a household, language problems, etc. 2,557

Total numbers called 17,839

Successful contacts were made with 7,204 households. Among the 6,543 who had not purchased

a vehicle recently or planned to buy one shortly, 5,892 interviews were terminated and 651 were

asked only demographic questions for sampling purposes ("short completes"). The ratio of full

interviews to successful contacts, 646/7,204 = 9 percent, is slightly higher than the 6-8 percent

anticipated in the sample design. Only 813 people still refused to participate after the various

refusal-conversion strategies and 26 terminated the interview early: a gratifyingly small number

relative to the 7,204 successful contacts. Not surprisingly, 9,796 calls produced no data because

they were left unanswered, were non-working numbers, FAX machines, etc.

Quality control: The contractor implemented quality control procedures for telephone

supervisors and monitors, including:

• Routine monitoring of interviews to ensure proper administration of the questionnaire.

When necessary, supervisors re-briefed interviewers on segments of the interview that

indicated weaknesses.

• "Listen-In" validation. Supervisors used visual and audio monitoring of interviews to

validate that responses were entered correctly into the CATI system by the interviewer.

Approximately 10 percent of every interviewer's work was validated.

• Supervisor reports - a standard form was used to keep a daily record of study progress

and document problems. The report included the number of completed interviews,

number of interviewing hours, completion rate, average length of interview, sample status,

results of monitoring sessions and any problems encountered.

In addition to conducting the initial training, the Project Director monitored telephone interviews

throughout the data collection to ensure the quality of the data collected. Additional briefings and

clarification of interviewing procedures were provided by the Project Director as needed.

Coding: When questions required content analysis, interviewers typed the respondent's answer

directly into the computer. Following each interview, the interviewer reviews the open-ended

responses, correcting any typographical errors. At the end of each interviewing day, the

interviews are retrieved by the Coding Department for code development.

Trained coders reviewed the verbatim responses from the first 190 completed interviews (30

percent of the completes required for this project). Individual codes were constructed for any

108
statement mentioned approximately 3 or more times. This list of preliminary codes was used to

code the first 450 interviews (70 percent of the completes required for this project). After 70

percent were coded, all mentions that did not fit into one of the existing codes were reviewed.

From these, individual codes were created for any statement that was mentioned 3 or more times.

These newly created codes were added to the original list, and these are the codes that were

applied to the remaining interviews. All mentions that did not fit into one of the existing codes

were given a "miscellaneous" or "other" code.

Data processing: After interviewing and data maintenance, data were passed through a cleaning

program to ensure that all data are correct. The cleaning program is a generalized software,

parameter-driven instrument that edits and checks the machine-readable records for data

inconsistencies. The cleaning parameters included the following kinds of questionnaire edits.

1.6 Edits for Missing Records. The program edits for missing records by checking the

sequential identification number for any missing numbers. After the entire file is passed,

the program prints the identification numbers that are missing from the file. The listing is

referred to as the validation list.

1.7 Edits for Proper Skip Patterns. Each field was edited for the presence or absence of data.

For example, if the data fields for questions two, three and four are contingent on having a

"yes" response to question one, then the fields of questions 2-4 must have data present if

question one is "yes." Conversely, the fields of questions 2-4 must have a missing data

code if question one is other than a "yes." If the above condition is not met, the program

lists the identification number, field of error, and error type on the validation list.

18 Edits for Eligible Codes. The program edits each data field for eligible codes. If an

ineligible code appears, the program lists the identification number, field and ineligible

code on the validation list.

1.9 Edits for Number Quantities. Numeric limits may be predetermined to check on the

ranges of quantity type answers. This edit is extremely helpful in sorting out responses

that seem suspicious. Responses which fall outside of these limits are printed on the

validation list.

If the validation listings indicated that there were missing records, ineligible codes, improper skip

patterns, or value ranges which have been exceeded, the questionnaire bearing these errors was

retrieved for a review of discrepancies. When needed, an interviewer made callbacks to retrieve

any missing information or clear up any discrepancies.

Survey instrument: The instrument contained five introductory questions, 33 purchasing-related

questions, and 17 demographic questions. The survey took approximately 10 minutes to

administer. The survey was constructed with skip pattern logic programmed into the computer

which controls the sequence in which the questions are asked. The complete survey instrument

may be found in Appendix D. Here is an overview of the questions for recent planners and

purchasers:

109
Introductory questions: Did you purchase or lease a new vehicle in the past six months? Are you

planning to purchase or lease one in the next three months? May I speak with the household

resident responsible for making the purchase decision?

Values: Here is a list of factors people consider in selecting a new vehicle - which of them do you

consider important? How important (rate them)? Which is most important? Is it important to

know the country of origin of a vehicle's parts; what percentage was made in various countries;

where the vehicle was assembled? How often do you make a point to "Buy American" for

vehicles or other items?

Knowledge of vehicle origin: What make-model(s) did you buy or are you planning to buy? In

what country was your new vehicle(s) assembled? I will now name seven popular make-models:

in what countries are they assembled?

Knowledge of the existence of the AALA label: How would you find out in what country a

vehicle was assembled? Have you heard of the law requiring manufacturers to place label

showing country of origin for vehicles and parts? Have you heard of the parts content label?

Have you seen it? Have you read it?

Understanding of the AALA label (for people who have seen or read it): What do the numbers on

the parts content label mean? Do you understand it includes parts made in U.S. or Canada, but

not Mexico or other countries? Do you understand it does not include assembly labor? Does the

label list transplants as "assembled in US/Canada" or elsewhere? Is the information on the label

easy to understand?

Influence of label: Did the information on the label influence your purchase decision? If so, how?

Did a salesperson point out or explain the parts content label? Did salesperson make the label an

important part of the sales presentation? Now that we've talked about the label, do you think it

would influence your future purchase decisions?

Demographic questions: Age, gender, education, race/ethnicity, occupation of head of

household/respondent; household size and income [geographical region and urban/rural are

known from the telephone area code and exchange]

5.4 Manufacturer survey

NHTSA surveyed by mail all 21 Big 3 and foreign-based manufacturers that sell passenger

vehicles in the United States. The Association of International Automobile Manufacturers

(AIAM) assisted by providing a list of the names and key contacts for all foreign-based

manufacturers. All 21 manufacturers mailed in a questionnaire. Since NHTSA conducted a

census of the entire manufacturing population, there is no issue of error estimation.

Questionnaire development, pretest and data collection: The manufacturer questionnaire was

developed over a four-month period, beginning in June 1997. The contractor worked with

NHTSA to identify the survey topics and select questions for the draft survey instrument. Draft

110
questionnaires were reviewed by the American Automobile Manufacturers Association (AAMA),

American International Automobile Manufacturers (AIAM) and John McElroy, Editor in Chief of

Automotive Industries magazine and modified in response to their comments.

The survey was pretested by one Big 3 and one foreign-based manufacturer in October-November

1997. Based on the pretest, the survey was modified slightly and then submitted to and approved

by OMB. Since the final questionnaire was quite similar to the pretest, the two pretest completes

were used for the actual study so those two manufacturers would not have to complete another

questionnaire.

The survey instrument was printed on DOT letterhead and mailed to the remaining 19

manufacturers in August 1998, addressed to each manufacturer's government liaison. All of them

mailed in their questionnaire. Four manufacturers did not answer the questions about the cost of

complying with the AALA.

The questionnaires were encoded by keypunch and 100 percent verified. The data processing

included quality control procedures similar to those in the consumer survey.

Survey instrument: The complete survey instrument may be found in Appendix E. Here is an

overview of the questions:

Introductory questions: Job title(s) of person(s) filling out the questionnaire

Market analysis. How important do you rate US/Canadian parts content as a factor in selling

vehicles in the United States? What percentage of customers are probably aware of the existence

of the parts content label?

Guidance to dealers: What guidelines or materials do you provide dealers for training staff to

explain information on parts content label? Do you encourage or require dealers to make

customers aware of parts content label? Do you provide dealers with any guidance or

recommendations for using parts content information label as a selling point? Have you

developed a consumer guide to US/Canadian parts content for dealers to give customers?

Marketing: Do you provide customers with information about US/Canadian parts content in

addition to the label? How do you show this information (in-store displays, brochures, newspaper

ads, magazine ads, television ads, radio ads, 800 number, etc.)? Is "Built-in -America" used in

advertising strategies?

Comments on the labels: Are parts content information labels understandable to the customer?

What feedback have customers, dealers, or suppliers given about the labels? Any suggestions for

making the parts content information label clearer, more understandable, or more useful to

consumers?

Changes in U.S./Canadian parts content or assembly: Did you significantly shift parts content or

assembly during 1990-98? Were any of these shifts in content or assembly motivated by AALA?

I l l
What factors motivated you to shift product lines or component parts from imported to domestic

production or vice versa? How much of a factor is the currency exchange rate relationship? By

the AALA definitions, what is your estimate of the US/Canadian parts content of your Model

Year 1994 vehicles?

Fleet purchasers: Have any fleet vehicle purchasers expressed an interest in the parts content

information labels? Have any fleet vehicle purchasers indicated a preference for vehicles with high

US/Canadian parts content?

Cost of AALA: Please estimate and explain costs to date for implementing the AALA. What

were the start-up cost and number of hours? What are the annual recurring costs and hours?

What is your estimate of the overall cost of this program to suppliers? How will your costs

change following the end of the two-year provision allowing flexibility in estimates of content

determinations where outside suppliers have not responded to requests for content information?

AALA and other record-keeping requirements (NAFTA, CAFE): How do the costs of AALA

compare to the costs of gathering and reporting information on compliance with NAFTA and

CAFE? Do your suppliers use a single form for reporting information required for the NAFTA,

CAFE, and the AALA?

Information obtained from suppliers: Do all of your purchase orders to suppliers include a

requirement to furnish US/Canadian parts content information? What percent of suppliers furnish

US/Canadian parts content information?

5.5 Dealer survey

Sample design: A list comprising 90 percent of the new car dealers in the United States was

acquired. A simple random sample of 500 dealers was selected and mailed questionnaires. It was

expected that 200 would return them (40 percent completion rate). In fact, 195 questionnaires

were returned by the end of the study.

Estimation procedure: Since the dealer survey was conducted primarily for anecdotal

information, with nationally representative statistics only a secondary consideration, the data were

treated as a simple random sample and no weighting or stratification was applied.

Degree of accuracy: For the actual sample of 195 dealers, the degree of accuracy is ±7.0 percent

at the 95 percent confidence level. A yes/no question with a mean of .5 will have a sample

standard deviation of .0358.

Questionnaire development and pretest: The dealer questionnaire was developed over a fourmonth period, beginning in June 1997. The draft survey instrument was reviewed by the National

Dealers Association (NADA) and the American International Automobile Dealers Association

(AIADA). Revisions were made based on their suggestions, greatly reducing the length of the

questionnaire. A pretest was conducted from October to November 1997. The survey was

mailed to a simple random sample of 50 dealers; 14 completed the survey. This was a satisfactory

112
response rate considering there were no follow-up measures such as post-card reminders and remails for non-respondents. After the pretest, some parts of the survey were simplified. It was

submitted to OMB and approved.

Data collection: Dealers were mailed a packet containing a questionnaire, a personalized cover

letter on NHTSA stationery, and a postage-paid reply envelope. Data collection took place over

a 14-week period, beginning with the first mailing to all 500 dealers in late August 1998. One

week later, postcards reminding respondents to complete the survey and thanking those who

already did, were mailed out to all 500 dealers. These mailings netted 107 completed surveys. In

addition, five companies stated they were not new-vehicle dealers and a 13 packets were returned

by the Post Office as "undeliverable." In mid-September, a second survey packet was mailed to

the non-responders. By mid-October, 181 completed surveys were in hand. Telephone calls to

non-respondents over a four-week period netted 14 more completions. By the close of data

collection (December 11, 1998), a total of 195 completed questionnaires had been received.

Coding and data processing: The questionnaires were encoded by keypunch and 100 percent

verified. The strategy for converting verbatim responses to numerical codes was similar to the

one used in the consumer survey. The data processing included quality control procedures similar

to those in the consumer and manufacturer surveys.

Survey instrument: The complete survey instrument may be found in Appendix F. Here is an

overview of the questions:

Introductory questions: Job title(s) of person(s) filling out the questionnaire; nameplates sold,

annual sales volume; size of new-vehicle sales staff

Dealer/staff knowledge of AALA: How aware are you of the AALA and the US/Canadian parts

content information label? Is your sales staff aware of the parts content information labels? Do

they understand the information on the labels? Can they effectively explain the labels to

customers? What training are they given to explain the information on the label?

Consumer knowledge of AALA: Are customers aware of the existence of parts content

information labels? Do they read the labels? Do they ask questions about them? Do they

understand them? Which aspect of the label do you think customers are most interested in? Have

customers expressed concern because the label combines US and Canadian content into a single

percentage?

Consumer attitudes: Do customers consider US/Canadian parts content an important factor for

selecting a vehicle? Do they consider the information on the label when making a purchase

decision? Do they show a preference for "Buying American"/buying foreign? Are they more

interested in the price of an automobile than the information on the label? Has a customer ever

decided or declined to purchase a vehicle as a result of the kind of information provided on the

label? How often?

113
Guidance received from manufacturers: Did manufacturers give you any guidelines or materials

for training sales staff to explain the information on the parts content label? For using the parts

content information label as a selling point?

Presentation of parts content information to customers: Under what circumstances are sales staff

told to point out/explain the labels to customers? Do they make the labels an important part of

sales presentations to customers? Does your franchise show parts content information through instore displays, brochures, newspaper ads, television ads, or radio ads? How often sales staff

inform customers about the final assembly point of the vehicle, the country of origin of engine or

transmission parts, the percentage of US/Canadian parts that comprise the vehicle, or the major

sources of non-US/Canadian parts? Are sales staff more likely to use the label in sales

presentations if vehicle was assembled in the United States or outside the United States?

Suggestions: Do you have any suggestions for making the labels clearer, more understandable, or

more useful to consumers?

114
CHAPTER 6

CONSUMER SURVEY

The objectives of the consumer information collection are to determine the extent to which

potential and actual purchasers of new passenger cars, pickup trucks, vans, and sport utility

vehicles (SUV) think the country of assembly of the vehicle and its U.S./Canadian parts content

are important vis a vis other factors in selecting a vehicle; are knowledgeable about the origin of

their own and other vehicles; know that the American Automobile Labeling Act (AALA) and the

content label exist and have seen or read the label; correctly interpret the information on the label

and find it easy to follow; and take this information into account in their purchase decision

making.

Consumer survey data collection was collected over a period of 5 V2 weeks, beginning in

September 1998. As explained in Section 5.3, a total of 1,297 interviews were conducted for the

study; 425 interviews were conducted with purchasers of new vehicles, 221 interviews with

potential purchasers (planners) and 651 interviews collecting only demographic information were

conducted in households that had not purchased and did not intend to purchase a new vehicle. A

total of 7,240 households were screened to obtain the sample of 646 purchasers and planners.

Section 5.3 describes a procedure for weighting the cases to make sample statistics nationally

representative. All statistics in this chapter, except where specified, are based on weighted cases.

Appendix D presents the entire survey instrument and Section 5.3 summarizes it.

A principal finding of the survey is a disconnect between consumers' values and their knowledge

and use of the AALA labels. Although many consumers think the country of assembly of vehicles

and their U.S./Canadian parts content are relatively unimportant, there is a large subgroup that

considers them critically important and strives to "buy American" all of the time. Yet, the vast

majority of this subgroup, as well as other consumers don't know the labels exist and, as a result,

could not have been influenced by them. Many purchasers of transplants were not aware that

their vehicle was assembled in the U.S. or Canada, and don't necessarily think of them as

"American" vehicles. Ironically, the group most likely to read the label is purchasers of vehicles

assembled overseas and imported into the United States, the group that cares least about

U.S./Canadian content or assembly, as we shall see in Table 6-1.

6.1 Purchasers, planners and subgroups

Purchasers: the 425 interviewees who had purchased a new car, pickup truck, van, or SUV of

model year 1998-2000 during the last six months before the interview. (Long-term leases are

included among the "purchases.") Up to three new vehicle make-models were recorded: 367 of

these people had bought one new vehicle within the time frame, 37 had bought two vehicles, and

21 had bought three. Seventy-three percent of the vehicles were Big 3 and 27 percent were

foreign-based nameplates (close to the distribution of new vehicle sales for the entire United

States - see Section 2.3).

115
In the study, we compared the purchasing values, knowledge and understanding of the label and

the AALA, buying preferences, and influence of the label for Big 3 purchasers, transplant

purchasers, and import purchasers. These subgroups are defined for the people who had bought

exactly one new vehicle, and who specified its make-model during the interview:

Big 3 purchasers: 261 people had purchased exactly one vehicle, and it had a Big 3

nameplate (General Motors, Ford, or Chrysler). This subgroup includes make-models

defined in Section 2.4 as "true domestic vehicles" such as Buick LeSabre, "international

design cars built in Big 3 factories and sold with Big 3 nameplates" such as Ford Escort,

and "transplants sold with Big 3 nameplates" such as Chrysler Sebring. Our sample did

not include a single purchaser of a "captive import" (assembled overseas for the Big 3),

such as Cadillac Catera. Thus, all 261 Big 3 vehicles were assembled in the United States,

Canada or Mexico.

Transplant purchasers: 61 people bought one make-model that is exclusively or primarily

assembled in the United States or Canada and sold under a foreign-based nameplate. In

the language of Section 2.4, that includes "true transplants" such as Toyota Camry or

Honda Accord, and a few "Big 3 designed and built vehicles sold with foreign-based

nameplates" such as Isuzu Hombre.

Import purchasers: 32 people bought a make-model carrying a foreign-based nameplate,

designed and assembled overseas - a "true import" in the nomenclature of Section 2.4,

such as Lexus LS-400 or Hyundai Accent.

People who bought two or more vehicles during the past six months, or who didn't report the

make-model, or who bought a vehicle that does not fit neatly in the preceding categories (such as

Volkswagen Jetta) are not included in the three subgroups.

Planners: the 221 interviewees who said they intended to purchase or lease a new vehicle of

model years 1998-2000 within the next three months after the interview.

The staunch "Buy-American" subgroup: We identified a subgroup of purchasers and planners

that especially stresses buying vehicles with U.S./Canadian content and assembly and, more

generally, strives to "Buy American" in all products. Responses to four of the survey questions

were used to identify them: they said they "always" try to buy American when they go shopping,

they said "built in the U.S. or Canada" is an important factor in selecting a vehicle, and moreover,

they gave it the highest importance rating (a 7) and/or said it was the single most important factor

for them. This subgroup contains 110 of the 646 interviewees in our sample, more than one-sixth.

Given new-vehicle sales of 15 million per year in the United States, our sample suggests that this

staunch "Buy-American" subgroup apparently purchases 2.5 million new vehicles annually.

Moreover, in our sample, this subgroup's actions squared with their values. Among those who

purchased one vehicle and reported its make-model, 100 percent bought vehicles assembled in

North America: 96 percent were Big 3 vehicles assembled in the United States, Canada or Mexico

and 4 percent were transplants assembled in the United States.

116
TABLE 6-1: FACTORS PEOPLE CONSIDER IMPORTANT WHEN BUYING OR LEASING A NEW VEHICLE

(Average numerical score: 0 = not important at all; 100 = very important)

Factor

Reliability

How the vehicle drives

Safety

Price

Manufacturer reputation

Style or look

Vehicle size

Dealer reputation

Fuel economy

Optional equipment

Cargo capacity

Made in the USA/Canada

Brand image

Brand I always buy

That it is a foreign vehicle

All Purchasers

and Planners

93

89

85

76

76

70

70

61

60

55

54

43

35

34

17

Big 3

Purchasers

93

90

84

72

76

72

76

65

57

58

59

57

37

35

12

Transplant

Purchasers

96

91

86

84

81

76

64

58

75

47

42

26

39

34

23

Import

Purchasers

90

94

85

70

67

86

57

49

47

59

43

11

34

27

18

Staunch

"Buy-American "

Piirrh. & Plan.

97

94

91

68

90

76

78

73

71

67

70

100

46

57

21
6.2 Values: importance of vehicle content/"buying American"

Since a goal of the AALA labels is to inform consumers about where a vehicle was assembled and

what countries produced its parts, a natural first question is whether consumers have any interest

in such information, and to what extent they care about where a vehicle was built.

Purchasers and planners were read a list of 15 factors or attributes that people might consider

important when buying or leasing a new vehicle. Two of the factors on the list were "that it is

made in the U.S. or Canada" and "that it is a foreign vehicle." The other 13 are attributes likely

to be important to a wide segment of vehicle buyers, such as reliability, safety, price, etc. This is

not meant to be an exhaustive list. For example, it does not include factors that might be critical

to some people, although not necessarily to the average buyer, such as a vehicle's horsepower,

color, or sound system; its warranty; or the dealer financing and customer service.

Initially, respondents were asked to say what factors they considered "important" and which ones

were "unimportant" in their own selection process. If they said a factor was "important" they

were then asked to rate "how important" using a subjective scale from 1 to 7 where "1 " means it

is not at all a factor and "7" means it is a very important factor to them when they bought or will

buy their next vehicle. The two responses for each factor were combined into a single numerical

score ranging from 0 to 100, as follows: if the factor was "unimportant" their score was 0; if the

factor was "important" and the rating a 7, the score was 100, and if the factor was "important"

and the score was 1, 2, 3, 4, 5 or 6, the rating was 14, 29, 43, 57, 71, or 86, respectively. These

scores can be averaged, on each factor, for any group of survey participants. (On each factor, the

small number of respondents who did not answer whether it was important or unimportant, or

who did not give a scale number if they said it was important, are not included in the computation

of averages.)

Average scores were computed and compared for the full sample of all purchasers and planners;

Big 3 purchasers, transplant purchasers, import purchasers, and the staunch "Buy-American"

subgroup of purchasers and planners. Table 6-1 presents all the ratings, listing the factors in

descending order of importance in the full sample. Purchasers and planners, on the whole

consider reliability (average score 93), performance ("how it drives" - 89) and safety (85) to be

the most important attributes for selecting a new vehicle. Next, scoring in the 70's, were price,

manufacturer reputation, the style or look of the vehicle and its size. Factors such as dealer

reputation, fuel economy, optional equipment, and cargo capacity were important to some but not

necessarily to others, and had lower average ratings, from 61 to 54. By comparison to these

widely valued factors, "that it is made in the USA or Canada," rated at 43, is not too important

for the average planner or purchaser. Only "brand image" and "it's the brand I always buy" rated

lower (35, 34). "That it is a foreign vehicle" scored the lowest by far, 17.

The full sample includes buyers of imports from overseas, who presumably consider "made in the

U.S. or Canada" of little or no importance. But the subgroup of Big 3 purchasers, over 70

percent of the new-vehicle market, attached substantially more value than other buyers to a

vehicle being made in the U.S. or Canada, averaging a score of 57. That's about as important as

the vehicle's optional equipment (58), fuel economy (57), cargo capacity (59) and the dealer's

reputation (65): a solid member of the "second tier" of selection factors. The "first tier" includes

117
reliability, drive quality, safety, manufacturer reputation, price, styling and size, ranging from 72

to 93. Vehicle size is another factor that Big 3 purchasers considered more important than other

consumers. Big 3 buyers indicated adamantly that they are not interested in "foreign" vehicles,

and rated this attribute a 12.

Transplant buyers gave "made in the U.S./Canada" and "that it is a foreign vehicle" nearly

identical, although rather low scores: 26 and 23. This interesting result could reflect several

characteristics of transplant purchasers. Many of them, as will be shown in Section 6.3, are

unaware their vehicle was assembled in North America and actually think they acquired an

overseas-built vehicle. Others, who are aware of its North American assembly may still consider

it a "foreign" vehicle in terms of its design, engine, transmission, etc. - and they like it. Thus,

efforts by transplant manufacturers to increase public awareness of their North American

assembly and parts content could be helpful in some markets, but not necessarily in all. Other

attributes that transplant purchasers consider more important than the average consumer are

price, fuel economy (a surprising 75) and, to a lesser extent, reliability (a very high 96, but this is

high for all subgroups) and manufacturer reputation. This is a practicality-seeking group.

Import buyers rate "made in the U.S./Canada" a very low 11, well below the 26 rating it gets

from transplant buyers and the 57 from Big 3 buyers. As we shall see in Section 6.3, most of

them know they are buying an imported vehicle - and they don't care. But they rate "that it is a

foreign vehicle" only at a low 18. In other words, few of them appear to buy imports specifically

because they are imported. Two attributes this group really cares about are "how the vehicle

drives" (94) and its "style or look" (86). Of course, safety and reliability are also crucial, as in

other groups.

By definition, the staunch "Buy-American" subgroup rated "made in the US/Canada" at 100,

since these were people who gave it a maximum 7 on the subjective scale. Table 6-1 suggests

that this large group of consumers rates that attribute on a par with reliability, performance, safety

and manufacturer reputation as a criterion for selecting (or not selecting) a new vehicle. They are

also the only subgroup to give a high rating to "it's the brand I always buy" (57).

Interviewees were asked how often they make it a point to "buy American" when they shop for

products in general, not necessarily motor vehicles or automotive equipment. Table 6-2 shows

attitudes that closely parallel consumers' views on vehicle purchasing. Among all 646 purchasers

and planners, 32 percent always strive to "buy American" and 50 percent sometimes. Among Big

3 purchasers, that rises to 40 percent who always try to "buy American." For transplant

purchasers, it is only 15 percent, and for import buyers, just 6 percent. In other words, there are

clear differences in the attitudes of Big 3, transplant and import buyers, but the transplant buyers'

attitudes are somewhat closer to import buyers' than to the Big 3. Again, by definition, our

staunch "Buy-American" group is limited to people who say they always try to "buy American."

119
TABLE 6-2

HOW OFTEN DO YOU MAKE IT A POINT TO "BUY AMERICAN"?

(In percent)

Buying

Preference

Always

"Buy

American"

Sometimes

Rarely or

never

AH

Purchasers

and

Planners

32

50

18

Big 3

Purchasers

40

47

14

Transplant

Purchasers

15

60

25

Import

Purchasers

6

61

33

Staunch "BuyAmerican"

Planners and

Purchasers

100

0

0

6.3 Knowledge of where vehicles are assembled

Since the AALA labels tell consumers in what country vehicles are assembled, it is appropriate to

investigate the current (1998) level of consumer knowledge on that subject. We shall see if

consumers know where their own vehicle was assembled, and if they can identify the country of

assembly for a list of other make-models. The survey also asked consumers if they knew where to

obtain such information.

The first analysis - knowledge of where one's own vehicle was assembled - is based on the 261

Big 3 purchasers, the 61 transplant purchasers and the 32 import purchasers who had bought

exactly one vehicle and named its make-model. The survey did not get Vehicle Identification

Numbers that would have allowed exact identification of the country of assembly. Nevertheless,

the make-model alone is usually enough to identify a unique country of assembly (based on sales

and production data of the sort analyzed in Chapter 2), and even in the cases where two countries

were possible, those two were almost always "U.S. or Canada" or "U.S. or Mexico." The survey

then asked the purchaser in what country his or her vehicle was assembled. Thus, it becomes

possible to compare the actual assembly nation(s) to the country where the purchaser thinks it

was assembled. Table 6-3 presents this information in four sections.

The upper section of Table 6-3 is limited to Big 3 make-models that we know, based on sales and

production data, were assembled in either the United States or Canada. Nearly all (94 percent) of

their purchasers correctly stated that their car or truck was made in the U.S./Canada; 5 percent

didn't know, and only 1 percent believed they had bought an overseas-assembled vehicle.

120
TABLE 6-3

PURCHASERS' ANSWERS TO: "WHERE WAS YOUR OWN VEHICLE ASSEMBLED?"

(In percent)

Big 3 Models Actually Assembled in the U.S. or Canada

Purchasers said: Percent

U.S./Canada 94 *

Overseas 1

Don't know 5

Big 3 Models Actually Assembled in the U.S. or Mexico

U.S./Canada 88 *

Mexico 8 *

Don't know/other 4

Transplants (Foreign-Based Models Actually Assembled in the U.S. or Canada)

U.S./Canada 54 *

Overseas 26

Don't know/other 20

Imports (Foreign-Based Models Actually Assembled Overseas)

Overseas, identifying correct country 64 *

Overseas, but identified wrong country 17

U.S./Canada 11

Don't know/other 8

* Correct answers

121
The second section of Table 6-3 addresses Big 3 make-models that are actually assembled in both

the U.S. and Mexico. Typically (e.g., Ford Escort), more of the U.S. sales are assembled in the

U.S. than in Mexico. Here, too, nearly all purchasers (96 percent) correctly believed their vehicle

had been assembled in North America. Moreover, with 88 percent saying U.S./Canada and 8

percent saying Mexico, we can see that a fair proportion of purchasers are aware of the Big 3's

Mexican assembly operations.

Thus, nearly all Big 3 purchasers either know for a fact that their vehicles were assembled in

North America or they assume and take for granted that this is so. (Our survey sample did not

include any "captive imports" such as Cadillac Catera, so we couldn't investigate where

consumers think those are assembled.)

The third section of Table 6-3 indicates transplant purchasers have much lower, but still

substantial knowledge about their vehicle's country of assembly. Just over half (54 percent)

correctly stated that their car or truck was assembled in the U.S./Canada; 26 percent believed it

was assembled overseas (usually in Japan); and 20 percent didn't know. Here is a cup half full

and half empty at the same time: is it more surprising that the majority of transplant purchasers

know that their own vehicle is assembled in North America, or that so many purchasers think they

are built overseas and presumably view them as thoroughly "foreign" vehicles?

The last section of Table 6-3 shows that 81 percent of the purchasers of "true imports"

(assembled overseas and sold by foreign-based companies) correctly stated their vehicle was

assembled overseas; only 11 percent thought they were assembled in North America, and only 8

percent didn't know. (However, 17 percent identified the wrong overseas country.) These

statistics differ from transplant purchasers in two ways: (1) a much higher percent of import

purchasers know or think their vehicle is built overseas; (2) a higher percent of import purchasers

answered the question correctly, or at least got the hemisphere right. Thus, when it comes to

perceptions of their own vehicles, there is a clear distinction between transplant and import

purchasers: only 26 percent of transplant purchasers believed they bought an import, and only 11

percent of import purchasers believed they bought a transplant.

Table 6-4 repeats the statistics of Table 6-3 but limited to purchasers in the staunch "BuyAmerican" subgroup, specifically the 61 individuals belonging to that subgroup who were

purchasers (not planners), bought exactly one vehicle, and identified its make-model. As stated in

Section 6.1, all of them bought Big 3 or transplant models that were actually assembled in North

America. Table 6-4 shows their perceptions mesh with reality: 60 of the 61 correctly stated their

vehicle was assembled in North America, and ldidn't know. Specifically, among the 50 people

who bought Big 3 vehicles assembled in the U.S. or Canada, 49 (98 percent) correctly identified

the U.S./Canadian assembly, and 1 didn't know. Nine people bought Big 3 make-models

assembled in the U.S. or Mexico: 8 (89 percent) thought their vehicle was assembled in the U.S.

and 1 (11 percent) thought it was built in Mexico. Presumably, this last individual considers a Big

3 vehicle assembled in Mexico consistent with his or her "Buy-American" values and/or learned of

the Mexican assembly only subsequent to the purchase. The two (100 percent) staunch "BuyAmerican" buyers who purchased transplants did so in the correct belief that they were assembled

in the United States or Canada.

122
TABLE 6-4

STAUNCH "BUY-AMERICAN" PURCHASERS'

ANSWERS TO: "WHERE WAS YOUR OWN VEHICLE ASSEMBLED?"

(In percent)

Big 3 Models Actually Assembled in the U.S. or Canada

Purchasers said: Percent

U.S./Canada 98 *

Don't know 2

Big 3 Models Actually Assembled in the U.S. or Mexico

U.S./Canada 89 *

Mexico 11 *

Transplants (Foreign-Based Models Actually Assembled in the U.S. or Canada)

U.S./Canada 100 *

Imports (Foreign-Based Models Actually Assembled Overseas)

The staunch "Buy-American" group did not buy any vehicles

assembled overseas

* Correct answers

123
As might be expected, consumers' knowledge of the assembly country is considerably weaker for

make-models other than their own vehicle. All 646 purchasers and planners in our survey were

read a list of various make-models of cars and trucks - Toyota Canny, Acura Integra, Jaguar,

Volkswagen Jetta, BMW Z3, Chevrolet Blazer, and Ford Explorer - and were asked if they could

name the countries in which they were assembled. Table 6-5 summarizes the responses for all

purchasers and planners, and for the staunch "Buy-American" subgroup.

The first two sections of Table 6-5 compare consumer awareness of the Toyota Camry, one of the

top-selling transplants, and Acura Integra, a high-volume import. Most consumers didn't know

the difference. In fact, a higher percentage thought the Camry was assembled in Japan (59) than

the Integra (46). Nearly the same proportion of consumers thought the Camry and the Integra

were assembled in North America. In other words, even though Table 6-3 shows that many

transplant purchasers learn at some point that their own vehicle is a transplant, the average

consumer probably will not distinguish the transplants from the imports - in a list of popular

foreign-based make-models - or on the showroom floor. In the staunch "Buy-American"

subgroup, 63 percent thought the Camry was assembled in Japan and only 23 percent thought it

was assembled in the U.S. or Canada. In other words, the group that cares most about where

vehicles are built may be even less aware of transplants than the average consumer.

The next section of Table 6-5 concerns a European-built luxury car, Jaguar (now owned by Ford

but still sold under its own nameplate). Many people realize it is imported from overseas and only

a few think it is assembled in North America. Just over a third of the sample could identify the

correct country of assembly, England.

The next two cars in Table 6-5 are produced by German-based companies and are now assembled

in North America. Volkswagen Jetta (Mexico) and BMW Z3 (United States). Here, only 5 to 13

percent can identify the country of assembly, and the majority of consumers think they are built in

Germany.

The last two make-models in Table 6-5, Chevrolet Blazer and Ford Explorer, are popular Big 3

SUVs. Unlike the other make-models, the overwhelming majority of interviewees, 90 percent or

more, correctly stated that they are assembled in the United States. It would appear that a large

proportion of consumers automatically associate "Chevrolet," "Ford" and other Big 3 nameplates

with North American assembly.

Sources of country-of-oriein information: The survey asked purchasers and planners how would

they find out if a vehicle was assembled in the U.S./Canada or elsewhere. The interviewer did not

read off a list of possibilities, but rather allowed the respondent to volunteer up to three sources

on their own. Of course, an excellent method, at least in the showroom, would be to "look at the

AALA label." However, only 13 percent of respondents said that they would look at the AALA

label. That proportion is quite consistent with the data in the next section: Table 6-6 indicates

that only 15 percent of new-vehicle buyers have ever seen an AALA label - i.e., most of those

who have seen it know it specifies the country of assembly. But the percentage who know they

can get the information from the label is well below the proportion of consumers who care, at

least to some extent, about where the vehicle was assembled.

124
TABLE 6-5: CONSUMERS' ANSWERS TO

"WHERE WERE THE FOLLOWING VEHICLES ASSEMBLED?"

(In percent)

Toyota Camry

U.S.VCanada

Japan

Don't know/other

Acura Integra

Japan*

U.S. /Canada

Don't know/other

Jaguar

England*

U.S./Canada

Don't know/other

Volkswagen Jetta

Mexico*

Germany

U.S./Canada

Don't know/other

BMWZ3

U.S.*/Canada

Germany

Don't know/other

Chevrolet Blazer

U.S.*/Canada

Don't know/other

Ford Explorer

U.S.VCanada

Don't know/other

All Purchasers

and Planners

33

59

8

46

29

25

38

12

50

5

65

16

14

13

55

32

93

7

93

7

Staunch "Buy-American"

Purchasers & Planners

23

63

14

43

23

34

31

8

61

6

66

12

16

12

53

35

90

10

90

10

* Correct answers

125
The largest number of people, 20 percent, said that they would ask the dealer where the vehicle

was assembled. Thirteen percent said that they would find out where the vehicle was made by

discussing this with other people. A surprising number of people, 11 percent, said that they

would use the Internet, and 7 percent would look at magazines. Interestingly, nobody explicitly

volunteered the method that seems to be most common in actual practice: buying a Big 3 vehicle

and assuming that it's assembled in North America.

6.4 Awareness of the AALA law and label

The next part of the survey examined purchasers' and planners' awareness and knowledge about

the parts content label, and the influence of the label on their purchase decision-making. First, the

survey asked if they had heard or read about a law that requires car and truck dealers and

manufacturers to place a label on all new vehicles showing in what country the vehicle and its

parts were made. An overwhelming 78 percent of all purchasers and planners said no, and only

21 percent said that they had heard or read about the law.

Next, the survey asked respondents whether they were aware of the existence of the AALA label:

had they heard of it or read about it somewhere? Have they ever seen one of the labels? Did they

read one in a dealership? Table 6-6 summarizes the findings for all respondents, and for the

various subgroups. Only 23 percent of purchasers and planners know of the existence of the

label, 15 percent have seen one, and 7 percent have read one. (In other words, 23 percent of the

[weighted] 646 survey participants knew of the existence of the label; 15 percent of the 646, and

they are a subset of the first group, not only knew the label existed but had actually seen a label

somewhere; and 7 percent of the 646, and they are a subset of the second [and the first] group,

had seen and read the label while at the dealership. These percentages are not additive!) Yet,

these are all people who recently bought or imminently would buy a new vehicle, people who

likely visited showrooms and saw new vehicles with all their labels and stickers, or already have

the vehicle in their garages, or at least are studying about new vehicles. Clearly, planners and

purchasers, let alone the general public, were not well informed about the AALA label in 1998.

Nevertheless, the labels are hardly going completely unnoticed: given 15 million new vehicle sales

per year, over 2 million customers per year see the labels (15 percent) and over 1 million read

them (7 percent).

It might be thought that purchasers are more aware of the labels than planners, since purchasers

have already been through the showrooms to see new vehicles, while planners may just be starting

the process. Table 6-6, however, shows minimal difference: 23 percent of purchasers and 22

percent of planners have heard of the label; 16 vs. 13 percent have seen it (not a statistically

significant difference, given N = 425 purchasers and 221 planners); and an identical 7 percent

have read it.

Interesting and perhaps ironic differences show up in the three subgroups of purchasers. Big 3

buyers are almost as familiar with the label as the average purchaser. Transplant purchasers were

slightly less likely to have heard, seen, or read the label, and were less likely to know that they

were buying a car or truck made in the United States or Canada, even though this group is

targeted by transplant manufacturers for "made in the U.S.A." campaigns. Import purchasers

126

were, overall, the most informed about the label. Import purchasers were more aware of the label

than any other group, and they were 2 to 3 times as likely to have seen and/or read the label -

even though, as shown in Table 6-1, they are the group least interested in where vehicles or their

parts come from. As we shall see in Section 6.7, this probably has more to do with demographic

characteristics of import purchasers than their intrinsic interest in the material on the labels.

Conceptually, the staunch "Buy-American" subgroup ought to be especially responsive to the

AALA labels. But in reality they are no more cognizant of the labels than the average consumer:

20 percent of them had heard of the label, 11 percent had seen it and 9 percent had read it.

Rather than using the labels to identify vehicles assembled in North America and containing a high

share of U.S./Canadian parts, they mostly feel they have "bought American" merely by acquiring

any Big 3 vehicle assembled in North America.

6.5 Understanding of the AALA label

The survey included several questions that explored to what extent the AALA label was

understood by those 41 purchasers and planners who had been to a dealership and who had read a

label. First, they were asked their subjective opinion whether the label as a whole, without

reference to any specific portion of it, was "easy to understand." Eighty-six percent said that they

found the label "very easy" or "somewhat easy" to understand, whereas only 14 percent said that

the label was "not too easy" or "not easy at all" to understand.

However, specific quizzing revealed these consumers' understanding of the numerical scores on

the label is, in fact, quite shaky (as opposed to the label's simple declaration of the country of

assembly). People who had read the label were asked what they thought the numerical scores

meant. Fifty-seven percent correctly replied that the first score meant the U.S./Canadian parts

content and the other scores indicate parts content from other countries. Sixteen percent replied

more vaguely that the numbers represented where the car was built/the point of origin. Nine

percent said that the numbers pertain to parts numbers for identification and ordering parts, and

the remainder had various answers such as paint color numbers, serial number of the car, and

quality standards for the car.

People who had read the label were asked whether parts made in Canada or Mexico are included

in the principal numerical score on the parts content label. The correct answer is that Canadian

parts are included and Mexican parts are excluded. However, only 35 percent of respondents said

that parts made in Canada are included on the label, whereas 23 percent incorrectly said that parts

made in Mexico are included on the label.

6.6 Influence of the AALA label on past and future purchasing decisions

Of the 41 purchasers and planners who had read the AALA label at the dealerships, most (33

people) came across the label on their own, and only six said that the salesperson pointed it out

and explained to them the meaning of the U.S./Canadian parts content label. Three individuals

said that the salesperson made the label an important part of the sales presentation. From these

128
data it appears that the salespeople seldom provide prospective buyers with information about the

label at the dealership.

The same 41 people who had read the label were asked how much influence, if any, the

information had on their purchase or lease consideration. They were asked to rate the label's

influence on them using a subjective scale of 1 to 7, where 1 means no influence at all and 7

means a great deal of influence. The distribution (weighted) was:

Score Percent

1 (no influence at all) 26

2-4 (slight/moderate influence) 25

5-6 (stronger influence) 34

7 (a great deal of influence) 15

The mean and median were both 4, indicating that the label had perhaps a moderate influence on

the average person who read it. Given that 7 percent of all purchasers and planners had read the

label at the dealership (Table 6-6) and 26 percent of these were "not influenced at all," we may

infer that approximately 5 percent of all purchasers and planners are currently influenced by the

AALA label at the dealership, at least to some extent.

Next, the 20 respondents that gave a score of 5, 6 or 7 were asked to describe in their own words

how the information on the label influenced their purchase. Fourteen gave specific, relevant

answers: 8 said they learned that "the vehicle was made in the U.S./Canada," 4 "would not have

bought a 'foreign' made car," 1 discovered that the vehicle "was 'foreign' made," and 1 "bought

it because it was not American made." Interestingly, all of these answers appear to draw upon the

country-of-assembly information on the label. Not a single person explicitly stated they had used

the numerical parts-content scores to comparison-shop among make-models, or that they had

selected or rejected a specific vehicle because of its high or low percentage of U.S./Canadian

parts content. Nor did anybody say they were influenced by the AALA label's information on the

country of origin of the engine or the transmission.

Potential future influence: People who initially said they were unaware of the existence of the

AALA label were asked, towards the end of the survey, "Now that you are aware of the label,

would the label influence your future purchase of a vehicle?" Fifty-six percent said yes. That is a

much larger proportion of the purchasers and planners than the current 5 percent who had read

and were influenced by the label in their recently past purchase decision. This should not be

dismissed as merely "people trying to please the interviewer" because respondents were quite

candid on the other parts of the interview - e.g., most people freely admitted they had never heard

of the labels, or frankly stated they did not care where a vehicle was assembled. It indicates that

the AALA information could have substantially more impact if consumers were more widely

aware of it.

129
6.7 Influence of demographic factors

Metropolitan vs. nonmetropolitan: Purchasers and planners' responses were examined by their

geographic location - i.e., according to the areas in which the respondent lives: large city, suburb

of large city, small town, or rural area. The respondents' answers were separated into two

categories: metropolitan and nonmetropolitan, to determine if there were any differences in the

respondent's choices or knowledge and influence of U.S./Canadian content by demographic areas.

The data indicates that nonmetropolitan purchasers and planners have a stronger propensity to

"buy American" (always make it a point to "buy American" whether it's cars or any other items)

than metropolitan purchasers (42 percent compared to 28 percent). However, roughly 50 percent

of both groups said that one of the reasons why they would buy or lease a new vehicle is that it is

made in the USA or Canada. Both groups agreed that reliability was the most important reason

why they would choose to buy or lease a new vehicle (although nonmetropolitan buyers placed a

greater importance on this attribute than metropolitan buyers), followed by safety. That a vehicle

is made in the USA or Canada scored very low, between one and 3 percent, by both groups as the

most important reason why they would choose to buy a vehicle.

Metropolitan purchasers and planners were more often aware of the existence of the AALA than

nonmetropolitan consumers (26 percent compared with 22 percent) and a higher percentage had

seen an AALA label (21 percent compared with 9 percent). In both groups, low percentages said

that the label had influenced their purchase considerations; however, a greater proportion of the

metropolitan purchasers said that now that they are aware of the label, it would influence their

future purchases.

Education: Purchasers and planners were divided into two categories according to their

educational status: people who had completed school from 8th grade through technical school, and

people who had completed college or post-graduate school.

Nearly one-half of purchasers and planners with 8th grade or technical school education said that

they always try to buy American, compared with one-third of buyers with college or postgraduate school. Both groups said that safety and reliability were the most important reasons why

they would choose to buy or lease a new vehicle. That it is made in the USA or Canada was a

minor reason for both to purchase a vehicle.

More people in the college-educated group knew about the AALA compared with the noncollege-educated group. Roughly the same percentage of both groups knew about the label. A

greater percentage of a non college-educated buyers said that the label would influence them in

the future compared with college-educated buyers.

Younger vs. older consumers: Responses from purchasers and planners who were at least 50

years of age were compared with responses from those less than 50 years old to determine

whether there were any differences in opinions and purchasing choices between the two

categories. A greater percentage of purchasers and planners over 50 (63 percent) than under 50

(48 percent) said that an important reason why they would buy or lease a vehicle is that it is made

in the USA or Canada. Conversely, a greater percentage of those under 50 compared with over

130
50 said that a reason they would buy is that it is a foreign vehicle (28 percent compared to 18

percent).

An equal percentage of purchasers and planners over 50 and under 50 knew of the AALA and the

label (24 percent for both), although a greater percentage of those under 50 had seen the label (18

percent compared with 12 percent of all purchasers and planners). Purchasers over 50 said that

the label influenced them more, compared with buyers under 50 (on a scale of zero to 100, they

rated influence as 57 compared with 41 for purchasers under 50). More purchasers over 50 (63

percent) said that the label would influence them in the future compared with younger purchasers

(53 percent). Finally, a greater percentage of purchasers and planners over 50 make it a point to

"buy American" whether it is cars or any other item (89 percent said always or sometimes,

compared with 76 percent of buyers under 50).

131

CHAPTER 7

MANUFACTURER SURVEY

The objectives of the manufacturer information collection are to: inquire about the effects of the

AALA on manufacturers of vehicles in terms of cost, manufacturing changes, parts sourcing and

sales. The survey was sent to all 21 manufacturers selling vehicles in the United States. Survey

data collection took place over a 21-week period. All manufacturers responded to the survey; 17

manufacturers completed the survey and 4 returned partially completed surveys. Subject areas

covered in the manufacturer survey include knowledge of customer awareness of the existence of

the parts content label, guidance or information provided to dealers and customers regarding the

labels, shifts in parts sourcing and assembly of vehicles from one country to another, factors

affecting shifts in sourcing and manufacturing, costs to start up implementation of the AALA,

annual costs for data collection and maintenance of databases, overall costs to manufacturers, cost

of the program to suppliers, and manufacturers' estimate of U.S./Canadian (USCan) parts content

in their model year 1994 vehicles.

A principal finding is that only two manufacturers stated that the AALA labels, or a desire to

increase USCan parts content motivated them to relocate production facilities or sources of

component parts. Most manufacturers believe that consumers have little interest in the labels.

The great majority of manufacturers see little value in the label information as a marketing tool or

selling point for their vehicles.

7.1 Dissemination and perceived importance of the labels

Part A of the survey questionnaire was completed by the sales/customer relations offices within

the vehicle manufacturing company. Job titles of the respondents were fairly evenly divided

among the following: principal engineer, sales planning/training manager, safety engineering

department manager, program manager tax staff, compliance manager/director/engineer, vehicle

safety and legislation function leader, inter-company pricing and trade issues specialist, and

national customer relations manager. Manufacturers reported the makes and models of vehicles

they produced.

Importance of USCan parts content: The manufacturers were asked to rate on a scale of 1 to 7,

where 1 means "not at all a factor" and 7 means "a very important factor," how much USCan

parts content is a factor in selling vehicles in the United States. Of 21 respondents, 15 rated parts

content as a "1 " and six ranked parts content a "2" or "3."

Are customers aware of the label?: Manufacturers reported their perception of what percentage

of customers is aware of the existence of the parts content label, as shown in Table 7-1. The

mean is 10.81 percent, the median is 5 percent. Manufacturer's perceptions can be compared to

the actual experience of consumers: in our consumer survey (Table 6-6), 23 percent of customers

said they knew of the existence of the label, but only 15 percent had seen a label and only 7

133
percent had read a label at a dealership. Thus, manufacturers' perceptions are lower than the

percentage of consumers who knew of the existence of the label, but quite similar to the

percentage who had read the label.

TABLE 7-1

PERCENTAGE OF CUSTOMERS WHOM MANUFACTURERS

THINK ARE AWARE OF THE EXISTENCE OF

PARTS CONTENT INFORMATION LABELS

PERCENTAGE

0

1

2

4

5

10

12

25

30

40

50

NUMBER OF MANUFACTURERS

4

2

2

1

2

5

1

1

1

1

1

Guidelines and materials provided to dealers: Manufacturers were asked whether they had ever

given dealers any guidelines or materials for training sales stafFto explain the information on the

label. Eighteen manufacturers responded that they had not given dealers guidelines or materials,

while two manufacturers responded yes. One manufacturer did not respond.

One manufacturer prepared an explanation of the requirements in 1994 when the AALA was first

introduced, but provided nothing in subsequent years. Another manufacturer developed and

provided a guide that was made available at the 1994 dealers' meeting; however, there was no

mass mailing to dealers. Another manufacturer prepared and sent a letter of explanation to all

dealers with the instructions that the label has to be on the vehicle.

134
Manufacturers were asked if they had ever encouraged or required dealers to make customers

aware of the parts content label. Nineteen manufacturers reported no. Only one manufacturer

responded yes, but said that they discontinued this practice because the selling point has declined

in importance except for trucks. When asked if they had ever provided dealers with any guidance

or recommendations for using the parts label as a selling point, 18 manufacturers said no, and two

reported yes. One manufacturer repeated that they discontinued this practice because the selling

point has declined in importance except for trucks.

Manufacturers were asked if they had ever provided customers with information about USCan

parts content in addition to the label. Sixteen manufacturers responded no, and four responded

yes. One manufacturer said that they prepared customer and dealer information when the law first

went into effect; however, they found that none of their customers was interested in the label, and

so they discontinued distribution of the information.

Advertising strategies: Regarding whether "Built in America" or some other reference to

America is used or had ever been used in their advertising strategies, 15 manufacturers responded

no, while five responded yes. One manufacturer reported that the "Built in America" approach

did not seem to have an impact on their customers, so they changed to another advertising

campaign. Another manufacturer said that this selling point has declined in importance.

As regards advertising methods in various media, only two responded. One manufacturer showed

parts content information in brochures, newspaper ads, magazine ads, and television ads.

A second manufacturer showed parts content information in brochures and magazine ads.

Manufacturers were asked if they had any data or experience that suggests USCan parts content is

important to consumers; 19 manufacturers responded no, and one said yes. Manufacturers were

asked if they had developed a consumer guide to USCan parts content for dealers to give to

customers; 19 manufacturers responded no, and two didn't know. Regarding whether they think

parts content information labels are understandable to the customer, ten manufacturers said no,

eight responded yes, and two didn't know.

7.2 Factors that affect decisions where to locate facilities or buy parts

A principal finding of Chapter 2 is that foreign-based manufacturers substantially increased

USCan parts content from 1995 to 1998 in the transplant vehicles they assemble in North

America, whereas the Big 3 tended to reduce USCan and increase Mexican parts content. This

section of the survey gave each manufacturer an opportunity to declare explicitly whether AALA

and/or other factors influenced the shifts in USCan content.

Part B of the questionnaire supplied the data for this section and the remaining sections of this

chapter. It was completed by the finance/accounting office within the vehicle manufacturing

company. Job titles of the respondents were fairly evenly divided among the following: principal

engineer, sales planning/training manager, safety engineering department manager, program

manager tax staff, compliance manager/director/engineer, vehicle safety and legislation function

leader, inter-company pricing and trade issues specialist, national customer relations manager.

135
Production shifts before AALA: Manufacturers were first asked what significant shifts in content

or assembly, if any, they undertook in the five years prior to 1995 - i.e., before AALA took

effect. Two manufacturers reported an increase in U.S. production of vehicles and sourcing local

content during the 1990's. A few manufacturers shifted parts sourcing and vehicle assembly to

North America. A few manufacturers reported various shifts in production and sourcing within

North America. No manufacturer said that any of their pre-1995 shifts were motivated by the

AALA.

Production shifts to and from the manufacturer's home country - after AALA: Manufacturers

were next asked if they had "recently1" shifted any of their product lines or component parts from

production outside their "home" country to production within their "home" country. The Big 3

might interpret this as shifting production from outside of the U.S. to within the U.S.; foreignbased manufacturers might interpret this as shifting production from a nation (perhaps but not

necessarily the U.S./Canada) outside the home country to within the home country (definitely not

the U.S./Canada). Six manufacturers responded yes, and nine said no. Those that said yes were

shown a list of 19 possible motivational factors, including "parts content information labels" and

"wanted vehicles to have higher US/Canadian parts content." They were asked to check any

factor that applied, and identify the three most important factors.

Manufacturers were similarly asked if they had "recently" shifted product lines or component

parts from inside their home country to outside. For the Big 3, this could mean shifting

production from the U.S. to other countries; for foreign-based manufacturers, this means shifting

production from their home country to outside (and possibly, but not necessarily, to the U.S./

Canada). Six manufacturers responded yes, and 10 said no. Those that said yes were shown 16

possible motivational factors (3 factors, including "wanted vehicles to have higher US/Canadian

parts content" from the previous list were omitted). Again, they checked all factors that applied,

and identified the three most important factors.

The format of these questions can leave it unclear if a shift involved the U.S./Canada and also may

have confused some respondents (what country does the employee of a North American

subsidiary of a foreign-based company call "home"?). Therefore, the data from both sets of

questions have been combined into a single analysis. Table 7-2 lists the 19 motivational factors

cited in the questionnaire. It counts how many times each factor was checked on either set of

questions, and how many times it was listed in the top three on either set of questions.

Only a single Big 3 manufacturer, and no foreign-based company said that the "parts content

information label" was a specific factor in shifting production or component parts from one

country to another. This Big 3 manufacturer and one foreign-based manufacturer also said, more

generally, that they shifted operations because they "wanted vehicles to have higher USCan parts

content." One of them said that this was one of the top three reasons for the shift. Ironically,

neither of these two companies particularly increased their actual overall USCan content during

'The questionnaire did not specify a time frame (see Appendix E, , Part B, Question ^ .,. s 3-4).

We may surmise that manufacturers could interpret "recently" as the 1995-98, post-AALA time

frame, since the preceding question referred to the five years prior to 1995.

136
TABLE 7-2

FACTORS THAT CONTRIBUTED TO THE SHIFT OF PRODUCT LINES

OR COMPONENT PARTS TO OR FROM THE MANUFACTURERS' HOME COUNTRY

FACTORS CONTRIBUTING

TO SHIFT

Parts content information labels

Wanted vehicles to have higher

U.S./Canadian parts content

Cost of labor

Quality of labor

Availability of human resources

Cost of materials

Quality of materials

Availability of materials

Availability of physical plant/equipment

Operating costs

Distribution costs

Wanted to create jobs for Americans

Customer demand

Currency exchange rate

Import duties

Taxes

Availability of credit to invest in

physical plant

Government policies of home country

Federal, State or local incentives to

invest in the United States

ALL

RESPONSES

1

2

4

2

1

7

4

2

6

5

3

2

4

6

3

2

2

2

2

THREE MOST

IMPORTANT FACTORS

1

1

1

3

1

3

3

1

3

2

1

1

137
1995-98. It is noteworthy that, on this questionnaire, none of the foreign-based manufacturers

that substantially increased North American assemblies and/or USCan content in their transplant

vehicles, as shown in Section 2.7, stated that the AALA labels, or a desire for higher USCan

content motivated their action.

Above all, Table 7-2 shows that manufacturers portray cost factors as reasons to shift product

lines or parts: cost of labor, cost of materials, operating costs, distribution costs, currency

exchange rates, import duties and taxes. Availability and quality of equipment, materials and

human resources were also rated important.

Influence of exchange rates: Manufacturers were asked to rate, on a scale of 1 to 7 where 1

means "not at all a factor" and 7 means "a very important factor" how much of a factor the

currency exchange rate relationship is in the manufacturer's decision regarding where to produce

auto parts and vehicles. Five manufacturers rated exchange rate as 2 or 3, six manufacturers rated

4 or 5, and two manufacturers rated 6 or 7. Three manufacturers said that they did not know.

Influence of fleet vehicle purchasers: Manufacturers were asked if any fleet vehicle purchasers

expressed an interest in the parts content information labels. Twelve manufacturers reported no,

two said yes, and three manufacturers did not know. Manufacturers were asked if any fleet

vehicle purchasers indicated a preference for vehicles with high USCan parts content. Eleven

manufacturers responded no, two reported yes, and four did not know.

7.3 Cost of AALA to manufacturers

Overall cost of AALA to date: Manufacturers were asked to estimate their overall cost to

implement the AALA, and reported a range of costs from less than $250,000 to over $6 million,

as shown in Table 7-3. These costs represent cumulative costs from the implementation of the

AALA in late 1994 until the time of the survey in September 1998. According to manufacturers,

these costs include programming systems; developing processes; labor costs for additional people;

administrative and training; sending and receiving supplier information; tracking origin of all parts;

performing calculations and currency conversions; providing AALA information to their U.S.

importer; incorporating information into the Monroney label2; computer hardware and software

and associated service personnel; manpower to obtain supplier certificates and calculate parts

content value; procure and distribute labels and apply them to the vehicles. It appears that no

single factor seems to account for a majority of the cost. The estimated median cost among the

21 manufacturers was $1.0 million.

2The Monroney label is a sticker on the vehicle window required by law that shows the

base price, options, retail price, destination charges, and fuel economy.

138
TABLE 7-3

MANUFACTURERS' ESTIMATED OVERALL

COST TO IMPLEMENT THE AALA

I COST TO IMPLEMENT THE AALA

Less than $250,000

$250,000 to less than $500,000

$500,000 to less than $1 million

$1 million to less than $2 million

$2 million to less than $3 million

$3 million to less than $4 million

$4 million to less than $5 million

$5 million to less than $6 million

Over $6 million

Don't know/no response

NUMBER OF RESPONSES ||

3

4

3

1

1

0

0

2

1

6

Based on the costs from Table 7-3, manufacturers' estimated total cumulative costs to implement

the AALA ranges from $37,875,000 to over $47,500,000 (assuming the manufacturers with

unreported costs had the same distribution as those not reporting their costs). The total estimated

overall cost per vehicle to implement the AALA ranges from $0.63 to over $0.79 per vehicle,

based on 21 manufacturers' total estimated overall cost to implement the AALA and sales of

approximately 60 million passenger cars and light trucks during the period October 1994 to

September 1998.

Manufacturers attributed their costs to implement the AALA to the factors listed in Table 7-4.

139
TABLE 7-4

FACTORS AFFECTING COSTS

FACTORS AFFECTING COSTS

Incremental manpower/number of manpower

hours

Systems development

Administrative and training

Label inventory/distribution

Tracking of parts/information

Calculations/calculations of final percentages

Obtaining/sending information from/to

suppliers

Labor costs

Miscellaneous factors

No factors cited

NUMBER OF RESPONSES

3

1

1

1

1

2

0

1

5

13

Hours for startup: As regards to the number of hours spent on the startup to implement the

AALA, manufacturers provided the responses shown in Table 7-5. The median is 850 hours and

the mean is 5,698 hours for the 10 manufacturers that responded.

Startup costs: Startup costs are a one-time cost to begin implementation of procedures for

collecting information to meet AALA. requirements. Manufacturers offered the following

explanation for the AALA startup costs: systems development, administrative and training,

incremental manpower, new computer based systems used to prepare, calculate, and retain AALA

information, tracking AALA regulations, company discussions, changes in purchasing database,

obtaining and entering data from suppliers, developing reporting routines, and undergoing major

changes for a few years because of constant changes in the law.

Table 7-6 indicates that manufacturers' median startup cost is an estimated $250,000. The sum of

the estimated startup costs for the 21 manufacturers range from $5,200,000 to over $6,050,000.

140
TABLE 7-5: NUMBER OF HOURS MANUFACTURERS SPENT

ON THE STARTUP TO IMPLEMENT THE AALA

NUMBER OF HOURS

100

200

500

600

800

900

2500

7500

13000

30880

Don't know/no response

NUMBER OF RESPONSES ||

1

1

1

1

1

1

1

1

1

1

11

TABLE 7-6: MANUFACTURERS' STARTUP COSTS FOR THE AALA

STARTUP COST

Less than $100,000

$100,000 to less than $200,000

$200,000 to less than $300,000

$300,000 to less than $400,000

$400,000 to less than $500,000

Over $500,000

Don't know/no response

NUMBER OF RESPONSES |

2

2

4

0

0

4*

9

* Adjusted for assumptions.

141
Annual staff hours spent on AALA: Table 7-7 shows how many staff hours the manufacturers

spend each year to maintain compliance with AALA. The median number of annual hours spent is

576 and the mean is 1,601 hours for the 12 respondents.

TABLE 7-7: MANUFACTURERS' ANNUAL HOURS SPENT FOR

OPERATING AND MAINTENANCE OF AALA

NUMBER OF HOURS

36

40

80

100

160

325

830

1000

1250

1500

3760

10125

Don't know/no response

NUMBER OF RESPONSES

1

1

1

1

1

1

1

1

1

1

1

1

9

Annual costs for operating and maintenance: Manufacturers were asked to indicate how much

they spent annually for continued operating and maintenance costs associated with the AALA.

Their responses are shown in Table 7-8. Manufacturers' estimated annual costs for operating and

maintenance of AALA range from $20,000 to over $100,000.

142
TABLE 7-8: MANUFACTURERS' ANNUAL COSTS

FOR OPERATING AND MAINTENANCE OF AALA

ANNUAL COSTS

Less than $20,000

$20,000 to less than $40,000

$40,000 to less than $60,000

$60,000 to less than $80,000

$80,000 to less than $100,000

Over $100,000

Don't know/no response

NUMBER OF RESPONSES 1

2

1

4

1

0

6

7

Manufacturers offered the following explanations for annual costs for data collection and

maintaining the database for the content reporting requirements for the AALA: the AALA does

not include systems maintenance costs associated with the generation of stickers; additional costs

include label inventory and applying the correct labels to every vehicle year before dealer

shipments; number of manpower hours multiplied by applicable labor rate determined annually;

labor costs, review bill material, initiate, review, follow-up, and data entry of supplier responses;

calculation of final percentages and analysis; continued operation and maintenance costs;

obtaining information from suppliers; daily tracking of information. The estimated median annual

cost for operating and maintenance is $70,000. If 21 manufacturers spent $70,000 each, the total

cost would be $1,470,000, and the marginal cost per new car or truck would be $0,098. Even if

the mean is 2 or 3 times higher than the median the marginal cost (excluding startup costs) would

not exceed $0,295 per vehicle.

AALA costs vs. NAFTA and CAFE: Manufacturers were asked if the cost for data collection and

maintaining the database for the content reporting requirements for the AALA are higher, lower,

or about the same as the costs incurred for the North American Free Trade Agreement. Two

manufacturers reported higher costs, three manufacturers reported lower, and five reported the

same. Eleven manufacturers did not respond or said they did not know.

Manufacturers were asked if the cost for data collection and maintaining the database for the

content reporting requirements for the AALA are higher, lower, or about the same as the costs

incurred for data collection for assigning passenger cars to domestic or import fleets for

Corporate Average Fuel Economy. Eight manufacturers reported that the costs were higher, one

reported lower, two reported that the costs were the same, and ten did not know or did not

respond.

143
USCan content in model year 1994: Manufacturers were asked to consider the model year 1994

vehicles they manufactured and to provide an estimate of each carline's USCan parts content,

using AALA definitions. The purpose of this question was to find out if any major changes in

USCan content occurred from 1994 to 1995, even before the AALA took effect. (Such changes

would not have been revealed in the Chapter 2 analysis, which is based only on AALA compliance

data from 1995 through 1998.)

Two large manufacturers provided data that indicated no changes in USCan content from MY94

to MY95, while a few smaller manufacturers reported small increases in USCan content during

this period. While it is difficult to draw conclusions from this limited response, it would appear

there was no substantial increase in overall USCan content between model year 1994 and 1995.

Cost of AALA to suppliers: Manufacturers were asked if their suppliers use a single form for

reporting information required for the NAFTA, CAFE, and the AALA, thus reducing suppliers'

reporting costs. Twelve manufacturers said no, two reported yes, and eight did not know or did

not answer.

Table 7-9 indicates what kinds of costs manufacturers say AALA imposes on suppliers.

TABLE 7-9

COSTS IMPOSED ON SUPPLIERS AS A RESULT OF THE AALA

COSTS

Annual employee hours

Payroll costs

Set-up and maintenance of computer

database

Cost of paper certificates

Don't know/no response

NUMBER OF RESPONSES |

10

11

10

6

10

Manufacturers reported their estimates of the overall cost of this program to suppliers to date, as

shown in Table 7-10. Manufacturers' estimated median cost to suppliers is $200,000, and the

mean is $475,167 for the six manufacturers that responded.

144
TABLE 7-10: MANUFACTURERS' ESTIMATE OF COST TO SUPPLIERS

COST

$999

$150,000

' $200,000

$500,000

$1,000,000

Don't know/no response

NUMBER OF RESPONSES

1

1

1

1

2

15

Manufacturers were asked whether all of their purchase orders to suppliers include a requirement

to furnish USCan parts content information. Seven manufacturers responded yes, seven

responded no, and seven did not know or did not answer.

Table 7-11 presents manufacturers' reports on what percent of their suppliers furnish USCan

parts content information. The median percentage of suppliers that furnish USCan information is

92.5.

TABLE 7-11: PERCENT OF SUPPLIERS THAT FURNISH

US/CANADIAN PARTS CONTENT INFORMATION

| PERCENT

1

35

80

90

95

97

99

100

Don't know/no response

NUMBER OF RESPONSES 1

1

1

2

2

1

1

1

2

10

145
Manufacturers were asked by what percentage their costs will change following the end of the

2-year provision which allows flexibility in making estimates of content determinations where

outside suppliers have not responded to requests for content determination. Manufacturers' costs

would presumably increase when the provision allowing flexibility in making estimates expires.

Four manufacturers responded they did not expect any cost increase, two expected a 10 percent

increase, one each expected 12, 25, and 50 percent increases, and 12 did not know or did not

respond.

146
CHAPTER 8

DEALER SURVEY

The objectives of the dealer information collection are to: inquire about the extent to which newvehicle dealers understand the content labels, provide this information to potential and actual

customers, and find it useful or detrimental in marketing.

Subject areas surveyed in the dealer questionnaire included dealer awareness of the AALA and

label, dealer advertising of the label through various media, dealer franchise and sales volume,

customer knowledge and understanding of the label, customer consideration of information on the

label in purchase decisions, customer buying preferences, sales staff awareness and understanding

of the label, sales staff training, guidelines and materials provided by manufacturers to dealers and

staff, and use of information on the label in sales presentations.

While most dealers see little value in the label information as a marketing tool for the average

consumer, quite a few dealers acknowledge that there is a substantial group of consumers that

cares about "Buying American," and that this group finds the AALA label useful, especially for

identifying a vehicle's country of final assembly.

8.1 Description of the sample

Survey data collection took place over a 14-week period. The survey was mailed to 500 dealers

in August 1998, and 195 completed surveys were returned, as explained in Section 5.5. Job titles

of the respondents included dealer/principal (50 percent), general manager (31 percent), sales

manager (14 percent), owner (1 percent), and salesman (1 percent).

Sixty-four percent of the respondents had franchise total gross annual new vehicle sales volumes

of less than $25 million, 11 percent reported sales volumes of $25 to $49 million, 7 percent

reported sales of $50 million to $100 million, and 2 percent reported sales of over $100 million

Sixty-seven percent of dealer respondents had one to ten persons on their new vehicle sales staff.

Twenty-two percent of dealers had new vehicle sales staffs of 11 to 20 persons, and 4 percent had

staffs of 21 to 60 persons.

8.2 Dealer awareness of the label

The survey began by asking dealers how aware they are of the AALA and the parts content label.

An overwhelming 81 percent of dealers had at least some knowledge of the AALA regulation and

the label. This is distributed as follows: 53 percent of dealers said that they were very aware of

the regulation and the label, 28 percent responded that they were somewhat aware. Seventeen

percent said that they were not very aware or not at all aware of the AALA and the label.

147
8.3 Dealer advertisement of the label

Dealers were asked to report what media they used for presenting parts content information.

Approximately 80 percent of dealers said they do not advertise parts content information or did

not specify a medium. Of those dealers who do advertise, information is conveyed primarily

through in-store displays and brochures, as shown below:

MEDIA

PRESENTATION

In-store Displays

Brochures

Newspaper Ads

Magazine Ads

Television Ads

Radio Ads

Other

None

Don't Know

PERCENT OF

DEALERS

10

8

2

1

1

0

4

58

21

8.4 Dealers* perceptions of customer response to the labels/buying preferences

Customer awareness and understanding of the label: Dealers were asked to rate customer

awareness and comprehension of the parts content information on the label on a scale of 1 to 7,

where 1 means "describes none of my customers" and 7 means "describes all of my customers."

The responses were distributed along a scale of zero to 100, for ease of comparison, where zero

corresponds to 1 and 100 corresponds to 7. Dealer responses to the scale that fell between 2 and

6 were distributed along the zero to 100 scale, based on the assumption of linear gradation of

intermediate values on a scale from 17 through 83.

Regarding customer awareness of the existence of the label, dealers scored customers a

moderately low 36, with a standard error of 1.8. Dealers scored customers an even lower 25

when asked if they read the label on the vehicle window (standard error of 1.7). Furthermore,

dealers rated customers at a low 16 regarding whether customers ask questions about the

information on the label (standard error of 1.6). However, of the customers who read the label,

dealers indicated that a fair number understand the label (score of 40, standard error of 2.6). The

number of dealers that responded to these questions ranges from 155 to 172, out of a total of 195

dealers.

148
These data indicate that dealers presume that a fairly low number of customers know of the

regulation and label, and a few are sufficiently interested to read and ask particulars about the

information on the label. In fact, the consumer survey (Table 6-6) indicated that only 23 percent

of customers actually knew of the existence of the label and only 7 percent had read it. If the

preceding numerical scores in the dealer survey are equivalent to percentages (although it is not

clear that they should be), it may be inferred that dealers,-if anything, slightly overestimate the

level of customer awareness of the labels.

The dealers were divided into two subgroups: the 120 dealers selling exclusively Big 3

nameplates; and the 42 "foreign-based" dealers selling exclusively nameplates of foreign-based

companies. (The 21 dealers selling both Big 3 and foreign-based nameplates and the 12 dealers

who did not specify what nameplates they sold were not included in the subgroups, but were

included in the analyses of all 195 dealers.) The two subgroups were analyzed to evaluate

whether any variations exist between the dealerships, their sales staff and customers, and their

survey responses. The responses for the subgroups were calculated the same as above, by

converting the 1 to 7 scale to zero to 100.

With respect to the dealers' perception of customer awareness of the existence of the label,

customer reading the label on the window of the vehicle, customer asking questions regarding

information on the label, and customer understanding of the label, both Big 3 and foreign-based

dealers responded similarly, except that a few more foreign-based dealers than Big 3 said that

customers read the label on the vehicle window (score of 27 compared to 24), and slightly more

foreign-based dealers said that customers understand the label (score of 43 compared to 38). It

appears that more customers in foreign-based dealerships are curious about parts content

information, but perhaps this is because these customers are aware that vehicles of foreign-based

companies could be assembled either in North America or overseas and they are seeking particular

information, whereas the customer in the Big 3 dealership may take for granted that the vehicle is

assembled in North America and has a high level of U.S./Canadian (USCan) content, or is loyal to

and interested in a Big 3 vehicle, and the label information is not a consideration among buying

factors.

Buying preferences: Dealers were asked to rate customer buying preferences and factors

affecting their decisions in selecting a vehicle on a scale of I to 7 where 1 means "strongly

disagree" and 7 means "strongly agree." The responses were distributed along a scale of zero

(corresponding to 1) to 100 (corresponding to 7), to facilitate the comparison of scores, and we

assumed a linear gradation of intermediate values between 17 through 83.

Dealers scored 21 (standard error of 1.9) in their responses to the following statement:

"Customers consider U.S./Canadian parts content an important factor for selecting a vehicle."

This low score indicates that dealers think that, generally, customers do not consider USCan

content as a top priority in choosing a vehicle. Dealers scored an even lower 16 (standard error

of 1.7) in response to whether they believe that customers consider the information on the parts

content label when making a purchase decision. The results of this follow-up statement

emphasize that dealers believe that USCan content plays an even smaller role when customers are

ready to buy a vehicle.

149
Big 3 dealers rated customer consideration of USCan parts content an important factor for

selecting a vehicle higher (score of 23) than did foreign-based dealers (score of 15), which is

expected. However, both Big 3 and foreign dealers scored the same, at 16-17 in response to the

customer's consideration of the label information when making a purchase decision, which

supports the finding that in the customer's final analysis, the label is a relatively unimportant

factor when the time comes to purchase from either a Big 3 or a foreign-based dealer.

Dealers were asked to rate on a scale from 1 (strongly disagree) to 7 (strongly agree) the

statements: "Customers show a preference in buying American" and "Customers show a

preference in buying foreign." The responses were distributed the same way as the data above.

Dealers scored each of these statements in the mid- to upper 30's (each with a standard error of

about 2.4).

However, Big 3 dealers scored much higher (score of 48, standard error of 3.0) in response to the

statement about preference in buying American, compared to customer preferences in buying

foreign (score of 16, standard error of 3.3), which is reasonable. Dealers with foreign-based

franchises roughly paralleled a preference for foreign vehicles (score of 43, standard error of 5.7)

compared to preferences in buying American (score of 28, standard error of 2.6); again, this

appears reasonable. It is evident that Big 3 dealers strongly believe that customers are particularly

interested in and make a point of buying the vehicles they sell; at the same time, dealers of Big 3

vehicles know that some customers are also interested in imported vehicles. Correspondingly,

dealers of vehicles manufactured by foreign-based companies firmly believe that their customers

strongly want to purchase imported vehicles. There appears to be a definite sense of customer

loyalty to both North American and overseas-built vehicles.

Dealers scored very high (score of 89, standard error of 1.9) in their opinion that customers are

more interested in the purchasing or leasing price of an automobile than the information on the

parts content label. Big 3 dealers scored this question high (score of 88, standard error of 2.5),

and foreign-based dealers scored even higher (score of 93, standard error of 2.8). The survey

underscores that price greatly predominates issues and concerns regarding USCan content when

consumers consider both factors.

Label influence: Dealers were asked which aspect of the AALA label customers are most

interested in. Final assembly point was clearly the most important component of the parts content

label for consumers, according to dealers (29 percent). Sixteen percent of dealers said USCan

parts content was the most important aspect, and 3 percent each referred to major sources of nonUSCan parts content, and country of origin of engine parts. It appears that dealers think that

customers are interested mainly in the primary information on the label, without additional details,

perhaps concluding that the location of assembly is the most important piece of information, and

the most critical to the vehicle's intrinsic and monetary value.

Customers have not expressed concern because the numerical parts content score combines U.S.

and Canadian parts, according to 84 percent of dealers. Only 7 percent of dealers reported that

customers were concerned about combining the countries. Dealers do not consider this a

significant issue.

150
Customers have never declined to purchase a vehicle as a result of the kind of information

provided on the parts content label, according to 82 percent of dealers. Nine percent of dealers

(16 dealers) reported that at least one of their customers has declined to purchase because of the

information.

Dealers were asked whether customers have ever decided to purchase a vehicle as a result of the

kind of information provided on the parts content label, and 75 percent reported no, while 5

percent (nine dealers) indicated yes, at least one customer has purchased the vehicle based on the

label information.

It appears from the responses that the information on the parts content label has little influence on

most customers' purchase decision-making. Dealers believe that there are stronger considerations

that customers take into account, particularly price, when purchasing a vehicle. Nevertheless,

dealers acknowledge that occasionally a customer decides to buy a vehicle after taking the label

information into account.

8.5 Sales staff knowledge, training and presentation of the labels

Awareness and understanding: The survey polled the extent to which sales staff is aware of the

label, understands the label, and can explain the information to customers, on a scale of 1 to 7,

adjusted to a zero to 100 scale, as explained above. Dealers (including Big 3 and foreign-based)

rated their sales staff fairly high, at about 70 for all of the above; except that foreign dealers rated

their staff slightly higher in awareness (score of 79) and understanding the label (score of 74).

Since foreign manufacturers have raised concerns about a number of issues, including how the

USCan content score is calculated, distinguishing between countries of production within a

particular carline, the definition of final assembly, and have expressed additional comments from

the inception of the regulation, they are more likely concerned that their dealers and sales staff

should be knowledgeable about and prepared to explain the label. Foreign-based manufacturers

probably make a stronger effort to achieve this result.

Dealers (including foreign-based and Big 3) rate their staff at about 48 in keeping updated on

parts content information, which is rather high considering the modifications in the intricacies and

complexities of the regulation during the past few years.

Sales staff training: Although dealers indicated optimistically that their staff is informed about the

information on the label, it does not appear that many dealers offer various types of training to

sales staff, as shown below:

151
PERCENT OF DEALERS

TRAINING OFFERING TRAINING

Sales meeting 44

Brochure 12

Seminar 2

Workshop 2

Other 2

No training 32

Don't know/no response 6

In fact, 51 percent of dealers said that manufacturers provided them with no guidelines or

materials for training sales staff to explain the information on the parts content label. Only 23

percent of dealers indicated that manufacturers had supplied training assistance.

Similarly, manufacturers are lacking in providing any guidelines or recommendations for using the

parts content information label as a selling point. Sixty percent of dealers said they have not been

provided with materials, and only 15 percent indicated yes.

Label use in sales presentation: Dealers were asked under what circumstances are sales staff told

to explain parts content information labels to customers. One-half of the dealers reported that

sales staff give the information to customers only when they inquire about it. Only 2 percent (five

dealers) said that sales staff give the information to customers without being asked. Forty-four

percent of dealers indicated that sales staff are not given any guidelines as to when to give

customers information. The responses indicate that virtually none of the sales staff voluntarily

offers the label information to customers.

However, all of the dealers, (including Big 3 and foreign-based) scored their sales staff at 20 for

pointing out the parts content label to customers. Interestingly, foreign-based dealers scored

lower (score of 9) than Big 3 dealers (score of 12) for sales staff making the parts content

information label an important part of the sales presentation, although staff in foreign-based

dealers are more aware and have greater understanding than their counterparts in the Big 3

dealerships.

All dealers (including Big 3 and foreign-based) scored "labels are used as a sales tool" and "labels

are not used in the sales process" at 14 and about 63, respectively, emphasizing that the labels

generally do not play an active role in the sales process.

152
If, however, there is particular information that may be of interest to the customer and would

advance a sale, the survey shows that this information is offered to the customer. For example,

sales staff at Big 3 dealers are more likely to furnish customers with the percentage of USCan

parts content (score of 18) than sales staff at foreign-based dealers (score of 11). Interestingly,

both Big 3 and foreign-based dealers' sales staff nearly equally (score of 32 compared to 28) are

likely to use the labels in sales presentation if the vehicle was assembled in the United States. It

appears that foreign-based dealers' staff is sensitive to the "made in the U.S.A." issue in

marketing and provides this information to customers at about the same competitive rate as the

Big 3 sales staff.

Dealers generally did not believe that sales staff would likely use the label in a sales presentation if

a high percentage of parts were manufactured outside of the United States, and scored their staff

low at 16 on the scale of zero to 100. Big 3 dealers rated their staff lower, at 15, and foreignbased dealers rated their staff higher, at 20. The relative difference in Big 3 - foreign-based

ratings seems reasonable, since Big 3 dealers' sales staff is unlikely to point out foreign parts

content in a Big 3 vehicle, which may dissuade a customer, while a sales presentation at a foreignbased dealer may benefit from emphasizing high content from overseas countries esteemed for

quality engineering.

Interestingly, more Big 3 dealers (score of 40) than foreign-based dealers (score of 27) thought

that parts content information can be harmful to making a sale. Perhaps Big 3 dealers believe that

consumers of Big 3 vehicles (who may have strong brand loyalty) would be more discouraged

from a sale if the label indicates non-USCan assembly or substantial non-USCan parts content.

Also, Big 3 dealers scored lower (15) compared to foreign-based dealers (score of 21) when

asked if their sales staff is likely to point out the label if the U.S. is country of origin of the

transmission. This may indicate that regardless of the information on the label (even if the

information may be helpful to making a sale) the Big 3 sales staff is unlikely to point out the label

Conversely, the foreign-based dealer may make more of an effort to inform the customer.

Assembly/content information apart from the AALA label: The last series of questions had to do

with how much information about the vehicle the sales staff provides apart from the label. In

nearly all cases, the foreign-based dealers believed that their sales staff provided more information

than did the Big 3 dealers, which is concurrent with earlier results that the sales staff at foreignbased dealers has greater awareness and understanding of the label, is more likely to point out

certain parts of the label, and does not believe that the information can be harmful to making a

sale. For example, foreign-based dealers scored 47, and Big 3 dealers 35, with respect to whether

the sales staff provides information apart from the label concerning the final assembly point of the

vehicle. Also, foreign-based dealers scored 31 and 28, compared to a Big 3 score of 20 and 18,

on whether the sales staff provides information apart from the label about the country of origin of

the engine and transmission parts, respectively.

Regarding providing information apart from the label about percentages of USCan parts that

comprise the vehicle, Big 3 dealers scored their sales staff at 23, while foreign-based dealers

scored 14. Conversely, the scores for sales staff providing information apart from the label when

153
the major sources are not the U.S. or Canada are almost reversed, with foreign dealers scoring

their staff at 21, and Big 3 dealers scoring sales staff at 16, which is reasonable.

In general, these responses suggest that dealers do not frequently discuss country of origin as part

of their sales presentation. One exception is that the country of final assembly, especially if it is

the United States or Canada, is sometimes emphasized, using both the information on the label

and apart from the label. There is less interest in parts than in the final assembly.

154
DISCUSSION OF FINDINGS

The macro-finding of the statistical analysis of sales data is that the introduction of American

Automotive Labeling Act (AALA) labels in model year 1995 was not followed by a massive

immediate or subsequent change in U.S./Canadian (USCan) parts content in new vehicles sold in

the United States. In fact, it declined slightly, from an average of 70 percent in model year 1995

to 67.6 percent in model year 1998. Similarly, the percent of new vehicles sold in the United

States that were assembled in the United States or Canada declined from 82 percent in model year

1994 to 80 percent in 1998 (Section 2.2).

One of the most important findings is that transplant vehicles substantially increased their

proportion of USCan parts: from 47 percent in model year 1995 to 59 percent in 1998 (Section

2.4), with even larger increases by some manufacturers (Section 2.7). At first glance that could

be a response to the consumer information on USCan parts content.

Nevertheless, this report hardly claims that the AALA labels caused all or even a large part of the

increase. Nearly simultaneous with the AALA, a 1995 U.S.-Japan Agreement on Autos and Auto

Parts was dedicated to increasing North American parts content in the transplant vehicles of the

Japanese-based companies (Section 1.3). Even before the 1995 Agreement, in fact since the

1960's, a series of laws, regulations, international agreements and incentives had already spurred

foreign-based manufacturers to transplant assembly and parts facilities to the U.S. (Section 1.2).

Under the circumstances, it is virtually impossible to quantify the relative effects of AALA, the

1995 Trade Agreement, and the earlier measures. The strong, explicit terms of the Agreement

and the current near absence of consumer interest in the numerical scores of the AALA (Section

6.6) intuitively suggest that the Agreement has had more direct effect than the AALA labels. The

fact that it takes lead-time to shift production and parts-sourcing suggests the pre-1995 measures

could still have been influential in 1995-98. Moreover, only one of 21 manufacturers in our

survey (and that company did not dramatically increase USCan content in 1995-98) stated that

parts-content information labels influenced a shift in their production or parts facilities (Section

7.2). However, one benefit of the AALA labels has been that U.S. Government agencies use the

numerical parts-content scores to monitor progress under the Agreement.

Section 2.3 shows the gain in USCan parts among transplants was offset by a loss among the

Big 3, from 89 percent in model year 1995 to 84 percent in 1998. (Since the Big 3 account for a

lot more sales than transplants, the net result is a decline of USCan content for the entire newvehicle fleet.) But it appears that most of these non-USCan parts are coming from Mexico rather

than overseas, consistent with the North American Free Trade Act (NAFTA). (In this context,

Section 6.5 showed that consumers are often unaware that the numerical score on the AALA

label includes Canadian parts but excludes Mexican parts: 35 percent of those who had read the

label knew it included Canadian parts, while 23 percent mistakenly thought it also included

Mexican parts.)

155
The trend in import dependence in motor vehicles and parts is no more, and if anything slightly

less than the trends in other consumer goods such as refrigerators, carpets, cosmetics, furniture,

etc. In 1992-98 there was unprecedented prosperity and a strong dollar in the United States while

several other large countries experienced recessions or reduced buying power. That by itself

would tend to increase net imports for all types of consumer goods. Chapter 4 and especially

Table 4-4 show that even though the AALA, the U.S.-Japan Agreement, etc. did not massively

reverse an economy-wide trend, the growth in import dependence for motor vehicles and parts

was just a bit smaller than the average for the other consumer goods.

The regression analyses of Chapter 3 showed that make-models that increased USCan content

from one year to the next more often than not increased their sales. Regression results do not, by

themselves, establish a causal relationship between USCan content and sales. Given that few if

any consumers are using the numerical USCan content scores for "comparison shopping," it is

most unlikely that increased USCan content "caused" the sales growth. Nevertheless, makemodels that increased USCan content have not been suffering in the market place.

The macro-finding of the consumer survey is that the great majority of the public knows little or

nothing about the labels. Among 425 new car purchasers - people who had acquired a new

vehicle with all its labels and stickers within the past six months - only 23 percent were aware of

the existence of the AALA label on new vehicles, only 16 percent had seen it, and only 7 percent

had read it at the dealership1. Over half of those who read the label said they were influenced by

it, but they were primarily swayed by its country-of-assembly information. Not a single person

explicitly stated they had used AALA's numerical parts-content score to comparison-shop among

make-models according to their percentages of USCan parts, or that they were influenced by the

country of origin of the engine or the transmission (Sections 6.4 and 6.6).

The two macro-findings of this report are quite consistent with one another: if few people read

the labels, it is understandable that they would not have a massive net impact on sales. However,

the macro survey findings do not reveal that rather large groups of consumers think the country of

origin of vehicles and parts is important and could potentially derive more value from the labels

than they do today.

Although "only" 7 percent of new-vehicle purchasers are currently reading the labels at

dealerships, given new-vehicle sales of 15 million per year, that implies slightly over a million

new-vehicle buyers are reading the labels each year: a not insubstantial group. In the survey,

about a third of the people who read the label explicitly stated they were moderately or strongly

influenced by its information on the vehicle's country of assembly (Sections 6.4 and 6.6). In other

words, the AALA is already benefitting at least 300,000 consumers per year by furnishing easily

readable and influential country-of-assembly information. (Country-of-assembly information was

available to consumers before the AALA, but not necessarily in a standardized and conveniently

*In other words, 23 percent of the 425 survey participants knew of the existence of the

label; 16 percent of the 425, and they are a subset of the first group, not only knew the label

existed but had actually seen a label somewhere; and 7 percent of the 425, and they are a subset of

the second (and the first) group, had seen and read the label while at the dealership.

156
accessible form like the AALA labels.) Nevertheless, the current effect of the labels in general,

and their numerical parts-content scores in particular, is limited because they are not well known

to consumers, especially those who care about in what country goods are produced.

Our survey allowed consumers to rank the importance of various factors in their selection of a

new vehicle. Table 6-1 shows that the average new-car purchaser ranked "made in the U.S. or

Canada" less important than most of the other attributes that people typically consider when

buying a vehicle (reliability, safety, price, etc.). But that includes buyers of vehicles imported

from overseas, who obviously consider "made in the U.S. or Canada" of little or no importance.

People who bought Big 3 vehicles, over 70 percent of the new-vehicle market, attached

somewhat more value to a vehicle and/or its parts being made in the U.S. or Canada. They

considered it about as important as the vehicle's optional equipment, fuel economy, cargo

capacity and the dealer's reputation: a solid member of the "second tier" of selection factors (the

"first tier" being reliability, drive quality, safety, manufacturer reputation, price, styling and size).

Furthermore, the survey identified a considerable subgroup of consumers that staunchly believes

in "buying American." One-sixth of the survey participants were in that group. That proportion

would extrapolate to 2,500,000 new-vehicle sales per year. They rate it critically important that

vehicles be made in the U.S. or Canada and, more generally, they always try to "buy American"

when they go to a store. Their actions square with their values. In our survey, 100 percent of

them bought vehicles made in North America: 96 percent bought Big 3 vehicles assembled in the

United States, Canada or Mexico and 4 percent bought transplants assembled in the U.S.

Conceptually, a group that cares so deeply ought to be especially responsive to the AALA labels.

But they are currently no more cognizant of the labels than the average consumer: 20 percent of

them had heard of the label, 11 percent had seen it and 9 percent had read it at the dealership.

Rather than perusing the numerical USCan content scores and comparison-shopping for the

highest percentages of USCan content, they mostly feel they have "bought American" merely by

acquiring any Big 3 vehicle assembled in North America.

If the staunch "buy American" consumers or other groups of consumers were more keenly aware

of the labels - e.g., if they had convenient access to tabular listings of the USCan content of makemodels in each vehicle class - they might conceivably be more likely to use this information as a

factor in selecting vehicles.

Another sign that the AALA labels could have more impact if consumers were better informed

about them is that 56 percent of our survey participants said, after the interviewer had explained

the label to them, that it would influence their future vehicle purchases - in contrast to the just 5

percent who said the label had influenced their recent purchase (Section 6.6). This promising

response is somewhat vague: consumers did not specify exactly how they would be influenced.

Nevertheless, it should not be dismissed as merely "people trying to please the interviewer"

because respondents were quite candid on the other parts of the interview.

But at this time no organization, government or private, makes a sustained effort to inform and

educate the consumer about the AALA labels (nor does the AALA law mandate any organization

157
to make such an effort). That stands in contrast, for example, to NHTSA's crash test ratings.

The agency not only disseminates them directly to the public through its web site2 and brochures,

but also provides them regularly to the press and the safety community, where they are

extensively published in magazines such as Consumer Reports, insurance companies' customer

gazettes, and newspaper articles. It also contrasts with fuel economy (CAFE) ratings. They may

be viewed at a Federal web site3 in an easy-to-understand format: ranking the fuel economy of

each make-model within the various vehicle classes. At least in past years, they were also widely

printed in newspapers and magazines in that format.

NHTSA could study the potential impacts and appropriate media for expanding public

information and education about the labels in general and the numerical USCan parts-content

scores in particular. A basic approach would be to display the AALA label information at the

NHTSA web site, listing make-models in each vehicle classes by percent USCan content. Other

strategies could include a more extensive media outreach - e.g., in cooperation with organizations

that have an interest in this issue, or via media widely read by demographic groups that care about

the issue. Of course, there is no guarantee that making consumers more aware of the labels

would necessarily influence many of them to use the information in their purchasing decisions

(notwithstanding even that 56 percent of the consumers in our survey said they would be

influenced in the future). It might be appropriate to conduct preliminary market research (e.g.,

focus groups) on that question before attempting any extensive outreach program.

The manufacturer and dealer surveys showed the auto industry thinks customers have only a

limited awareness of the labels, at best a modest general interest in where vehicles are assembled

and little or no specific interest in parts content. Given those perceptions, manufacturers are

unlikely to expound on parts content to customers, advertise make-models' USCan content, or

compete on the basis of USCan content - in contrast to safety and fuel economy, where they have

done all of these things, at least to some extent. The manufacturers' attitudes cannot be expected

to change unless they witness a major increase of consumer awareness and interest in the labels,

and not necessarily even then.

In summary, this evaluation suggests that the AALA so far has had two definite and one doubtful

impact. One definite impact is that a substantial proportion of the consumers who read the AALA

labels at a dealership find them convenient and influential for identifying in what country a vehicle

was assembled. Also, definitely, Federal agencies have used the parts content scores for

monitoring progress under the U.S.-Japan Agreement on Autos and Auto Parts. The doubtful

impact is that the labels may have contributed to the increase of USCan content in transplant

vehicles during 1995-98: while there is no doubt that USCan content increased substantially, it is

uncertain to what extent, if any, the labels contributed to the increase - given that the U.S.-Japan

Agreement on Autos and Auto Parts, as well as earlier measures, intuitively seem to have been

quite a bit more influential.

2www.nhtsa. dot, gov/cars/testing/ncap

3www. fueleconomy.gov jointly maintained by the Department of Energy and the

Environmental Protection Agency.

158
The two major shortcomings of the AALA at this time are: (1) The overwhelming majority of

consumers are completely unaware of the existence of the AALA labels. (2) Even those who are

aware of the labels hardly ever use the numerical parts-content scores for comparison shopping

among make-models; the information about engines and transmissions is also rarely used.

The following alternatives might be considered for enhancing the current impact of the AALA, or

at least redressing its present shortcomings and burdens:

(1) Expanded public information and education: Explore ways to disseminate the AALA

information more extensively to consumers. Conduct market research (e.g., focus groups)

to diagnose if any of these strategies are likely to increase consumer awareness or affect

their purchase decisions. Possible strategies could include placing the AALA information

on NHTSA's web site, with make-models in each vehicle class listed by percent USCan

content; brochures; and/or national media outreach.

(2) Leave the program unchanged: The program would continue to supply a modest

proportion of consumers with country-of-assembly information they find useful. If the

numerical USCan content scores have had any influence on manufacturers to date, that

influence could continue. However, it would be unreasonable to expect any large increase

in consumer awareness and use of the labels.

(3) Modify the AALA to require only country-of-assemblv information (or repeal AALAV

The evaluation indicates that country-of-assembly is currently the only information on the

AALA label widely used by consumers. That is unlikely to change in the absence of a

strong public information and education program. Congress may wish to delete the

numerical parts-content score and the information on the engine and transmission from the

AALA. That would basically eliminate the cost and record-keeping burden of the AALA.

Or, Congress could simply repeal the AALA since country-of-assembly information can be

obtained elsewhere. This alternative risks losing any impact the numerical score may be

having on manufacturers today, and any potential impact it could have if it were more

widely known to consumers.

159

REFERENCES

Code of Federal Regulations, Title 49. General Printing Office, Washington, 1998.

Complying with the Made In the USA Standard. Federal Trade Commission,

ww'w.ftc.govv'bcp/conlme/pubs/buspubs/madeusa.htm.

Congressional Record - Senate 138 (19 February 1992): 1710.

Congressional Record - Senate 13 8 (4 August 1992): 11415.

Evaluation Program Plan 1998-2002. NHTSA Report No. DOT HS 808 709, Washington,

1998.

Federal Register 58 (4 October 1993): 51735.

Federal Register 59 (21 July 1994): 37294.

Federal Register 64 (28 July 1999): 40777.

Government Performance and Results Act of 1993. Public Law 103-62, August 3, 1993.

International Trade Administration, U.S. Department of Commerce.

www, ita. doc, gov/auto/aala. html. November 17, 1999

Kahane, Charles J. Correlation ofNCAP Performance with Fatality Risk in Actual Head-On

Collisions. NHTSA Technical Report No. DOT HS 808 061, Washington, 1994.

. Relationships between Vehicle Size and Fatality Risk in Model Year 1985-93

Passenger Cars and Light Trucks. NHTSA Technical Report No. DOT HS 808 570,

Washington, 1997.

"Mission Impossible? AIADA Tackles 25% Truck Tariff." AIADA 's Showroom, Vol. 16, No. 5,

June/July 1999.

Motor Vehicle Statistics of Japan. Japan Automobile Manufacturers Association, Washington,

1984.

MVMA Motor Vehicle Facts & Figures '78. Motor Vehicle Manufacturers Association, Detroit,

1978.

Part 303 - Rules and Regulations under the Textile Fiber Products Identification Act (Footnote).

Arent Fox, www.webcom.com/%7Elewrose/trr/textile.html.

161
Report to President William Jefferson Clinton of the Interagency Enforcement Team Regarding

the U.S. -Japan Agreement on Autos and Auto Parts. U. S. Department of Commerce and the

Office of the U.S. Trade Representative, Washington, 1997.

Report to President William Jefferson Clinton of the Interagency Enforcement Team Regarding

the U. S. -Japan Agreement on Autos and Auto Parts. U. S. Department of Commerce and the

Office of the U.S. Trade Representative, Washington, 1998.

SAS/STAJ® User's Guide, Version 6, Fourth Edition, Volume 2. SAS Institute, Cary, NC, 1989.

Senie,A.L. Federal Laws on "MADE IN THE U.S.A." Labeling. U.S. Department of

Commerce, www, tradecompass. com/libraryv'legal/fedus. htm.

U.S. Industry & Trade Outlook '98. McGraw-Hill, New York, 1998.

U.S. Industry & Trade Outlook '99. McGraw-Hill, New York, 1999.

World Motor Vehicle Data, 1980 Edition. Motor Vehicle Manufacturers Association, Detroit,

1980.

162
APPENDIX A

U.S./CANADIAN CONTENT, REGISTRATION, PRICE AND ASSEMBLY DATA

FOR CARS AND LIGHT TRUCKS

MM2&CG

MMNAME

REGS94

PLOW94

ASUC94

USCAN95 =

8-digit numerical make-model code used in NHTSA evaluation reports

make-model name (abbreviated)

VIN-model-year 1994 registrations for this make-model, based on 1993-96

Polk new-vehicle registration files (REGS95 - REGS98 are similarly

defined) - or - manufacturer-supplied statistics on model-year production

for sale in the United States

lowest base retail (sticker) price of this make-model in model year 1994

(PLOW95 - PLOW98 are similarly defined)

percent of model year 94 vehicles of this make-model sold in the United

States that were assembled in the United States or Canada (ASUC95 -

ASUC98 are similarly defined)

percent U.S./Canadian parts content in model year 1995 for this makemodel, as shown on the AALA label and reported to NHTSA by the

manufacturer (USCAN96 - USCAN98 are similarly defined)

163
< CO 3 O CJ5 CO

r> co o < z o> co

Q- _i o 5 en eo

OC UJ O CO 05 CO

< co =3 o 05 rv

CO O < Z O5 |v

0- _I O S 05

C IU O (I) O)

< CO Z5 O OJ CO

3 eo o < z en CD

O- _J O S 05 CD

CC UJ U CO O) CO

< co => o O5 m

co o < z oi in

o- —i o S oi m

cc ui u co en m

< » 3 o o

0- —I O S OJ •»

CC UJ C3 CO 05

S S Z < S UJ

o

•

°

•

•

o

o

o

0017469 35743

rv

co16551 62967 ry LeBa 8 -C

h

eo616

5 100

co21855 46064 100

rv

co20985 50911

o

o

co9455 49896

o

o

Ol20550 51925

o

o 19896 69902 ry Cone

o

in

CO641 o100

rv

CO30850 36473

o

o

Si'.7300 38105 'L

o

o

o>25596 48964

o

o25541 97408 ry NewY

o

in

CO 642

» 100

eo17475 34668 100

CO17075 33046

o

o

o 6441 32349 1

o

o

o 15434 20529 •

o

ry Sebr

.c

o

CO

CM

in643 o 21110 50337

o

in20685 55749

o

o

m9460 47528 1 •

°

•

•

o

ry SeC

V

c

o

o

CM

in643

) 100

CO19995 37089 100

CO

rv18695 27827

o

o

m 7560 43399 1

o

o

co

|v17435 61552 •

o

ry Cirr

u

CO

eo644

) 100

oo64700 874 100

CD

en66700 1367

o

o

CD

en58600 1561 !

o

o

CD

Ol56000 1269

o

o54500 2046 dg Vipe

o

o

CM

CO713 o

•

°

•

•

o

•

•

°

CO

en9088 89227 dg Shad !0 D

o

CD717 o

•

o

•

•

o

CD

•<t

co14323 24587

CM13649 68328 dg Spir !2 D

o

CD719 eo

rv11600 129323

eo

00

s.11300 115256

co

o

co9495 131441

co

CO

CM

en9500 203120 •

o

dg Neon

E

rv

CO720 o

•

o

•

•

•

o

•

•

o

o 9319 5162 dg Colt

o

o

CO

CM

m734 o

•

o

o

m >4464 349 i

o

in23236 4380

o 21145 7890 dg Stea

o

o

CO

CM

in739

i 100

co20235 69376 100

co

co19995 150553

o

o

en

CO8445 144815 1

o

o

0117974 150233

o

o17690 1 127910 dg Intr

o

o

m

CO741

100

rv15720 26153 100

CO15155 32576

o

o

CM4040 38789 1

o

o

CM

rv13341 32965 •

o

dg Aven

o

o

CO

CM

in742

j 100

rv15375 105806 100

rv15525 96710

o

o

IV

N.4460 99242

o

o

CO13965 47588 •

•

o

dg Stra !6 D

o

CO743 o

*

o

•

•

•

o

•

•

o

eo

a9088 65473 ym Sund

o

CO917 o

•

o

•

•

•

o

CO

CM14323 23742

eo

•» 13649 71541 ym Accl

CM

CO919 CO

rv11600 86435

CM

oo

rv11300 82691

00

o

CO9495 103242

CM

co

CM

010096 173062 •

•

o

ym Neon

rv

CD920 o

•

o

•

•

o

•

•

o

o9319 3864 ym Colt

eo

CM

m934 o

o

•

o

•

•

o

o

o11542 5115 ym Lasr

CM

CM

m 937

) 100

co15210 66612 100

eo

co15360 66644

o

o

co4060 46556 1 •

•

o

•

°

ym Brez

CO

CO 938 o

•

o

•

•

o

o

o 13144 2519 ym Vist

I-I

CM

in944 o

•

o

o

m0600 05

co

o

m 9836 11491

o 9319 11432 gl Summ

CO

UJ

rv

CM

m1034 o

•

o

•

o

o

o

o11892 21192 gl Talo

CO

UJ

CM

CM

in1037

5 100

rv15040 4267 100

CD

m14594 9810

o

o

o

rv4059 11476 1

o

o

orv14460 34162

°

gl Talo

CO

UJ

OJ

CM

in1037 o100

co

co20855 5746

o

o

o

Ol9245 12723 1

o

o

Ol19697 24996

o

o19747 21960 gl Visi

CO

UJ

m

CO1041

) 100

Ol16675 169426 100

o

CO15880 99776

o

o

o

Ol5180 125386 1

o

o

o

O514530 162508

o

o 13365 122564 rd Must

o

co

CM1203 o100

o

0018395 73371

o

o

o

en7485 84606 1

o

o

o

en17400 114353

o

o 16930 120010 rd Thun

o

|v

CM1204 rv

co

rv11845 333571

co

co

o

0011430 323508

CM

in

m

CO0065 125057 1

CM

rv

o

CO9680 361603

CO

rv9135 283903 rd Esco

O

rv

y— 1213 o

-

o

•

•

o

•

o

o

o10885 142643 rd Temp

o

iCM1215

i 100

co21740 84334 100

o

CO22180 123136

o

o

m

CO'0955 107822 't

o

o

o

CO20160 64247

o

o19350 100487

o

•a

o

CO

CM1216 o

o

o

o

o

o

en17585 396375

o

o 16240 345840 rd Taur

o

m

CM1217

> 100

eo18995 332750 100

m

CO18545 398147

o

o

m

CO7995 393302 1

o

•

°

rd Taur

o

o

CM 1217 o 100

in

eo14755 16642

o

o

o

CD3930 29831 1

o

o

m

CD14180 57819

o

o13755 84902 rd Prob

O 1218 CO

en

|v14995 216130

o

en

m

IV13995 79764

CM

CO

o

CO3785 167287 1

CM

00

O

CO13310 177602 •

°

rd Ctur

o

en

CM1235 o

o

m 9530 37012

o

m 8790 30011

o

in8440 61733

o8240 37465 rd Aspi

o

CO

CM

j 100

eo38700 82457 100

o

CO37950 104419

o

o

o

O536910 90343 C

o

o

o

en36400 107009

o

o 34750 112324 nc ToCa

o

CM1301

164
< co :a o o> co

=> 00 O < Z 0) 00

0- _> O 5 O5 CO

o

o

o

O5

o

omCO

co

o

o

o

O5

o

oCO

CO

co

o

o

m

CO

in

03

CD

CM

CM

o

o o o o o

O 05 O O

o o

o o

o

o

o o

o o

O

O3

o

o

CM

in co o

IV. CO O)

p o

CO

o in

CM CM -

0)03 0

i- CO CO yy- y- CM CO

fv. CO

CO CO

in in

co co

CO To

co

in

in

N.

co

co co

co co

m o

03 CO

m co

y- CO

CM CO

o o o

o o

CD CO

CO CO

o o m

co co co

i- i- CO

Q co o

co •»• co

o o

o o

CM co

CO CO

o o

CO If)

If) T "

eo rv.

co *-

CO

o

CM

O O O O O O

o o o o o o

CO CM O CD O CO

CO CO If) CO CO CO

If) CO If) If) If)

rf CO 05 O) O

ro if) o •<? rs w co co ID

I IU 13 0) O) oocMOCMoeo^r- .

o co © m T

ij- co co in co in

co iv. y- m oi CM

y- CO 03

^roocoocoinoorv.coooco-' -

tj-i n in OC M coco*— *- CM

coco eo CON - IV.CMT - coi n

oiv . co 03 co rv. iv. iv. co

y- CM — CD O i- CM CM

CO

CM

>

CM

CO

IV.

CD

CM

ro

in co co -^ co o

CO i n CO CM CO in

^- «T »- CO N tO

CO T CO CO CM CO

T - CM

< B) D O U S o o

o o

o

o o

o

o

o

in o

co o

o

o

o

o

o o

o o

o o o

o o

OO

OO

CD

03

OOOOO O

OOOOO O

CO O < 2 O> O O O

co co co

o

co

if)

co

o ir> if) if)

CO fvi 0) O)

O T0> 03

O

05

* - CM

O5 O)

w CM n

O) 05

If) iC0 05

o

05

T- i- o i- o in

05 if) if) O) 0) O5

0. _l O S O5 Iv.

cc ui a co

o o o

If) If) •**•

O> O5 CO

iv. iv. eo

CO CO r05 CM 03

CM i- yco CM m

^ co co

o

o

co

CM

m

N.

CM

in

o

o

CM

CO

0)

CO

o m o o

CO O5 CM CO

m M- co co

i - • * CM O

• ^ 1 - CM CO

o co r**>

CO CM iv.

m co o

CD CM •>-

CM

in m

r- CM

r» ^

o co

co yin

05

in o

C5 CO

O CD

T- CM CO

co o

eo

O CM

co co

y- m

o o m

<o co co

CO CD CO

eo o o

co T co

o o

CD T

O P--

co co

co *-

o

co

in in o in in o

o> ^ CM oi en o

^ - CM 0 5 0 5 O> CM

s n co s m n

y- -r- T - T- CM

inoocooiv.coN-ooino50CMOincDcoinmo 5

CO *- CO 05 CM -r- iv. — — ^ ~> .« ^. »•» »»

co co co T— o 05 co

iv. *- ^ 03 pv. in co

m CM en i- co CM

co

CM

co

incDcommo )

O CO CO O CO CO

co in m co f*» co

CO CM T CM 05 i n

CO CD CO 1 ^ O5 CO

c\

CO

< CO 3 O 03 CD

C/3 O < Z 05 CD

o o o

o o o

m m o

O5 O) 05

O

O

o

o

in

co

•» r>- o o o o

•^ co o o o o

o o o

o o o

o o o o

o o o o

o in in CM m

CO O3 O5 05 05

CM CM

CO 0 5

in »- in in

O) 05 O3 O)

O O

O O

CM r*-

a> eo

o

o

CO

co

OOOOO O

05 O O O O O

o in in m o m

O) o) 05 Ln in o)

o

o

in

03

0. _1 O S 05 CD

O O O

in o co

co co f

05 *- r»-

co

m

05

y- CM

in

O)

o>

eo

m o o in o o

m co eo o co i -

h~ co co CM m o

i- • >- « in

y- y y- CCM C CMM C CMM CO

omi n ' m m m m -mm • o • o o in in o in -in

CM 03 V O)O5O3O ) OC M O5 O CD in Ct CO in O

fv.^-^ - O)O3inO ) O5CM 03 1O ^ P) ^ CO CM T

co in en in co en CM osiv. TT O CO CO CM CO N O

y y y CO CO CO ^ *— CO ^— y y y y y~ CM

CC HJ C3 CO O5 CD CMOOOeOONOSSOVNC M

CO f © Pv fv. fs^ QO CO CJ5 ^ CD

CM S h CO O •- i n O S CM CM

CO ^^ ffo ^& CO CO *^* ^^ CO ^~" ^^

<- CM CO 03 CM f ID Ifl f N iK CM CM

O) ID N

03

^ V O ID

CM CO 05 CO

N. co 05 co

o -^ co

y- m O CO

Of co

CM CD IV.

o o o

CO CM CO

O)l/)SNC\IOO N

in CD iv. en 05 iv. co

CO CO O) fv. CO CO CO

IV. O) CM CM CO O CO

co co CM iv. eo co in

CM » - CM

< co z) o en m o o o

o o o

o o

o o

O CO O O O O

CO O O O O

o o o

o o o

o o o o

o o o o

o o

o o

o

o

•<a- o o o o o

030000 0

o

o

o < o o ©

OS 03 05

o o

CO O3

in o m in CM co

N co co o) si en

m T- o

CO O5 O3

co m m co

O5O)O3O 3

CM O

0 3 O) O)

o *- o o in o

03 O) O5 m ^ 05

in

O)

a. _i o S o) m

o o ©

o m co

co i^ co

co o co

CO T -rr

CM CM

*- co

CM * -

omT r

o in CM

n eo s

•- n

cooi n -mo o

co o) oi *-i^.o >

CM n co n co

o in o in • o m _. _. _. O Ct CM CO *- CO

rv.cMco» - co i n co oi m CM c» eo s

© p*» ^* CD in ^ co ^ in co y~ o co

CM CM CM CM »- T- ^- CO CO CO ^ CMCO

in

O5

o in

cc a

o o i

o co in

0 in in o

ID s co s

1 CD o r^-

-- co co

co

o

CM

cc ui o w O) in oc »

coco©

a m o

ai CM o

coco

r

co CM

0 3 0

^incococ o

cooscococ o

TT^-CO^C COC O

co co co o ao a)

cc co co CD CM in

o^'inocM^-f-'-ocnooo s

0 in in co o) s co in o o

rv.m» - o * co v yf in co

01 CM en ineofi n in oi yomc o O*-CMC O m* - CM

o o •- 05 N- o ^r

CM O5 CM in CM CO

CM CM y- CO in CM

m >- * o s en

< CO 3 O O) OOOOO O

OOOOO O

o o o o o

o o o

05 O O

t>- o o

o o o o

o o o o

• © o

o o

o o

o o

o o o o

o o o o

o

o

0. _l O S 03

OOOOO O

m m co CM co v

O S CO ^ CO CO

CO CO CD ^" O S

CO CO f- T- CM rO O • O f ^>

en m co co co

'-CO O y- y~

CO O y- rv> f

y- *- CM CM CM

• O V t -OOO O

O CO CM 05 O) O) CO

eoh-co en en co -v

io n co CM ffl s T-

»-^^ - CO O CO V

co m

in co

y - CM

O5 CO

•*- co

O5 O

05 N.

TT 05

CO CO

m in o m

CO O iv. O)

m co o CM

CM m • - s

o

CM

I UJ O CO CJ « rOCOCVOCOOS S

co •- co co ^ n in co

S CD

tO CD

CM v

10 V N CO

O O ^* CO

in a o

CD _ .

co m

ocooc o

a co m

eo a s

o

oooc o m— . . coocococMinocoin o

mo ^ f rv o , .- — -

©coc o

co in s

mco

m co

co co

CM

r~.co

oco

COCM

ro co

O) co

•r- CO

y- CM

eo^» i

o r- co co

co m v CM

CO CM N CM

05 co o en

2 < 3

W ^ ^ k ^ W •** ^mt k^ VU IM VJ

>OOOC8Q(9L>> 0

oooooooooo o

CCC-C-C-CCC f ' —'

O-CCCCOOCOCCCCOU-liJCOOOOOOOOU-ICitC S

CO CO

S CO

T ^ T—i -W ^ H f^ f^ -*4 i^ ^ H ^ ^ ^ T£ ^ 3 CJ}CDQ)COC00)COQ5CI)CDC0C D *O

CQCQCOCOCOCQCQCOCDOOOOOOOOOOOOOOOOO O

o o

t o f ^omoNoiCMCMC n

cococoBNCo«o--coinini o

CMCMCMCMCMCMCMini-CMCOCOC O

Nininiosco«ioioocoinsv«coioincooincoi n

cocococococococococMcococoeococococoo5cocococ o

y~ y~ y y~ y~ y~ y— ^ v~ CO ^ ^ y~ y r* y~ ^ y ^ in ^ y ^

CMin^mcoNN^co N

OOO*-*-»--'-C0C0C 0

C0C0^^*'«t^ p ^

> ^^' ^

inNNe c

OO»-* -

C0CDC0C 0

oocofi n

CMCNO© O

C0C005050 3

cM^^cscotDCDocM^iosc M

*-OOOO*-''-"-CMC0C0C0C0 O

05OOOOOOOOOOOO-r -

'-CMCMCMCMIMCMCVNCVCVCVNC V

165
< 10 3 U HI O

CO O < Z O5 CO

o. _i o S en co

tr LLJ cs co o> co

< co z> o 05 rco o < z os

0- —I O S O5

•

o

o

o

05

O

O

mO5

o

o

o

co

m

CM

co

co

co

CM

m

o

o

§

o

in

co

ro

o

o

co

o

CO

CO

CO

coO5

CO

CM

o

o

o

O5

s

m

o

o

co

m

CM

coCO

CO

co

coCO

CM

O

o

o

O5

O

O

CD

CO

O

O

CD

CO

o

CM

O5

CM

05

O

o

CO

co

o

in

co

o>

o

m

^COo

o

in

05

O5

co

coCO

CM

o

o

CD

CO

O

in

CO

05

^_

CO

o

o

O)

O5

O5

CO

O5

CO

• m

O5

O5

CM

CD

05

CO

CO

• m

O5

• O

O5

• O5

min

CM

O

o

o

CO

m

05

coCO

co

in

O

O

o

o

05

O>

mCM

m

• oo

• co

CD

• in

eo

o>

o m

mCO

• o

o

05

• O5

CD

r-.

co

o

o

m

O5

m

co

o

CO

CO

CO

05

o

o

in

O)

m

05

05

O

O

m

*~

in

05

o

m

CO

o

o

o

o

m

o

o

*~

m

a>O5

CO

05

co

r>«• * ~

o

m

o

as

co

o

oy~

m

s.

CO

CO

CM

O

in

m

CM

CO

• o

• o

mCM

CM

o o

m

CO

mCM

• o

• o

coO5

O5

o

CM

o

orin

o

co

oO5

co

• • o

• m

• • o

in

CM

^-

CO

O O i05

co

co

• • o

• m

• • o

o

CO

CO

o

in

o

o

In

co

CM

05

r--

o

in

o

o

m

CO

• o

• m

•8CM

CM

o rco

coCO

• o

• m

• o

o

CO

CM

O

m

o

in

CO

05

co

o

in

o

o

m

o

in

o

CO

05

CM

1^

O

CD

CO

o

tn

o

CD

05

CM

• o

• in

• o

r*TCD

CO

o co

CD

CM

mCO

• o

* o

^-O)

CO

00

o • in • en

r~- 05 v

o 05 co

CO O) CO

CO CM TCO

o o o

o

CM CM O

o o in

CM S O)

V CM O)

••- CD 05

CO 1^- CO

CO

05

05

CM

CO

CO

CC UJ CS CO 05 f- oor-coacMOOcoooj T

r>-oin o oco r-co

osoo t in t o o

CM CO *T i n CO O TJ-O5

ini-Ti-cM r- co o o

1 - CM

CMN-OCOCOOCOOO O

»- O V CO T- O

co *j- co in •<»• •«•

CM T- y- CM a -r-

<f 0) 0) CM iy- CM

05CDOCOCOCOOC O

i - CO -^ CO CO CO

m i- co co y~ co

I-- y- CO CM O O

y~ m TJ9 i- •- O B

- O 7 CO

in N t in

r»« o co

i- CO

< CO 3 O 05 CD o o o

o o o

o o

o o

o o

o o

1^ O O

CO O O

o o o o

o o o co o o o

O

CO O < Z 05 CO m CM m

05 CO 05

CM m

O5 O)

m co

O5 CO

o CM in

O5 O) 05

m m m o

o T- -r- *-

m in CM CM O

O. _l O S O5 CD

tr uj (3 co 05 co

o m m

co m in

y- 05 •»

co co r--

m o

O5 CD

••a- co

CO •«•

— co

O5 T

co im co

y- m

•*• O> O )

O 05 CO

in •«• o

>- n s

COCMCMOCOCOOin ^

O CO CD CO O O5 t

O O) N *»• »- O TT

^- CO CO m CM O5 O

i- co r- eo CM CD co

in o o to

oj m in N.

^- CM f- 05

O T CO 05

O

05

mr»-coomcot~-ooinoo o

^•r^-c o 05^"0 o C D

1-CD0 5 <B TT X) •*- •*

tn tn CD CD co CM to co

O5 O N- S CO CM »—

CO CM

o

oCO

CM

CO

^.

coCO

CO

o

o

coCD

CO

co

CO

CM

• oo

mCO

CM

o in

CM

CM

m

• oCO

in

oCM

o •«•

o

. . .O o5

C\i

co

o o o co

in

05

in

8

CO

CM

in

O5

05

O)

CM

^

CO

o

• 05

in

CO

CO

O CD

l~~

T —

< ID D C O) I) o o o

o o o

o o

o o

o

o

CD O O

05 O O

o o o o

o

CO O o o

co u < z 05 in in in o

05 CO O5

*- CD

O5 O5

in ^~

O5 a> o *-

0> 05

m o o o

05 ^- •- ^~

o. _i o S os in

tr uj a co o in

in in in

co co co

m co co

co ^- rCM •r- icoinc o

D O N

o co co

^ r- co

co eo o

o m

o co

m o

co co

•- co

co in

o o

C O ••-

o in

CM *-

CO 1 -

y~ O

O5 m

SOU )

O ^ CO

^- CO CD

COTO CO

CO i—

T • *

m co co

CM im in o m

05 r- o N .

a « in a

05 CO CM O5

CU^CM "

05 O5 CO v—

05 O O O

O CO T- CO

og s N

CM

o

05

co

O

CM

CO

CO

co

in

CO

in

CM

o

o

co

o

co

CM

in

CD o a

m co

co co

• « • co

O CM O O

in

05

CM

^_

O

O

co

mCO

„CM.-

CO

• • o

o05

in

O O tco

s»

o

o05

05

CO

o

O)

*"

CD CO

CO

CO

< CO 3 O O5 O O O

O O O

O

O

o o o • o o

o o o o o •8 o o

a. —I O 5 o>

CC UJ O (0 O)

^ a f

CM 05 O

•*• o o>

O V 05

CM yy- in

in CM

CM CD

O O T y- t \r> o> *t

CO CM CO

05 m CM

S ^ 05

O •» CM

co m

m in

V CO

CM CO

CM ym o m

05 m CM

o> I*- co

O> CO CM

CM co m CM s m co en CM

CM CD CM

in •» iCM

o in

m N.

T- O

m co

CM CM

05

y- O

CO

o o

CM CM

co if- m

CM CO

CM CM

»- CD

O5 O)

CM m

mo • o • o -en

f~ o m o co

CO 05 O5 *- 05

>a- t m co co

CM co m co CM

o o o o o r» o o

!•-. CD

o in

CM O5

CM

CO

m

CD

S S Z < S UJ

o a

CO CO

o o

co ^- v

r~- co NJ CM CM

05

cocococococococococococococococ o

CM

C0N-OO<r-CMC0CM0>CDCDC D

O <- N CM CM CM CM ~ ~

CMCMCMCMCMCMCMCMCMCMCMCMCMC M

_ „ O O y- O

CMCMCMCMCMCOCMt O

^M CO ^0 CO ^^ CO ^^ C^ vTM CM € 0 ^ f ^^ ^^ ^^ ^^ ^^ CO O) CM ^M

. _ ooooowc\iwc\iwwwtt^^tvtin w

CMCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOCOC O

166
< CO 3 O 01 CO Iv. O f 05

m o 05 01

O O O

O o o o o o o

3 CO O < 2 Ol CO m m o m

« in s s

m

CO

o o o o o o

o. _i o S oi co

05

CO

O)

05 o

co co

Ol T

in

m in

t 05

O **

m

CM •>- i- T- iin

oi

co

co

CM

o o

CO CO

«• CO

in in

co m

o

co

co

o

co

o

co

oi

in

05

in

CM

o

o

o

CO O5

CM

in in in in in in

05 Ol Ol ^ Ol CD

CO ^ CM O CM tvCM O in f- O •»-

•<T CO CO CO "S- •«•

£E UJ (D CO O) CO OOCMO^-OIOCOOCOOOT'TO CM O

CO

co

o

co

'OSOC O

OOCMC O

co o co «

COT-COO 5

o in CD oi

i- ^ co co

rv. co

in ••-

CM co

in rin co

Ol

in

05

co T - -«r co co co

CD CD |v- O> CM in

05 y- co co m yi - CO CO 05 CM |v -

^ CO T -

< CO 3 O 05 I-. CO O N. CO

r>- o co 05

o o o oo

o o

o o o o o

3 co o < 2 oi m m o o

^ - Tf CD CD

in

co

in m

co o o o o

O. _l O S O5 Is-

O5

CO

05

a cc in in

CO T - •» 05

Ol CO Ol T

co o in

CM y- y- *- T -

in m

05 tv.

in ^-

co m

C M •> -

o o

co co

•s- co

in in

co in

o

co

co

o

co

§

05

Nco

m in

05 •«•

in yCM co

m in

^r N.

CD m

o oi

CM y29445

in in in in

Ol O) Ol ^"

^ T- CO O

O O CO yyf CO CO CO

in

^-

|v.

O

5T

111 O OOr~ -

S

OCMinoC O

S C0OF--0 5

co ini-i~- m

o i- a a CM

co m s CM s

i - i - y- CO CO

OCMOOOSOlOOCOOOinOOCO'fOOf'-OCO O

>» i - (DO ) CO in CMCO CM »- O

co N o co in T -r-in CMinc o

CD co co N- CM co o T- co co

T- m co »- Tcoa>ini-ot~ -

^ o oi CM co

CO O O O CO

ro Is- CD co in

Tl- i- CM

< CO 3 O 05 CD O O O O

o o o

o o o o o o

o

o o

o o o o o

CO O < 2 O5 CO in o o m in

CD

in in m io

co

o in

co

CM CM CM CM

0. _l O S 05 CO

II 111 O (I) Ol (D

O5

CO

O5

O5

O)

O

CM

CO O

co

in

CM

050500 0

05 ^ in o co

^- CO CO y- 05

y- m o in o)

|vco

co

IV.

CD

^r >a- o in s s

i- CO Tf

CM CO TO5 CM |vCM CO

o o

CO Is-

o in

in yr- CO

o

CM

CO

co

in

CO •p- O

O5 O

O5 CM

CM CO

oCM

CO

Ol

CO

in

• otcoOl

o co

01

o

CM

CD

CD

Iv.

co

m in

05 05

CO *

1- If)

o o in CM

05 O

0 O5

1 o

in o

05 in

in *

05 eo

in

05

O5

t- T- CM

o o in o o

in 05

co rr|v o - CO yo o o o

0 o o o

O5 CO |v- 05

01 CO CM Ol

CO h- CD CM

^- o co in o

CO T- CM CD

*- •«»• co *

co m CM co

y- y- CM

< co 3 o oi in

3 CO O < 2 05 in

a. j o £ oi in

cc UJ o co oi in

co

05

m

CO

Ol

co

05

05

O5

O)

o

Ol

co

co

m

o o in o

in o m

050100 0

O5 CO 0) •*• CD

CO CD CO O) N

O *»• O5 t 01

ocojc M

01 O Ol V (O

s o CM CD in

CM co m in co

CM CO CM y- i -

y- y- CO CO

o

in53400 4975

• O

• in53450 0998

O

in73350 411

o

m 62200

CO

05

CO

CO

• o

• o77250

o in

o

in

• o

• o

CM65000

O CD

in

CO

o

CM37500 440

• o

• *r12295

o o

co

CO

CO

100

in

CD14995 4857

• o

• CM35795

o xr

^r

Ol

CO

100

o

CD18895 7619

o

Iv.17795 9500

o

co14695 8247

o

• « • 27325 5517

o

CM41000

CM

in

co

o

• o

• CM78300

O 01

o

CM

CO

o

CM62700 5421

o

CM0960

G 1987

o o

if CO ~ CM CO

< W 3 O 05 O O • T- O T- CM O

O CO CO

o o o o o o

o

o o o o

o

a. _i o 5 O5

Ol O5

05 CM

CD M -

CO CM

CO CM

01

O5

Ol O O O

05 O CO O

O> rt y- yco o) Tf eo

O • O O O in in in o

O) fv. 01 TT

y- y- Ol Ol

in m co m

o

o

CM

co

N.

o in

O 05

m ^ •

to oi

co

in

05

o in o in

o CM o CM

CM O l O 05

CVJ N . I* . CO

CO y- y- yO

O

o

o

o o o

o o o

CM CD 05

in o oi

CO f - CM

I UJ 15 CO 0)

< S 111

o a

m

|vy yf in in

CD

IM -H

O X

o a

CO S

O iv.

<cf

in

CM

CM

K o m CM 0 0 y -

o o m •»- o m

• * co » -

CM CO

OOC0OVC001OCDOOCMCDO05OCM01C001OIV.OC0C0C0 O

m rv.^ m co CMCM O T CD O CO CO co^- m

m iv.co» - ^ CON . o CD co oi oi in » n m

tfjj ^^ c^ ^^ co co c^ o) ^^ o& *^r co i^^ ^TM fp

010 0 CM'^'-C M y- yC +J

O rH

U 01

H 10 *

to en cfl « <n «

y-l O O O O o c o

co

- ~ CM

CO CO r -

^ - 3 >

X X CO

"O "D CM CM

C C »- y- CC

5?

N. o O

OaOtaaDCSCSC S

cscsacscocBcooc i

CO CO O l

C- CM CM CM

OL CO CO 05

t^* w^m rM

« « «

CD CB CO r H

NNIIr v

cdescoa i

UJ Ul CO 10 O CO

N N N (VI rsl N

t-L.UL.UL .

i S S S Z

Ml) » •

CM CM CO CM

in in io in

o

m

n(ONO)n ^

CVICM^CMCM O

ssNSNO )

O«ninoino«Nntmo'cooi^*eMNOooi o

OOOOOOOCM-p-CMeMCMCMCM'-'-CMT-CM^'-CMCM O

oicDa)0)a>A9)cMcvcMC\icMci n

m co iv. T- ^

conoff 9

CMCMCMCMCMCMi n

167
< CO D O Ol

D co u <

0. _l O S 03 00

IC Ul (J CO Ol CO

o o o

mO3

mCD

CM

CM

O

m

o

coCM

03

CD

oCO

cn

co

m

CoO

o

o

o

cn

CO

co

C»

eo

o o

o o o o

T- in in in o

in «-

o co i- co o

O) CM CO 03 in co in » TCD CV O •- CO

1- y- CM CO *-

in co •>- N- o

CM CO CO CO CM

en CM co i-

•<- CM —

CM

in

in

co

in

co

r

o

o

o

o

CO

co

CM

co

t

o o

o

o m o o

ms o in

i n co t - CM

s <t co r

CM CO * - y

100

CM16160

o

CD28240

o

in28120

o o o

o

in o o

in

o> cn in

CM f^ CO

T •«• CD

CM 05 CD

in

CM

r

cooocomoToococo^oocn'Tcooc o

O> CDCMCO O CO CO CO CO in T <•

CD v co to o f ID in coin m CM

in O3CMO31 - in ^ CD T CM in

i»- co ^ CM •* m ^ co

< co Z3 o en r- o o o o

o

o o o o o o

o

co

co

o o o o

o y

o o

o

o o o

o

o o o

o

co o < z 0) r— O CM *- o o

in im o in

in o m co CM in

in -rm o in

m

a. _J o S cn

m in o

»- o c\

in en CM

TT in CM

CO CM CO

o

03

co

o o co co o co

CM 03 i- O) CM y

T- w » in O) >-

•— "<r CO h- 03 »-

CO *- y y CM y

co

co

co

co

co co in o

C D CM I1- CD

CD o co in

CO 9 V S

y CM CO CM

o o

"» 03

CO O

m o

o o o

in CM rCM m co

^r iv. co

y CM CM

cn o m -in

y 10 CO CM

co co in r«»

CM O3 CO V

T- y CO

E 111 (3 V) 0) S CO y CD O O

CM "9- T -

y CO CO

CD CM in

CM O>

CD O »- CM CM

mm

CM

 — — —

CO O CO CM O

CO CM CD CO CO

r- CM y 03

m

CM

co

co

CO

CO

cococoinoocMco o

y- N- O in 03 iy- Is

* CM CM l»- CM

CO CO 0> CM 03 CO

l»- y- f v in

©COCOCOOOOCMCD O

m m o o CM «

COCO

m m o

in CM CM

N CO O

OM

o CM

CM t o

CD *- O

CO

C D O

co

co

< CO 3 O 03 CD o

o

O O CO O O O 03 o o o o s o o o

o

o o

o

CO O < Z 03 CO O O

in yo m

•^- in

m o CM CM

CO

a- _i o S cn co

o m m • -i n •inincocooooc o • -ooooo o • • o o • -oo o

in O) Ol 03 O) O) CM in O T CD CO -r- CO O CM « S 03 ^

r*- cn co *c cn ^ N- cn co co ^ o *<r oi co cn ^ cnco m

CO CO »- CO O> CO CM ID CO O CO CO CO CO CD TJ- O •* O K

CD CM CO T- CM i- *- ••- CO »- *- t- CM CO CM y y *- CO CM

O)

cnin

c0n3

eCOn

o

o

CD

• O

oin

03

111 O CO 0! CO

CM T - CD CO CM00303CDCM0 3

O l CO CM O CO CM S • - CM CO T -

CDO3C O 03 COm O CMCM

* - N- y O y \T> •*•

CM CO

co o N r- coco mo © v eo n

IO O CO CD T 03 CD^tC D CMOC M

co in co O) *r * - o y? inojc o

co ^ m m n m ^

< co 3 o 03 in

CO O < 2 03

o

o

in

co

o o o

m m i n © m

•q- i- in

o o o r*» o

O y

m o

CO

co o

03

100

CM

o

m

o

m

• o

• m

o

m

100

in

o

m

o

in

o

o

a. _i o S 03 in

m r f

0) CO CO

Ol CO 0)

COCMC M

*• -000000000 3

co o m a CM o a CM

CO COCO'3-CMC O — - ^

TT (O i- CM S N O CD

C C O

co co co o m

CO 03 00 CO CO

o co cn co 03

V CO CM O V

CM i- CM CM CM

C33O) • • 03 O © • 03 O) O3 O O O

v o) in in in C003000 ©

CON. co t CM coincDi^t- o

yr a> y* m aa in i- eo m CD *-

y ••- CM CM T- T- r- CO CO

cc in o co a m

< CO 3 O 03

a. _i o S cn •<»•

CC 1U O CO O>

»- o •<)• o o

CO r- f

CD CO CO

t^ •<»• N .

CM

O © O O

o o m co cn

m oi cv to o)

03 cn N- m 03

03 y CO CO CO

CO CM CM y y

lDO)SS S

0DC0OO O

C0VCOCOC M

CMmmco» -

y- co

incooTCMO* -

CM m co o) « o co

•- in eg T <i co to

i- 0! CD in >• CM rCM O CM CO »-

CM CO

O O O CM o o o m

CD

030©COCOOQOC O

^•ooencoomc M

SONOffflOl*

SCO<-CM(SCDO< D

CM y y- y- CO •-

CO(0

CDOl

COCO

y CM 00

TN(0

CMOlT.

COCO^^CO^CDC ^CDCOO

cMCMcncMincof-r -

ococnc M

CM CO

O CO S O 03

o y m CM t

co y m m co

^ cn r*«. o

m CM co

o o

CO CO

CO CO

m ao

CM CM

CM »-

1IO

IO CM

CM

N. O

o

o

cnCM

CM

O

coCO

CM

CM

CO

CO

oCO 100

o

§CO

CO

Oi

CO

m

a

^CD~

O

O3

O)

CD

00

CO

CO

o

gCM

1^

o

Q

CO

100

03

03

O

CM

"*"

m

o

CM

co

CD

•

O

CO

03

o

o

CM

CO

N.

CO

m

oCO

o

o

m

mCM

CM

CO

CO

03

O

O3

co

*~

o

ao

in

CD

m

o

03

CO

CO

m• • "

m

CD f«-

co ^

CO

• cn

mCD

r»

O f

CM

co

CM

CM

O

o

CM

CO

y~

§CO

CM

CM

o

o

o

coCO

CO

CM

CD

CD

coCO

o

o

ion

CM

! • »

CD

03

o

o

m

co

CM

m

m

03

030014- '

>a)cs o

C_ O -H

a ' i

CSCSU'HHO E

£IO W

Z < Z UJ

o a

tnj3£ia!coa!aiaj «

c- as ro J3 xi J3 JD J3 n

O«C0=J3333 a

0-C0C0C0C0C0C0C0C 0

<o<ococa<nca<oto< o

!->>>>£33 S

3 a c

N M 3

3 3 O

(i) co <

3 3 3

o o o

< < <

SSC M incococococoeococoeowcoco^ ^

in <o s

COC0CO

i n CM « >- CM eo ^

•^ co co co co co co

168
< CO 13 O 03 CO o o o

o

ooooooooo o

o o o o o o

o

o

t o in o •8

D 10 O < 2 O) O o

rv

o in in ' - r- f CO fv CO

co co co co co

o

co

t o

iv 01

o

co

0. _l O S O3 CO

in in in

co co f

i- CD rv

*- «- CM

CO t CM

t

CO

03

coin

01

**_*

CO

o

• in

03

co

co

in

a>

co

Ol

CM

in

co

CM

inininminmootDi n

oioioi'S-cO'-tvivcoc o

o«invo!i»»o »

in

oi

oi

|v

m _.

CM co

•r- O

in rv

» - CM

m

oi

iv

incooo o

CMOC M

coco m

cM

eooocooinocooooio m

CO CO CO CO CM t 0 1

CM •» 8 N S C O ••-

co mi-coi 1- o o

»- coco co m

oin'-fincouicocnoo o

CMC003"-0001CDOCDC M D

CMCM

CM

nnoiwcuv o

Oinincorvo.co o

otfotco m

CO O CO CO O 0) O

in rv I- co

0 f» f~- CM

01 CM CO CO

co r~- -r- m

CM CO T- <-

< c/3 _- o en o o o

o

o o o o o

o

o o o o

o o o o o

o

oi

T

O

o

co o < z ai r- o o ommmcocoincorvi n

rv co co co co co

o

co

co

IV

o

CO

Q. _i o 3E oi rv

m in m

co co t

co t in

co -- CM

CM t CM

in o oi

r- 03 CO

in

03

co

co

in in

O3 03

03 CM

CO 03

CO CM

m

co

o

co

mininoinmooini n

OlO3O!CMCMO3rvCDinC 0

cot'-CMeoo-Ofcoc -

CO 0 3 CD

in co t

—L —i _•_# ^ms ^p ^ - - — r —. •_

O 1/3 CO CD rv O CO

* - -r- t - CM T - CM »-

i n m

co

tv

I UJ (3 B O) N t co m o o w

rv OD rv co

*- •— co o

^ CO t CO

CM * - t T -

OOOtCOOt O

oi CM in o

03 O

O CO

• « CO

CM

CM

rvcoooiocooincMinrvcnrvcooooiocoooc D

CM' - CO CMOirvCDCOinOOCO- - Ol Iv CO

CMCM CD COt'-CO'-COOirvCDO l i- CO t

o r v eo N in cMinincocO'-r v i - o .-

•--C M m ^- tcocMmiDCMC M oi t m

'-C M *- CM CO »-

< CO Z> CJ Ol CO O O o o o o o o o o o o o

o

o o o o

o o o o

o

o

CM

co

o

o

__ CO O < -- 01 CD o in in o in in in m oi CM co

03 CO

T 03

CO CO

CO

CO

in

CO

a. _J o 3 oi co

o o 0 o 01 O

rv 1-

CM "*

03

03

03

CO

oi m

a> co

co CM

o co

o • o o o o

CM O CM CM O

m e B • .

CO CO 03 cO CM

m CM co CM co

o o o m in

o o o oi t

03 t rv t rv

CM co m oi t

in t t ••—

co co co in

oi m co rv

o CM rv o

t co co rCM *- «- »-

co

co

co

CD

a_ uj _> co <_. co oioiooo'-000'-ocoorvrv'--inooo'-in' -

CMCO oi . o co '-cocM' - coomtr v

coco co o ID 03 . (. - s c-rvTrcor v

r v t 03 coco co minin o cMtcMCOi n

CO' - CM T '-CO t CM CMC O

o t rv t m o

03 •*- CD ^~

co ^- o •*-

o co o rv

CO CO CM 03

CM

CO O t O

rv o

CO »-

•<-• O

t CO

co co

o o o

CM

CO

< co Z3 o a> in o o o o o oooooooooo o

o o o o o o o

o »-

o co

o

o

o

o

tO O < 2 03 in o o m minmin^-oco-'-ococ n

CO Ol 03 Ol Ol Ol GO

0- _i o S oi in

o

o

01

|

oi m 03

oi oi oi

in oi CM

co oi o

oi

|o

a>

o

o

CM

in

in o

rv m

co m

CM co

CM co

o

o

m

ooomomcofivcD O

00001003'3-coincoc o

CMSCOOCIIOI'-CM^INT -

COCOCOCOTinOC D

in co

TJ- CO

o

co

o

CO

co

rv

CM

cc tii o co oi in o o o o CO i- •<S- O CO

CM tv 03 CM

W CM CD ^

CM CO »-

co m

O

in

O CO O CO CO

O CO 03

CM m oi

co rv oi

rvOOTTCMOOirvOOCOCOOIvOCMO l

o •vcOT-cMcoincooieoeM' — co o

CM ^-ivcoooicMineocoivi n ot

co T-mrvocvincMinivivc o TJ-CO

co oi' - cMCMocotnT-'-i - co

•>- » - CM '-C M CM

i

CO

cc

oo

CM

CM

< CO Z> O 03 o o

O

OOOOOOOOO O

o o o o o o o

O CD

O CO

o

o

o

o

0- _1 O S O3 «3-

O O3

03 O3

CM CM

rv co

a> en

01 03

i r

o

in

g

in o

iv m

O3 01

T- CO

CM CO

o

o

CM

co

o

o

CM

m

•§

o

o m rv o

_ O O3 CM C0

o o •<-• t t

o »- co co .-

CD T- *-

in iO n 03

T- CM

CM To o •-_•>. •

O CM i- CO

co m o rv

03 m m CM

o

CM

in

in

3

rv

CM

cc UJ o co ex oooiveoorvc o ooorvocMeoooor v

motr v omocMi o

CMOCOT - eocoincMC M

inCMCMT - IV03--CO O

in •>- t T - CM co CM

OCDCOCDCOCOCMCOflvcO O

eorvCMO^-ivcocMino i

mcM'-rvcotosoocMC D

•^i-'-COCMCOCOOr v

* - CM « - CM

inTr

COTcot

coco

(v

CO

IV

CM

co

CM

CM

CO

CM

en

co

CO

z < z

O O

r-ICO-J_}CCV_ J

occoc_-oo__in_.oo o

__J _—I -J X O O O r~t ^H C_> *W ^" ^ CM CO CO CO

H~ CC O IU 03 CO CO ^ UJ ^C ^~ CJ O (__) ^ ^^ UJ

O CO CO I > CL O)C0C 0

c_

13727

in

CO

_.

o3728

CO

CO

c.

13726

rv

CO

c

X 5502

3

c

>

X 5501

S

ccc c

333 3

X

CD

333 3

xxx x

s

cMCO

O O

tnin

CO CO CO

-nioioinm-O-n m

ooneowocowoMoweoooi-i-ooOT-t-i-T-c .

ioiflinif)inir)_,<3)0)fl)CDfl)a)-OOOi-'"i-i-»-T-T-T- f

COCO-OBCOWCOWC l.WWC.BCOOr'i---^CO^^^^t D

intOlOlAlOtAiniCU-iniOIOiniDNiSNNNNNSNS N

169
< 03 13 O 01 CO o

o

co

CD

o o

o o

o o o o o o o

o o o o o o o

o o o

o o o en o

CD ^~

o o o

o o o

o o m co

o o 01 co

o o

o o

o

o

Z3 CO O < 2 05 CO i- • in

co o>

o o o o

CO 01 CO 05

o o o o o

CD O) O5 Ol O5

0 o o

01 05 •*

<o m in o o o

CO CO h- 05 05 05

o o co in

05 05 CO CO

in o

|v 05

Q- - I O £ 05 CO

o

CO

CM

IV

CM

minmoinoincoeoi n ©eooioscDcoinorvc M

<romsogonin<-o >

ooi'-cocO'-rvcMCMO i

(MCMNWCX I

s in in

csiinos

'-coo s

o m co

CM i - * -

O O O> CM -r- 05

<J- CM CO CM O CO

m n s m n a

*r co o CM CM o>

CM CM CM •>- CM » -

• - CM 0 1 V

O) co in o)

i - s in CM

o in o co

CM * - CO CM

m o

co co

CO CM

CyiOOOOOtDCOWtDintNOtDCOO'-eOC J

IO I*- tOOCMOOCO^-^ON . OJTOi-

^ O> <DP l h »lO i^"CM*-^"'^"CD ^ CO CN lO

CCM^ flj ^f C^ iO P^ P^ P^ *"*^ p^ f' 7 CD *** O5 ^^

CO

05

05 vnon n

<» T - CM C5 CM

CM CM

CO -^- CM

in

O CO y- CM CO in CM

o in in < <• r

O 01 CO Ol O5 '-

CM T- T- CO 00 O

rv to oi in r— co

CD rv ,- in

CM CO CO CD

rv m CM oi

Ol O CM CO

CM CD CM CM

o CM co o in

CO CM CO

in o co

in ••— ^

co co in

< co 3 o 05 rv o

o

co

05

O

O

ooooooooo o

ooooooooo o

o o o

o o o

O I*.

05 «•

o o o o

o o o o

o o co 05

O O 05 ^

o o

o o

o

o

3 IS O < 2 0) S CM

CO

o

05

moooinooO'-i n

NOltOOlCOtDOlOlOlO l

m CM o

05 05 t

o m in o »- in

O) O) Ol Ol Ol CQ

in o o in

OS 05 05 05

i n •>-

O) Ol

in

O)

a. _i o S 05 r«-

o

co

CM

rCM

m oooi n omcOT-o s

o e i

<Dt-B1Sr O

oiBosiM' -

rv rv m

eoin m

CO i - rv

o> in n

N n m s v co

•* CM Ol CM IO O

^ () » ^ T- N

• « • m o CM •r- a>

CM CM CM T - CM i -

in CM »- co

S CM CM CO

05 in TT in

T - •>- CM CM

ITS O

•q- o

CM 05

CM O

CM CO

I 111 O 8) Ol CM

O

m

co

rO O O CD

CO CD

i

co

o

co

in

ococoinoi-cocMOcov o

TincocorvcMOi'-oc D

oe\i»m^in»-V'-t o

CMO00O'-'-ai'-0 5

05 05 in _.__ —

CO »- CM

o • *

O CM

. . . _. rv o

, co 05 co rv

©*•«•' - CM

co ^r •»— co co oi

*- O>

co

co

05

co

co o o

v o it) -

rv jv iv co

rv co co o

CM co co •»

o oi co o

O CM

CO CO

o rv

OO CM

< CO Z> O O) CO o o

o o

o o

o o

o o o o

o o o o o

o

o o o

o o o

o o o o o o

O O O O CO CO

o o o

o o o o o 05 in o

O O CO CD O

o o

o o

CO O < 2 05 CO 05 O

CO 05

in in

05 CO

in m m

h- 05 CO

CM T- tO

05 05 05

m in o in m m

oi ai ^ oi en oi

CM 1 - in

O5 05 05

in in in in in

oi oi oi o) en

«- in

o) 05

0. _1 O S 05 CD

o o

o mCD TCM *-

o in

i- CM

CO t>-

CM CD

CM •>-

in

CM

•<»•

o

» CM

 a

in

co

co

O5

05 CD O O CD 1^.

co *- N- r». co CM

CO O O> CO CO O

oo a CM r» CM v

CM CM

O O

oo ••ao co in -oicocorv m •m^ -

oiiv o ocococMt n o a

CM in t ivocooc o mc o

'-OIC O CO^-CM'3-'- - 05O 1

y~ y- y- T-'-CMCMC M CM I -

£C UJ O CO 0 5 CD

^ c o

in o

TN

T CD

cool

coin

flfN O

O05OC D

N r o

o

CM

Nrc o

n r CM

Tf o co

M

CO

co

N .

in

CO ID O

*T GD *-

co co CM

o in co

CMC M

NOCl l

CO CO 0 O) <f

fro o

frao o

in co co o> co

CM in CM 01 s

COCOOOI — oi in co »- oinco o

co o> in s T- in I D o coco

'-co o comcoco o <-c\i

o CM co co-i-aiinc o CMCD

in co CM T- ^ CM co '-• ^

< co 3 o oi in o

o

o o o

o o o

o o o

o o o

o

o

o o o o

o o o o

O O O 00 CM

O O O CO 05

o

o o

o

O (0 » O

O CO 05 O

o

o

co o < z 05 m o

Ol

m m o

Ol 00 GO

o o m

05 CO O5

o

N.

in m m in

05 O5 Ol Ol

o CM in m

^* 05 01 Ol

in in in m

O5 Ol Ol 05

in in in CM

05 Ol 05 05

CM

ai

a. _i o & oi m

f

co

CM

co

in in in

co CM co

CD N 01

-^ co co

CM'-' -

^ i n

cM' T

CMI-- O

ai

o o

CM s o

intCOCtt

ooor-c o

o in co -r>-oinor v

s co o COCMCOCOO O

tOCt t T01CMOC 0

c o o

O O l CM CO

f O) O N

in in co oi

o co iv co

|v o |v o

o o in co

in »- 05 co

co CM *- o

t - CM CM CM

05

CO

CO

rv

cr UJ C3 co oi m oooinin'-ON.intvocoococoooc o

CO O S N tlvO l CM i - CO CO T -

•<r s C M C M o«-o o C D rvcooc o

co cooio i mrv' - f^ TOCOC M

co cooi n O»-C M co i-CMin i

CD '-C M CM CM CO CMCM'-' -

oocootncoinrv^j -

CD in o o TT

T CM tv CM CM

tv ,- CO CM CO

co in in co oi

m

coTrcMOOcomocoooco o

cooicoc o in-'-ivr v ^

O O ' - CO CM CM CO

05 o o in rv CM

* O

Ol -^- im tv m

o o n i

co co co i-

< CO 3 O 05 o

o

o

o

o

o

o

o

o

o

o

o

o o

o o

• o o o o o

o o o o o

o o o o

o o o o o o o o

o o o o

o o

o o

Q. —I O S 05 co

CM

m o o

<V ID S

tv *- -t

1- in tv

CM *- iC0 05

eo *

CO 05

in

fv

co

CD

m *- in in

m co cw o

CO 05 in 05

05 co co in

•«• m m o co

m i- oo co o

CO O CO CO t

CM T - in <- o

•— r- *- CM CM

CD CM » - CD

O T CD O

CO 00 CO O

05 m in CD

CM

co in

iv CD

T T 1 CD

CM •*- O O5

T - CM CM *-

O C l

CM CO

co ^-

• « • | v

CM TCC UJ O 10 Ol <t mmco

05

m

ocncocoorr'-oofvoeotooTOcocDi n

^f CO CO COC O O CO in O CO O1050_ .

CM 05 O O CO O O05tv* r CO in CO CO CM

CCMM

 C CMM CM COC O •* ^•COCM' ^ CO S N CO CO

co co

co co oi

CM CM

O CO

CM05 V

co co co o

CMOCOC M

cooi^o i

v in co o

CM i- yCM Ol

CM CO CO CO

T- co co co

T Ol CO •*

Ol CO yCM in

CD CO

rv v

r- CO

• 8 CO CO

I - tl_ U_ £0

o o o

OU-U-U -

O H H C co.aL. o

CBXXO

<ujujuj

O

a.iH

X-H

CSCC C

c0-c04-'aj« o

S»C0<C3C3O O

oo

oooooooa>a>J=J=x:j=-cjrj=j=j=j=j=sszss s

U.U-U.U.U.U.U.SSOOOOOOOOOOOOC3C3CJOC 3

0>CM^5"fV'-TOinCD05COCOOC O

'-OCMO'-'-CM'-'-'-CM'-CM' -

<-V««««««4«««VC 0

inCM05CO^'OCO^'0001COincO^"050'-0 5

'-O'-CMCMCO'-OOOCM'-CMCM-'-COCM' -

ONC0IDOC0C0C0C0C0(0C0<0C0(0C0C0( D

CMCOeOtvOlCMCMI-CMCDCD'-CO' - C0»-C0CMCMCOO!'-C»CDC0CO'-CMC O

^D CO CO ^C^ CO CO CO ^^ ^^ ^^ ^^ ^^ ^^* ^^ ^^

T- W T- ^

00 00 CO Oi O)

h^ r^. t"^ r**' p*^

170
< CO =3 O O5 CO

z> co o < z 0) co

Q. J O 5 0) CO

CC LLJ U CO O5 CO

< CO Z3 O O5 IS.

3 in o < z 01 s

o

o

o o

o

m o

oco

CM

rv

CD

co

o

o

o

• " •

en

co

* > •

• O5

co

CM

O

CO

• o

• m

• 05

CD

CO

CO

CM

ecno

in

co

CM

05

CM

O

O

O

CO

05

T —

CM

o

o

o

f

co

en

CO

o o o o o

o o

in

in

©

1-

o »-

CO CD CO t -

t - CM CM - -

incoc o

m oi s (O CM

en co in •»- «a-

<• r>- ••- O5 V

CO •» - i--.-

o

o

in

co

o o o o

o

m m o CM

05

asm s

oi • - N m

co •«• T- co

CM CM - ^ CM

o o o

o o

o

CO

in o co

en en m

co i - en

~- en CM

o o

CM

CM

o

o

M

CO

in

O

P

o

o

o

CO

en

o CM

co

m

8 • cooooooooo o

CO O

m in o

t- CO

, - • oinininmcooooi n

•r- in ••-

in

CM

in

• O5O5inininmininini n

ineoONNcos^io o

cococovcoincointnc o

co co • co co ©

h~ o *- IO CD rv.

o co co co rv •*

,- ••- in m © co

cv » *- *- CM -rinvocoomocooocnf^-ococococoinc o

coco cno m 05 rv m r^ in co c\j in i rv ,—

o 05 *- co o CM

oco o CM «t

CM i - CD r--

05 ^ co

>

^ - CM ^ - 0 5 CM

. - IV. .

CM r» O5

o o o o o

o in o in o

CO CO CO ^0 GO

O O O5 O5 CO

T CD CM O in

o *- m m in

CM *» • C M »- >-

cooooooooo o

co o

in in o in o m m in o in

m -cncninininoininini n

co o><-coinoicMcooicM ^

CC UJ C3 CO 05

CD

CM

o o

co in

O

CM

in

N. en o co

O5 in m CM

N- ^- t- co

ooco

N. m

in co

O5 CO

CM O

rvco m

CO1-CD05 0

(D in V 0) •-

CM-^ CMCqoinoococ>irincor N

to N-cococococoomiON -

co COOCO^-COCOOCOCDC O

CO 05CM'<-'--'-CO--COCOC O

CM * - CM CO N W CMt -

< co r> o 05 co o

o

o o o o

o o

o

o

o

o o o o o is. o o o

m o o o o o

CO O < 2 O) CO o

co

in m CM •>-

O5

in

co o o in o in

CM

o i n

CM

in in tn o

Q. _l O S 05 CO

05

05

05

O

O5 05

05 05

CO CO

CM O

CM CM

O

CO

o m 05 in

CD 05 05 CO

CO <t O 9

in co o iCM CM •>- CM

in

CM

05

O5

CO

CM

o

CM

CO GO CO CO

co in •»-

» N n

O5 O TT t ^

<- f IV •- ^~

oi

o o

05 r^

in Tjf CO

•^ CM

05 O) O O

05 O5 O) CO

co ^* 05 in

C M co r^- co

^- T- ^- CM

o o o o

o o o in

o en in en

^ CO (v. C7)

••- C O -^ C M

CC OJ C3 CO 05 CO 5

co

m

co

co

co

»cM^c M

ino5coc o

o o> s »

s T- (v rt

i

co

3cDTa 5

co r in n o

cococomc o

m w s s o

CD-^-CO^I -

c o o

r>-tr

T O S

CD

tcoc o

CM o co

CD

ncMn o

O5COCMO 5

in o - t

on

< co o o as m o o

o

o o

o

o

o

o

o

o o

co

o o o in

o o

o

co o < z 05 in o o

co

in

co

o

co

in in

CM o CM o m

i- CM

in in

co

a. —J o S 05 m

O5 O5

O5 i -

O) O

05 •^-

CM

05 05

CO 05

CO 05

a> 05

3

CO

in

o

in

CM

CM

m

O5

r

CM

o

co m

o •<-

»- CM

co co co

co co co

H N S

CO CM CO

CO CM T -

05 in 05 en

in CM co 05

co co co co

o s a --

* - CM » -

o in

co •rC0 CM

CD CO

•*- CM

m

O5

o

m

co

CO

CM

cc iu o co 05 in

COCOOincOOOCMO*-OOCOOCnOCDCM O

CD N CMCO ^ O O CO ^- O ^"^- V

OO COOS •<- t 05 V Om COCOO5

^ - o co m v CM m r-. vcocoo f

IVOCOT - COC M ^-CMCM0 5 CMCO

inootoo T corvcoococoo^-oocn o

•>- CO V 0 5 CM r - CM N .

^ CM n t CMCO ^r co

en co co CD T- O O

CM CM CO CO ^ - CM

< C/5 Z3 O 05

D. _l O S 05 "ff

CC IU O CO O) XT

100 9459 20910

o19669 51532

100 19079

O "9 "

i n

|

CO

CM9399 23062

o14999 7104

100 15089

°s

inm

o

in

* - » - 1 - V- CM

o18500

100 18225100 9460

• CO10118

o20308

• o35298

o22818o12998

O O O CD

m

en in o> en

t - CM CO V

in CM co v

en 't" en *-

CM t -

o

o

o

CD

co

m

s

ocooo»-co^oi n

o v CM * v

co co in co m ,

O CO CO © N. 05

CO CM O CO CO

* - CM

oinco-r-oocn-^oosoo o

cove n in oi s in

COCO-^CMM * • CB n

in CD co

s in r

CB n »•

o

o

05

(

o o o o m o

©

CM

CM

CM

3E Z < S 111

a> cs s> a> o

COCOCOtONINNNNNNNTJ'O'aC O

C0C0C0C032332233NNN £

•H -H •H-WCOC0COCOCOCOC0COCdCded 3

CCZT3>OV C

33CCUO>0 )

CCCCSC <

C E "H O

co to c_ in cc

» >,> o x » c »

cQa.2<ocoxa.oococo-i-j o

= CC -H

X C >ta> co c

3aO O

N C C C <

300 0

O (9

i-CMCMr-O'-T-CMK- N

OOOOOOO O

iscocoNcgooocooissosscocooacocooococoocococ Q

S Z CM OMC0OOOOOOOOO O

'-••-•'-•T-cMCNCMCMCMCMCMCMcococovinininininininincocoi'^N-r-.cncocno-'-cMc o

cococococooocococococoooaococococ o co cococococococoaococococococoo505050 5

171
oo

o o

=> co o < z a> co o o

05 to

J O S Ol CO

UJ is co oi co

oi n

o>

en

co

CM

i n

CO

m

m

in

CO

en

CO

co

ID U < Z

DC 111 O CO Ol'N O O

< co 3 o en co

CO O < Z O> CD

a. _i o S a> co

CC UJ U CO CD (D OO

< co o o en m

co o < z a in

a. _i o S a in

< co z> o 0) •«•

a. _i o 5 03

0) Ol 7 OO

o> o

> CM

cd co

U N

CO iO CS CM O

TT CD

1^- O>

CM O O

in CD

O) 05

172
APPENDIX B: LISTING OF THE DATA FILE FOR THE REGRESSION ANALYSES

MMG = make-model group

NAMEPLT = nameplate: Big 3, transplant or import

VEH TYP = vehicle type: passenger car, pickup truck, van or SUV

CURR_YR = current model year: 1995, 1996, 1997 or 1998

SALES_CY = "model year" sales for this make-model group in the current model year (all vehicles sold

between October 1 of the preceding year and September 30 of this year, regardless of

their production-model-year)

SALES_PY = sales for this make-model group in the model year immediately preceding the current

model year

SALES_2Y = SALES_CY + SALES_PY (regression case-weight factor)

D_SALES = log(SALES_CY / SALES_PY), the dependent variable (sales growth from the preceding

to the current model year)

PRICECY = average of the base retail (sticker) prices of the make-models in this make-model group, in

the current model year

PRICE_PY = average of the base retail (sticker) prices of the make-models in this make-model group, in

the model year preceding the current model year

D_PRICE = log(PRICE_CY / PRICE_PY), price growth from the preceding to the current model year

USCANCY = average % U.S./Canadian parts content of the make-models in this make-model group, as

reported on the AALA labels, in the current model year

USCAN_PY = average % U.S./Canadian parts content of the make-models in this make-model group, as

reported on the AALA labels, in the model year preceding the current model year

(unknown if CURR_YR = 1995, since there were no AALA labels in 1994)

D_USCAN = .01[USCAN_CY-USCAN_PY] if CURR_YR= 1996, 1997 or 1998

= .01 [USCAN_CY - 90.09] for Big 3 vehicles if CURR_YR = 1995

= .01 [USCAN_CY - 48.39] for transplants if CURR_YR = 1995

= .01 [USCAN_CY - 4.69] for imports if CURR_YR= 1995

= growth in U.S./Canadian parts content from the preceding to the current model year - or,

in 1995, deviation of actual parts content from the average for a vehicle of this type

173
M

M

G

CHRYSLER LeBARON

CONCORDE/LHS

CONCORDE/LHS

CONCORDE/LHS

CONCORDE/LHS

SEBRING/AVENGER

SEBRING/AVENGER

SEBRING/AVENGER

SEBRING CONVERTIBLE

SEBRING CONVERTIBLE

CIRRUS/STRATUS/BREEZE

CIRRUS/STRATUS/BREEZE

CIRRUS/STRATUS/BREEZE

SPIRIT/ACCLAIM

NEON

NEON

NEON

INTREPID/VISION

INTREPID/VISION

INTREPID/VISION .

INTREPID/VISION

MUSTANG

MUSTANG

MUSTANG

MUSTANG

T-BIRD/COUGAR

T-BIRD/COUGAR

T-BIRD/COUGAR

ESCORT/TRACER

ESCORT/TRACER

ESCORT/TRACER

ESCORT/TRACER

CROWN VIC/GR MARQUIS

CROWN VIC/GR MARQUIS

CROWN VIC/GR MARQUIS

CROWN VIC/GR MARQUIS

N

A

M

E

P

L

T

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1995

1995

1996

1997

1998

1996

1997

1998

1997

1998

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1995

1996

1997

1998

1995

1996

1997

1998

C

H

G

M

0

D

L

LAST YR IT EXIST

NO CHANGE

NO CHANGE

NO CHANGE

ONE NAME DROPPED

2ND YR IT EXIST

NO CHANGE

NO CHANGE

2ND YR IT EXIST

NO CHANGE

ADDL NAME INTROD

NO CHANGE

NO CHANGE

LAST YR IT EXIST

2ND YR IT EXIST

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

ONE NAME DROPPED

2ND YR AFT REDES

NO CHANGE

NO CHANGE

NO CHANGE

COMPETITOR INTRO

NO CHANGE

LAST YR IT EXIST

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

S

A

L

E

S

C

Y

34792

105741

89154

83672

52261

68872

65520

60428

55594

51286

187143

192501

221703

43711

248226

201092

210792

173974

158443

143566

88679

138867

129718

112311

136488

175276

121347

107558

359138

342996

326187

331673

189259

204406

216291

222260

S

A

L

E

S

P

Y

38416

137106

105741

89154

83672

51198

68872

65520

45395

55594

115542

187143

192501

133656

239153

248226

201092

147235

173974

158443

143566

147744

138867

129718

112311

211845

175276

121347

380211

359138

342996

326187

197113

189259

204406

216291

S

A

L

E

S

2

Y

73208

242847

194895

172826

135933

120070

134392

125948

100989

106880

302685

379644

414204

177367

487379

449318

411884

321209

332417

302009

232245

286611

268585

242029

248799

387121

296623

228905

739349

702134

669183

657860

386372

393665

420697

438551

D

S

A

L

E

S

-0.099

-0.260

-0.171

-0.063

-0.471

0.297

-0.050

-0.081

0.203

-0.081

0.482

0.028

0.141

-1 .118

0.037

-0.211

0.047

0.167

-0.094

-0.099

-0.482

-0.062

-0.068

-0.144

0.195

-0.189

-0.368

-0.121

-0.057

-0.046

-0.050

0.017

-0.041

0.077

0.057

0.027

P

R

I

C

E

C

Y

17469

23043

22739

25326

21855

15157

16147

16732

20685

21110

15030

15935

16156

14323

9495

11300

11600

18238

18515

20033

20235

14530

15180

15880

16675

17214

17468

18378

9952

10312

11448

11853

20704

21445

22632

22228

P

R

I

C

E

P

Y

16551

22939

23043

22739

25326

14086

15157

16147

19460

20685

15840

15030

15935

13649

9500

9495

11300

17985

18238

18515

20033

13365

14530

15180

15880

16714

17214

17468

9306

9952

10312

11448

19815

20704

21445

22632

D

P

R

I

C

E

0.054

0.005

-0.013

0.108

-0.147

0.073

0.063

0.036

0.061

0.020

-0.053

0.059

0.014

0.048

-0.001

0.174

0.026

0.014

0.015

0.079

0.010

0.084

0.044

0.045

0.049

0.029

0.015

0.051

0.067

0.035

0.105

0.035

0.044

0.035

0.054

-0.018

U

S

C

A

N

C

Y

84.0

94.0

90.3

87.0

85.0

71.1

61 .0

69.3

45.0

40.0

79.2

78.5

76.4

76.0

80.0

75.7

71.0

94.0

89.1

88.0

86.0

90.0

90.0

80.0

90.0

90.0

90.0

80.0

79.2

83.5

80.0

71 .1

80.0

85.0

80.0

85.0

94

90

87

71

71

61

50

45

80

79

78

92

80

75

94

89

88

90

90

80

90

90

79

83

80

80

85

80

U

S

C

A

N

P

Y

.

.0

.3

.0

.3

.1

.0

.0

.0

.8

.2

.5

.

.0

.0

.7

.

.0

.1

.0

,

.0

.0

.0

.0

.0

.

.2

.5

.0

.0

.0

.0

D

U

S

C

A

N

-0.061

0.039

-0.037

-0.033

-0.020

-0.002

-0.101

0.083

-0.050

-0.050

-0.016

-0.006

-0.021

-0.141

-0.120

-0.043

-0.047

0.039

-0.049

-0.011

-0.020

-0.001

0.000

-0.100

0.100

-0.001

0.000

-0.100

-0.109

0.043

-0.035

-0.089

-0.101

0.050

-0.050

0.050
M

M

G

TAURUS/SABLE

TAURUS/SABLE

TAURUS/SABLE

TAURUS/SABLE

FORD PROBE

FORD PROBE

CONTOUR/MYSTIQUE

CONTOUR/MYSTIQUE

CONTOUR/MYSTIQUE

FORD ASPIRE

FORD ASPIRE

LINCOLN TOWN CAR

LINCOLN TOWN CAR

LINCOLN TOWN CAR

LINCOLN TOWN CAR

LINCOLN CONTINENTAL

LINCOLN CONTINENTAL

LINCOLN CONTINENTAL

LINCOLN CONTINENTAL

LeSABRE/88/BONNEVILLE

LeSABRE/88/BONNEVILLE

LeSABRE/88/BONNEVILLE

LeSABRE/88/BONNEVILLE

PARK AVE/98

PARK AVE/98

PARK AVE/98

PARK AVE/98

CAPRICE/ROADMASTER

CAPRICE/ROAOMASTER

BUICK CENTURY

BUICK CENTURY

BUICK CENTURY

BUICK CENTURY

GRAND AM/SKYLARK/ACHIEVA

GRAND AM/SKYLARK/ACHIEVA

GRAND AM/SKYLARK/ACHIEVA

N

A

M

E

P

L

T

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG.

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1995

1996

1997

1998

1996

1997

1996

1997

1998

1996

1997

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1995

1996

1997

1998

1995

1996

1997

C

H

G

M

0

D

L

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

LAST YR IT

2ND YR IT

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR IT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

NO CHANGE

LAST YR IT

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

REDES

NAME

REDES

EXIST

EXIST

EXIST

REDES

NAME

EXIST

REDES

NAME

REDES

S

A

L

E

S

C

Y

503503

495076

477469

481823

35457

20922

242645

196883

184103

40849

34922

103045

88451

94565

98346

40337

36054

27702

35748

286857

275640

290750

263611

74403

61354

65046

60330

106396

72358

98421

87322

71107

122655

341077

307269

335576

S

A

L

E

S

P

Y

491889

503503

495076

477469

63513

35457

209436

242645

196883

60212

40849

118300

103045

88451

94565

29333

40337

36054

27702

324363

286857

275640

290750

89955

74403

61354

65046

131305

106396

138634

98421

87322

71107

363540

341077

307269

S

A

L

E

S

2

Y

995392

998579

972545

959292

98970

56379

452081

439528

380986

101061

75771

221345

191496

183016

192911

69670

76391

63756

63450

611220

562497

566390

554361

164358

135757

126400

125376

237701

178754

237055

185743

158429

193762

704617

648346

642845

D

S

A

L

E

S

0.023

-0.017

-0.036

0.009

-0.583

-0.528

0.147

-0.209

-0.067

-0.388

-0.157

-0.138

-0.153

0.067

0.039

0.319

-0.112

-0.264

0.255

-0.123

-0.040

0.053

-0.098

-0.190

-0.193

0.058

-0.075

-0.210

-0.386

-0.343

-0.120

-0.205

0.545

-0.064

-0.104

0.088

P

R

I

C

E

C

Y

17716

18231

18904

19225

13930

14755

13915

14106

15412

8790

9530

36400

36910

37950

38700

40750

41800

37950

38600

20767

21224

22810

23170

27049

28194

30660

31340

21386

21467

15815

16720

18425

18965

13365

13782

15584

P

R

I

C

E

P

Y

16601

17716

18231

18904

14180

13930

13456

13915

14106

8440

8790

34750

36400

36910

37950

33750

40750

41800

37950

20498

20767

21224

22810

26436

27049

28194

30660

20491

21386

15800

15815

16720

18425

12880

13365

13782

D

P

R

I

C

E

0.065

0.029

0.036

0.017

-0.018

0.058

0.034

0.014

0.089

0.041

0.081

0.046

0.014

0.028

0.020

0.188

0.025

-0.097

0.017

0.013

0.022

0.072

0.016

0.023

0.041

0.084

0.022

0.043

0.004

0.001

0.056

0.097

0.029

0.037

0.031

0.123

U

s

c

A

N

C

Y

90.0

85.0

85.0

86.1

60.0

65.0

80.0

75.0

75.0

5.0

5.0

90.0

90.0

80.0

85.0

90.0

95.0

80.0

90.0

95.0

95.0

95.0

86.0

95.0

95.0

95.0

90.0

92.0

92.0

85.0

82.0

91 .0

86.0

91 .0

92.0

90.0

U

s

c

A

N

P

Y

90.0

85.0

85.0

65.0

60.0

80.0

80.0

75.0

5.0

5.0

90.0

90.0

80.0

.

90.0

95.0

80.0

.

95.0

95.0

95.0

.

95.0

95.0

95.0

92.0

85.0

82.0

91 .0

91 .0

92.0

D

U

S

C

A

N

-0.001

-0.050

0.000

0.011

-0.050

0.050

0.000

-0.050

0.000

0.000

0.000

-0.001

0.000

-0.100

0.050

-0.001

0.050

-0.150

0.100

0.049

0.000

0.000

-0.090

0.049

0.000

0.000

-0.050

0.019

0.000

-0.051

-0.030

0.090

-0.050

0.009

0.010

-0.020
M

M

G

GRAND AM/SKYLARK/ACHIEVA

BUICK REGAL

BUICK REGAL

BUICK REGAL

BUICK REGAL

CADILLAC DeVILLE

CADILLAC DeVILLE

CADILLAC DeVILLE

CADILLAC DeVILLE

CADILLAC ELDORADO

CADILLAC ELDORADO

CADILLAC ELDORADO

CADILLAC ELDORADO

CADILLAC SEVILLE

CADILLAC SEVILLE

CADILLAC SEVILLE

CADILLAC SEVILLE

CADILLAC CATERA

CHEVROLET CORVETTE

CHEVROLET CORVETTE

CHEVROLET CORVETTE

CHEVROLET CORVETTE

CAMARO/FIREBIRD

CAMARO/FIREBIRD

CAMARO/FIREBIRD

CAMARO/FIREBIRD

CAVALIER/SUNFIRE

CAVALIER/SUNFIRE

CAVALIER/SUNFIRE

CAVALIER/SUNFIRE

CORSICA/BERETTA

CORSICA/BERETTA

CHEVROLET MALIBU

CHEVROLET LUMINA

CHEVROLET LUMINA

CHEVROLET LUMINA

N

A

M

E

P

L

T

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1998

1995

1996

1997

C

H

G

M

0

D

L

LAST YR BF

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

2ND YR IT I

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR IT

REDES

REDES

NAME

REDES

REDES

REDES

NAME

EXIST

REDES

NAME

REDES

NAME

REDES

EXIST

2ND YR IT EXIST

NO CHANGE

NO CHANGE

NO CHANGE

S

A

L

E

S

C

Y

204237

91938

93465

49362

64012

110830

108349

103723

101224

22562

21527

16111

21117

35528

34949

35225

30102

25759

19224

21560

16116

29331

140753

126128

88611

82384

220277

362667

409884

346563

207547

187592

221405

209646

246824

232888

S

A

L

E

S

P

Y

335576

72522

91938

93465

49362

116155

110830

108349

103723

25400

22562

21527

16111

39832

35528

34949

35225

20680

22137

19224

21560

16116

170620

140753

126128

88611

333721

220277

362667

409884

204335

207547

108649

111609

209646

246824

S

A

L

E

S

2

Y

539813

164460

185403

142827

113374

226985

219179

212072

204947

47962

44089

37638

37228

75360

70477

70174

65327

46439

41361

40784

37676

45447

311373

266881

214739

170995

553998

582944

772551

756447

411882

395139

330054

321255

456470

479712

D

S

A

L

E

S

-0.497

0.237

0.016

-0.638

0.260

-0.047

-0.023

-0.044

-0.024

-0.118

-0.047

-0.290

0.271

-0.114

-0.016

0.008

-0.157

0.220

-0.141

0.115

-0.291

0.599

-0.192

-0.110

-0.353

-0.073

-0.415

0.499

0.122

-0.168

0.016

-0.101

0.712

0.630

0.163

-0.058

P

R

I

C

E

C

Y

16569

18690

19445

21095

21595

34900

35995

37660

38360

38220

39595

38660

39160

41935

42995

40660

43160

30635

36785

37225

38060

38560

14676

15171

17070

17717

10324

10774

11746

12332

13095

13490

16195

15760

16355

17495

P

R

I

C

E

P

Y

15584

18324

18690

19445

21095

32990

34900

35995

37660

37690

38220

39595

38660

41430

41935

42995

40660

30635

36285

36785

37225

38060

13663

14676

15171

17070

9213

10324

10774

11746

12585

13095

15995

15305

15760

16355

D

P

R

I

C

E

0.061

0.020

0.040

0.081

0.023

0.056

0.031

0.045

0.018

0.014

0.035

-0.024

0.013

0.012

0.025

-0.056

0.060

0.000

0.014

0.012

0.022

0.013

0.072

0.033

0.118

0.037

0.114

0.043

0.086

0.049

0.040

0.030

0.012

0.029

0.037

0.067

U

S

C

A

N

C

Y

80.0

90.0

95.0

91 .0

86.0

96.0

95.0

92.0

86.0

95.0

95.0

92.0

86.0

96.0

95.0

92.0

86.0

4.0

90.0

87.0

85.0

82.0

91 .0

86.0

91 .0

86.0

90.0

90.0

90.0

81.0

91.0

95.0

80.0

90.0

95.0

91 .0

90

90

95

91

96

95

92

95

95

92

96

95

92

3

90

87

85

91

86

91

90

90

90

91

90

90

95

U

S

C

A

N

P

Y

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

.0

,

.0

.0

.0

,

.0

.0

.0

.

.0

.0

.0

.0

D

u

s

c

A

N

-0.100

-0.001

0.050

-0.040

-0.050

0.059

-0.010

-0.030

-0.060

0.049

0.000

-0.030

-0.060

0.059

-0.010

-0.030

-0.060

0.010

-0.001

-0.030

-0.020

-0.030

0.009

-0.050

0.050

-0.050

-0.001

0.000

0.000

-0.090

0.009

0.040

-0.100

-0.001

0.050

-0.040
M

M

G

CHEVROLET LUMINA

GEO PRIZM

GEO PRIZM

GEO PRIZM

GEO METRO

GEO METRO

GEO METRO

CHEVROLET MONTE CARLO

CHEVROLET MONTE CARLO

CHEVROLET MONTE CARLO

CIERA/CUTLASS

CIERA/CUTLASS

CIERA/CUTLASS

CIERA/CUTLASS

SUPREME/INTRIGUE

SUPREME/INTRIGUE

SUPREME/INTRIGUE

SUPREME/INTRIGUE

OLDS AURORA

OLDS AURORA

OLDS AURORA

PONTIAC GRAND PRIX

PONTIAC GRAND PRIX

PONTIAC GRAND PRIX

PONTIAC GRAND PRIX

SATURN

SATURN

SATURN

SATURN

VW JETTA

VW JETTA

VW JETTA

VW JETTA

VW GOLF

VW GOLF

VW GOLF

N

A

M

E

P

L

T

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1998

1996

1997

1998

1996

1997

1998

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

C

H

G

M

0

D

L

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

2ND YR IT

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES NEW

2ND YR AFT

NO CHANGE

NO CHANGE

LAST YR BF

REDES NEW

2ND YR IT

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

NO CHANGE

NO CHANGE

NO CHANGE

EXIST

RENAM

NAME

REDES

RENAM

NAME

EXIST

REDES

NAME

REDES

REDES

S

A

L

E

S

C

Y

176505

84856

59605

49842

91888

60958

33965

81170

73595

63222

130876

107065

17392

50375

100984

80856

55477

83626

22957

25264

26411

123057

100512

144392

119512

286926

286155

260102

232109

73252

82118

87808

95489

16885

23928

22935

S

A

L

E

S

P

Y

232888

100084

84856

59605

69908

91888

60958

73119

81170

73595

138133

130876

107065

17392

101738

100984

80856

55477

31727

22957

25264

131658

123057

100512

144392

267450

286926

286155

260102

50882

73252

82118

87808

14517

16885

23928

S

A

L

E

S

2

Y

409393

184940

144461

109447

161796

152846

94923

154289

154765

136817

269009

237941

124457

67767

202722

181840

136333

139103

54684

48221

51675

254715

223569

244904

263904

554376

573081

546257

492211

124134

155370

169926

183297

31402

40813

46863

D

S

A

L

E

S

-0.277

-0.165

-0.353

-0.179

0.273

-0.410

-0.585

0.104

-0.098

-0.152

-0.054

-0.201

-1.817

1.063

-0.007

-0.222

-0.377

0.410

-0.324

0.096

0.044

-0.068

-0.202

0.362

-0.189

0.070

-0.003

-0.095

-0.114

0.364

0.114

0.067

0.084

0.151

0.349

-0.042

P

R

I

C

E

C

Y

17945

12495

13245

12563

8380

8920

9095

17255

17995

18495

14865

13955

17850

18325

17665

17455

19500

21440

34360

36400

36825

16634

17089

18769

19345

9995

10495

10995

11035

13475

14250

15070

15095

12500

13150

13970

P

R

I

C

E

P

Y

17495

11675

12495

13245

8085

8380

8920

16770

17255

17995

13670

14865

13955

17850

16670

17665

17455

19500

33065

34360

36400

16254

16634

17089

18769

9995

9995

10495

10995

13750

13475

14250

15070

12325

12500

13150

D

P

R

I

C

E

0.025

0.068

0.058

-0.053

0.036

0.062

0.019

0.029

0.042

0.027

0.084

-0.063

0.246

0.026

0.058

-0.012

0.111

0.095

0.038

0.058

0.012

0.023

0.027

0.094

0.030

0.000

0.049

0.047

0.004

-0.020

0.056

0.056

0.002

0.014

0.051

0.060

U

s

c

A

N

C

Y

86.0

55.0

51.0

62.0

50.0

50.0

50.0

95.0

91.0

86.0

85.0

82.0

90.0

80.0

90.0

95.0

91.0

86.0

95.0

90.0

87.0

90.0

95.0

91.0

86.0

95.0

95.0

95.0

95.0

10.0

15.0

10.0

15.0

10.0

15.0

5.0

U

s

c

A

N

P

Y

91 .0

50.0

55.0

51.0

45.0

50.0

50.0

90.0

95.0

91 .0

85.0

82.0

90.0

90.0

95.0

91.0

96.0

95.0

90.0

.

90.0

95.0

91 .0

.

95.0

95.0

95.0

.

10.0

15.0

10.0

10.0

15.0

D

U

S

C

A

N

-0.050

0.050

-0.040

0.110

0.050

0.000

0.000

0.050

-0.040

-0.050

-0.051

-0.030

0.080

-0.100

-0.001

0.050

-0.040

-0.050

-0.010

-0.050

-0.030

-0.001

0.050

-0.040

-0.050

0.049

0.000

0.000

0.000

0.053

0.050

-0.050

0.050

0.053

0.050

-0.100
00

M

M

G

VW GOLF

BMW 300

BMW 300

BMW 300

BMW 300

BMW 500

BMW 500

BMW 500

BMW 500

BMW Z3

NISSAN MAXIMA

NISSAN MAXIMA

NISSAN MAXIMA

NISSAN MAXIMA

NISSAN SENTRA

NISSAN SENTRA

NISSAN SENTRA

NISSAN SENTRA

NISSAN ALTIMA

NISSAN ALTIMA

NISSAN ALTIMA

NISSAN ALTIMA

HONDA CIVIC

HONDA CIVIC

HONDA CIVIC

HONDA CIVIC

HONDA ACCORD

HONDA ACCORD

HONDA ACCORD

HONDA ACCORD

MAZDA PROTEGE

MAZDA PROTEGE

MAZDA PROTEGE

MAZDA PROTEGE

MAZDA 626

MAZDA 626

N

A

M

E

P

L

T

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1998

1995

1996

1997

1998

1995

1996

1997

1998

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

C

H

G

M

0

D

L

LAST YR BF

NO

NO

CHANGE

CHANGE

COMPETITOR

NO

NO

CHANGE

CHANGE

LAST.YR BF

REDES SAME

2ND

2ND

i YR AFT

i YR IT

REDES SAME

2ND

NO

NO

' YR AFT

CHANGE

CHANGE

REDES SAME

2ND

NO

NO

NO

NO

NO

NO

NO

NO

NO

NO

2ND

NO

NO

NO

YR AFT

CHANGE

CHANGE

CHANGE

CHANGE

CHANGE

CHANGE

CHANGE

CHANGE '

CHANGE

CHANGE

YR AFT

CHANGE

CHANGE

CHANGE

REDES SAME

2ND

NO

NO

NO

NO

YR AFT

CHANGE

CHANGE

CHANGE

CHANGE

REDES

INTRO

REDES

NAME

REDES

EXIST

NAME

REDES

NAME

REDES

REDES

NAME

REDES

S

A

L

E

S

C

Y

20391

54006

62222

31975

50029

23520

23143

28525

34893

21075

128784

129284

124639

116860

165663

167508

154147

107049

158842

149260

139728

144287

273441

287718

318091

328748

345845

367137

365800

413628

71833

62018

52786

55009

99086

81638

S

A

L

E

S

P

Y

22935

50351

54006

62222

31975

22901

23520

23143

28525

29737

116994

128784

129284

124639

175441

165663

167508

154147

163522

158842

149260

139728

265871

273441

287718

318091

362407

345845

367137

365800

93102

71833

62018

52786

81210

99086

S

A

L

E

S

2

Y

43326

104357

116228

94197

82004

46421

46663

51668

63418

50812

245778

258068

253923

241499

341104

333171

321655

261196

322364

308102

288988

284015

539312

561159

605809

646839

708252

712982

732937

779428

164935

133851

114804

107795

180296

180724

D

S

A

L

E

S

-0.118

0.070

0.142

-0.666

0.448

0.027

•0.016

0.209

0.202

-0.344

0.096

0.004

•0.037

-0.064

-0.057

0.011

-0.083

-0.365

-0.029

-0.062

-0.066

0.032

0.028

0.051

0.100

0.033

-0.047

0.060

-0.004

0.123

-0.259

-0.147

-0.161

0.041

0.199

-0.194

P

R

I

C

E

C

Y

13995

24975

20560

21960

21960

35300

37900

39470

39470

29995

19999

20999

21969

21989

10999

11499

11969

11989

14969

15649

16319

15480

9890

10350

10945

11045

14940

15100

15495

15495

12295

11695

12595

12595

14995

15495

P

R

I

C

E

P

Y

13970

24675

24975

20560

21960

34900

35300

37900

39470

29995

22429

19999

20999

21969

10199

10999

11499

11969

13999

14969

15649

16319

9400

9890

10350

10945

14130

14940

15100

15495

9495

12295

11695

12595

14495

14995

D

P

R

I

C

E

0.002

0.012

-0.195

0.066

0.000

0.011

0.071

0.041

0.000

0.000

-0.115

0.049

0.045

0.001

0.076

0.044

0.040

0.002

0.067

0.044

0.042

-0.053

0.051

0.045

0.056

0.009

0.056

0.011

0.026

0.000

0.258

-0.050

0.074

0.000

0.034

0.033

U

s

c

A

N

C

Y

10.0

5.0

5.0

5.0

5.0

5.0

5.0

5.0

5.0

40.0

5.0

5.0

5.0

5.0

45.0

45.0

45.0

45.0

40.0

40.0

45.0

55.0

45.0

70.0

60.0

70.0

50.0

65.0

60.0

75.0

4.0

4.0

4.0

5.0

65.0

65.0

U

S

C

A

N

P

Y

5.0

5.0

5.0

5.0

.

5.0

5.0

5.0

40.0

.

5.0

5.0

5.0

.

45.0

45.0

45.0

,

40.0

40.0

45.0

.

45.0

70.0

60.0

.

50.0

65.0

60.0

.

4.0

4.0

4.0

.

65.0

D

U

S

C

A

N

0.050

0.003

0.000

0.000

0.000

0.003

0.000

0.000

0.000

0.000

0.003

0.000

0.000

0.000

-0.034

0.000

0.000

0.000

-0.084

0.000

0.050

0.100

-0.034

0.250

-0.100

0.100

0.016

0.150

-0.050

0.150

-0.007

0.000

0.000

0.010

0.166

0.000
M

M

G

MAZDA 626

MAZDA 626

MERCEDES E

MERCEDES E

MERCEDES E

MERCEDES E

MERCEDES C

MERCEDES C

MERCEDES C

MERCEDES C

SAAB 900

SAAB 900

SAAB 900

SAAB 900

SUBARU LEGACY

SUBARU LEGACY

SUBARU LEGACY

SUBARU LEGACY

SUBARU IMPREZA

SUBARU IMPREZA

SUBARU IMPREZA

SUBARU IMPREZA

TOYOTA COROLLA

TOYOTA COROLLA

TOYOTA COROLLA

TOYOTA COROLLA

TOYOTA TERCEL

TOYOTA TERCEL

TOYOTA TERCEL

TOYOTA TERCEL

TOYOTA CAMRY

TOYOTA CAMRY

TOYOTA CAMRY

TOYOTA CAMRY

TOYOTA AVALON

TOYOTA AVALON

N

A

M

E

P

L

T

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1996

1997

C

H

G

M

0

D

L

LAST YR BF

REDES SAME

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

2ND YR IT I

NO CHANGE

NO CHANGE

NO CHANGE

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR IT

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

REDES

NAME

REDES

NAME

REDES

EXIST

REDES

NAME

REDES

EXIST

REDES

NAME

REDES

2ND YR IT EXIST

NO CHANGE

S

A

L

E

S

C

Y

75847

89104

22641

35898

41873

45585

27753

26687

30562

36638

19927

21151

22917

25684

68322

91559

93999

89682

24838

22843

26288

19754

203980

216167

219165

237621

83344

60104

39130

3210

319807

354035

385814

398548

72033

71040

S

A

L

E

S

P

Y

81638

75847

27983

22641

35898

41873

17358

27753

26687

30562

14116

19927

21151

22917

60545

68322

91559

93999

31389

24838

22843

26288

206942

203980

216167

219165

88083

83344

60104

39130

319317

319807

354035

385814

56161

72033

S

A

L

E

S

2

Y

157485

164951

50624

58539

77771

87458

45111

54440

57249

67200

34043

41078

44068

48601

128867

159881

185558

183681

56227

47681

49131

46042

410922

420147

435332

456786

171427

143448

99234

42340

639124

673842

739849

784362

128194

143073

D

S

A

L

E

S

-0.074

0.161

-0.212

0.461

0.154

0.085

0.469

-0.039

0.136

0.181

0.345

0.060

0.080

0.114

0.121

0.293

0.026

-0.047

-0.234

-0.084

0.140

-0.286

-0.014

0.058

0.014

0.081

-0.055

-0.327

-0.429

-2.501

0.002

0.102

0.086

0.032

0.249

-0.014

P

R

I

C

E

C

Y

16145

16000

41000

39900

40495

42395

30950

29900

31045

31045

23375

23995

25995

26050

14364

16495

17390

17390

11850

13495

14290

16390

12498

12728

13418

12328

10198

10348

11118

13110

16128

16468

16868

17358

23418

24028

P

R

I

C

E

P

Y

15495

16145

40000

41000

39900

40495

29900

30950

29900

31045

21990

23375

23995

25995

13999

14364

16495

17390

11200

11850

13495

14290

12098

12498

12728

13418

8958

10198

10348

11118

16428

16126

16468

16868

22988

23418

D

P

R

I

C

E

0.041

-0.009

0.025

-0.027

0.015

0.046

0.035

-0.035

0.038

0.000

0.061

0.026

0.080

0.002

0.026

0.138

0.053

0.000

0.056

0.130

0.057

0.137

0.033

0.018

0.053

-0.085

0.130

0.015

0.072

0.165

-0.018

0.021

0.024

0.029

0.019

0.026

U

S

C

A

N

C

Y

65.0

65.0

2.0

2.0

0.0

0.0

2.0

2.0

0.0

0.0

1.0

1.0

2.0

2.0

35.0

40.0

40.0

40.0

1.0

1.0

1 .0

1 .0

45.0

50.0

50.0

55.0

10.0

10.0

10.0

10.0

55.0

55.0

55.0

55.0

60.0

55.0

U

s

c

A

N

P

Y

65.0

65.0

.

2.0

2.0

0.0

2.0

2.0

0.0

1.0

1.0

2.0

35.0

40.0

40.0

.

1.0

1 .0

1 .0

45.0

50.0

50.0

10.0

10.0

10.0

.

55.0

55.0

55.0

60.0

60.0

D

U

S

C

A

N

0.000

0.000

-0.027

0.000

-0.020

0.000

-0.027

0.000

-0.020

0.000

-0.037

0.000

0.010

0.000

-0.134

0.050

0.000

0.000

-0.037

0.000

0.000

0.000

-0.034

0.050

0.000

0.050

0.053

0.000

0.000

0.000

0.066

0.000

0.000

0.000

0.000

-0.050
00

o

M

M

G

TOYOTA AVALON

VOLVO 850/70

VOLVO 850/70

VOLVO 850/70

VOLVO 850/70

VOLVO 900/90

VOLVO 900/90

VOLVO 900/90

VOLVO 900/90

MITSUBISHI GALANT

MITSUBISHI GALANT

MITSUBISHI GALANT

MITSUBISHI GALANT

MITSUBISHI MIRAGE

MITSUBISHI MIRAGE

MITSUBISHI MIRAGE

MITSUBISHI MIRAGE

MITSUBISHI ECLIPSE

MITSUBISHI ECLIPSE

MITSUBISHI ECLIPSE

MITSUBISHI ECLIPSE

ACURA INTEGRA

ACURA INTEGRA

ACURA INTEGRA

ACURA INTEGRA

ACURA LEGEND

ACURA TL

ACURA TL

ACURA CL

HYUNDAI ELANTRA

HYUNDAI ELANTRA

HYUNDAI ELANTRA

HYUNDAI ELANTRA

EXCEL/ACCENT

EXCEL/ACCENT

EXCEL/ACCENT

N

A

M

E

P

L

T

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

C

U

R

R

Y

R

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1997

1998

1998

1995

1996

1997

1998

1995

1996

1997

C

H

G

M

0

D

L

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF RENAM

REDES NEW NAME

NO CHANGE

NO CHANGE

LAST YR BF RENAM

LAST YR IT EXIST

2ND YR AFT REDES

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

REDES SAME NAME

2ND YR AFT REDES

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR IT EXIST

2ND YR IT EXIST

LAST YR BF REDES

NO CHANGE

LAST YR BF REDES

REDES SAME NAME

2ND YR AFT REDES

NO CHANGE

REDES NEW NAME

2ND YR AFT REDES

NO CHANGE

S

A

L

E

S

C

Y

78080

58688

66591

34061

82406

28381

19910

16268

11031

62884

66373

47986

40537

51702

25875

34033

34016

51296

61469

61310

59231

60428

50554

43245

34292

21203

24004

23119

27249

37375

37703

39298

42086

46878

52746

38552

S

A

L

E

S

P

Y

71040

43584

58688

66591

34061

35097

28381

19910

16268

54816

62884

66373

47986

37452

51702

25875

34033

50616

51296

61469

61310

67928

60428

50554

43245

38485

25363

24004

29873

44665

37375

37703

39298

52831

46878

52746

S

A

L

E

S

2

Y

149120

102272

125279

100652

116467

63478

48291

36178

27299

117700

129257

114359

88523

89154

77577

59908

68049

101912

112765

122779

120541

128356

110982

93799

77537

59688

49367

47123

57122

82040

75078

77001

81384

99709

99624

91298

0

0

0

-0

0

-0

-0

-0

-0

0

0

-0

-0

0

-0

0

-0

0

0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

0

0

0

-0

0

-0

D

s

A

L

E

S

.094

.298

.126

.670

.884

.212

.354

.202

.388

.137

.054

.324

.169

.322

.692

.274

.000

.013

.181

.003

.034

.117

.178

.156

.232

.596

.055

.038

.092

.178

.009

.041

.069

.120

.118

.313

P

R

I

C

E

C

Y

24828

24935

26300

27560

27560

23360

33960

34875

34875

14349

14920

15840

16100

9799

10440

10990

11250

14359

14970

14250

16160

15700

16100

16535

16635

36100

28885

31135

22745

10299

10899

11514

11934

8079

8285

9014

P

R

I

C

E

P

Y

24028

24680

24935

26300

27560

22900

23360

33960

34875

13600

14349

14920

15840

9179

9799

10440

10990

12099

14359

14970

14250

14820

15700

16100

16535

33800

27900

28885

22545

9799

10299

10899

11514

7290

8079

8285

D

P

R

I

C

E

0.033

0.010

0.053

0.047

0.000

0.020

0.374

0;027

0.000

0.054

0.039

0.060

0.016

0.065

0.063

0.051

0.023

0.171

0.042

-0.049

0.126

0.058

0.025

0.027

0.006

0.066

0.035

0.075

0.009

0.050

0.057

0.055

0.036

0.103

0.025

0.084

U

S

C

A

N

C

Y

60.0

2.0

2.0

2.0

2.0

2.0

2.0

2.0

0.0

46.0

45.0

45.0

47.0

5.0

5.0

5.0

5.0

72.0

71.0

56.0

72.0

5.0

5.0

5.0

0.0

5.0

0.0

0.0

70.0

5.0.

5.0

1 .0

1 .0

10.0

5.0

1 .0

55.

2.

2.

2.

2.

2.

2.

46.

45.

45.

.

5.

5.

5.

72.

71 .

56.

5.

5.

5.

0.

0.

65.

.

5.

5.

1 .

10.

5.

U

S

C

A

N

P

Y

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

D

U

S

c

A

N

0.050

-0.027

0.000

0.000

0.000

-0.027

0.000

0.000

-0.020

-0.024

-0.010

0.000

0.020

0.003

0.000

0.000

0.000

0.236

-0.010

-0.150

0.160

0.003

0.000

0.000

-0.050

0.003

0.000

0.000

0.050

0.003

0.000

-0.040

0.000

0.053

-0.050

-0.040
oo

M

M

G

EXCEL/ACCENT

INFINITI 130

INFINITI 130

LEXUS ES

LEXUS ES

LEXUS ES

LEXUS ES

LEXUS LS

LEXUS LS

LEXUS LS

LEXUS LS

KIA SEPHIA

KIA SEPHIA

KIA SEPHIA

KIA SEPHIA

JEEP CHEROKEE

JEEP CHEROKEE

JEEP CHEROKEE

JEEP CHEROKEE

JEEP WRANGLER

JEEP WRANGLER

JEEP WRANGLER

JEEP WRANGLER

JEEP GRAND CHEROKEE

JEEP GRAND CHEROKEE

JEEP GRAND CHEROKEE

JEEP GRAND CHEROKEE

DODGE RAM VAN

DODGE RAM VAN

DODGE RAM VAN

DODGE RAM VAN

DODGE DAKOTA

DODGE DAKOTA

DODGE DAKOTA

DODGE DAKOTA

CARAVAN/VOYAGER/T&C

N

A

M

E

P

L

T

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

BIG 3

V

E

H

T

Y

P

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

CAR

SUV

SUV

SUV

SUV

SUV

SUV

SUV

SUV

SUV

SUV

SUV

SUV

VAN

VAN

VAN

VAN

P/U

P/U

P/U

P/U

VAN

C

U

R

R

Y

R

1998

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

C

H

G

M

0

D

L

NO CHANGE

2ND YR IT

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

COMPETITOR

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

EXIST

REDES

NAME

REDES

NAME

REDES

REDES

INTRO

REDES

S

A

L

E

S

C

Y

36439

29062

27389

40265

42195

59887

48891

22230

23460

19524

21189

15521

25679

30259

55867

114928

145742

124949

143786

68619

74183

84270

82098

248418

269511

267609

238478

73470

77007

82166

64626

116396

105929

125236

150745

486213

S

A

L

E

S

P

Y

38552

27839

29062

37855

40265

42195

59887

22736

22230

23460

19524

8629

15521

25679

30259

119085

114928

145742

124949

72584

68619

74183

84270

238893

248418

269511

267609

86539

73470

77007

82166

105909

116396

105929

125236

532860

S

A

L

E

S

2

Y

74991

56901

56451

78120

82460

102082

108778

44966

45690

42984

40713

24150

41200

55938

86126

234013

260670

270691

268735

141203

142802

158453

166368

487311

517929

537120

506087

160009

150477

159173

146792

222305

222325

231165

275981

1019073

D

S

A

L

E

S

-0.056

0.043

-0.059

0.062

0.047

0.350

-0.203

-0.023

0.054

-0.184

0.082

0.587

0.503

0.164

0.613

-0.036

0.238

-0.154

0.140

-0.056

0.078

0.127

-0.026

0.039

0.081

-0.007

-0.115

-0.164

0.047

0.065

-0.240

0.094

-0.094

0.167

0.185

-0.092

P

R

I

C

E

C

Y

9534

29295

29395

31500

32400

30485

31285

51200

52900

53395

53695

8895

9495

10220

10445

13900

14745

15825

16065

11995

12985

13995

14615

23143

24093

26070

26470

14561

16893

18194

19074

10286

11075

13235

13485

17044

P

R

I

C

E

P

Y

9014

28420

29295

31200

31500

32400

30485

51200

51200

52900

53395

8495

8895

9495

10220

13427

13900

14745

15825

11480

11995

12985

13995

21156

23143

24093

26070

13412

14561

16893

18194

9600

10286

11075

13235

16300

D

P

R

I

C

E

0.056

0.030

0.003

0.010

0.028

-0.061

0.026

0.000

0.033

0.009

0.006

0.046

0.065

0.074

0.022

0.035

0.059

0.071

0.015

0.044

0.079

0.075

0.043

0.090

0.040

0.079

0.015

0.082

0.149

0.074

0.047

0.069

0.074

0.178

0.019

0.045

U

S

C

A

N

C

Y

1.0

5.0

5.0

10.0

10.0

15.0

10.0

5.0

5.0

0.0

0.0

5.0

5.0

5.0

1 .0

84.0

79.0

76.0

74.0

90.0

90.0

86.0

81 .0

93.0

92.0

85.0

84.0

90.8

87.0

86.3

87.8

93.0

89.0

85.0

86.0

89.0

U

S

C

A

N

P

Y

1.0

5.0

5.0

10.0

10.0

15.0

.

5.0

5.0

0.0

.

5.0

5.0

5.0

,

B4.0

79.0

76.0

.

90.0

90.0

86.0

.

93.0

92.0

85.0

.

90.8

87.0

86.3

93.0

89.0

85.0

.

D

U

S

C

A

N

0.000

0.000

0.000

. 0.053

0.000

0.050

-0.050

0.003

0.000

-0.050

0.000

0.003

0.000

0.000

-0.040

-0.061

-0.050

-0.030

-0.020

-0.001

0.000

-0.040

-0.050

0.029

-0.010

-0.070

-0.010

0.007

-0.038

-0.007

0.015

0.029

-0.040

-0.040

0.010

-0.011
00

M

M

G

CARAVAN/VOYAGER/T&C

CARAVAN/VOYAGER/T&C

CARAVAN/VOYAGER/T&C

DODGE RAM PICKUP

DODGE RAM PICKUP

DODGE RAM PICKUP

DODGE RAM PICKUP

FORD F-SERIES

FORD F-SERIES

FORD F-SERIES

FORD F-SERIES

BRONCO/EXPEDTN/NAVIGTR

BRONCO/EXPEDTN/NAVIGTR

BRONCO/EXPEDTN/NAVIGTR

BRONCO /EXPEDTN / NAVI GTR

FORD AEROSTAR

FORD AEROSTAR

FORD AEROSTAR

EXPLORER/MOUNTAINEER

EXPLORER/MOUNTAINEER

EXPLORER/MOUNTAINEER

EXPLORER/MOUNTAINEER

FORD ECONOLINE

FORD ECONOLINE

FORD ECONOLINE

FORD ECONOLINE

FORD RANGER

FORD RANGER

FORO RANGER

FORD RANGER

FORD WINDSTAR

FORD WINDSTAR

FORD WINDSTAR

MERCURY VILLAGER

MERCURY VILLAGER

MERCURY VILLAGER

N

A

M

E

P

L

T

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

V

E

H

T

Y

P

VAN

VAN

VAN

P/U

P/U

P/U

P/U

P/U

P/U

P/U

P/U

SUV

SUV

SUV

SUV

VAN

VAN

VAN

SUV

SUV

SUV

SUV

VAN

VAN

VAN

VAN

P/U

P/U

P/U

P/U

VAN

VAN

VAN

VAN

VAN

VAN

C

U

R

R

Y

R

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1996

1997

1998

1995

1996

1997

C

H

G

M

0

D

L

REDES SAME

2ND YR AFT

NO CHANGE

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

LAST YR BF

NAME

REDES

REDES

REDES

NAME

REDES

RENAM

REDES NEW NAME

2ND YR AFT

COMPETITOR

NO CHANGE

LAST YR IT

LAST YR BF

REDES SAME

ADDL NAME 1

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

REDES

INTRO

EXIST

REDES

NAME

[NTROD

REDES

NAME

2ND YR IT EXIST

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

S

A

L

E

S

C

Y

542715

521649

522710

253189

369073

350037

394958

698418

767141

751492

807604

34825

44655

217403

260119

98239

81403

55071

345427

404658

431795

454059

199896

178979

185946

200695

315201

290133

292987

323086

198456

209717

195983

74704

67795

59807

S

A

L

E •

S

P

Y

486213

542715

521649

206370

253189

369073

350037

630409

698418

767141

751492

34406

34825

44655

217403

177944

98239

81403

299245

345427

404658

431795

198212

199896

178979

185946

350900

315201

290133

292987

228620

198456

209717

73070

74704

67795

S

A

L

E

S

2

Y

1028928

1064364

1044359

459559

622262

719110

744995

1328827

1465559

1518633

1559096

69231

79480

262058

477522

276183

179642

136474

644672

750085

836453

885854

398108

378875

364925

386641

666101

605334

583120

616073

427076

408173

405700

147774

142499

127602

D

S

A

L

E

S

0.110

-0.040

0.002

0.204

0.377

-0.053

0.121

0.102

0.094

-0.021

0.072

0.012

0.249

1 .583

0.179

-0.594

-0.188

-0.391

0.144

0.158

0.065

0.050

0.008

-0.111

0.038

0.076

-0.107

-0.083

0.010

0.098

-0.141

0.055

-0.068

0.022

-0.097

-0.125

P

R

I

C

E

C

Y

17875

19184

19320

13188

13741

14715

15125

13287

14150

15145

15475

21985

22840

28929

30712

16725

16725

17815

18985

19570

21376

21125

17085

17640

19370

19885

10224

10425

11480

11995

18270

19665

18790

19045

19385

20540

P

R

I

C

E

P

Y

17044

17875

19184

12734

13188

13741

14715

12348

13287

14150

15145

21725

21985

22840

28929

15150

16725

16725

17470

18985

19570

21376

16348

17085

17640

19370

9449

10224

10425

11480

17745

18270

19665

18375

19045

19385

D

P

R

I

C

E

0.048

0.071

0.007

0.035

0.041

0.068

0.027

0.073

0.063

0.068

0.022

0.012

0.038

0.236

0.060

0.099

0.000

0.063

0.083

0.030

0.088

-0.012

0.044

0.032

0.094

0.026

0.079

0.019

0.096

0.044

0.029

0.074

-0.046

0.036

0.018

0.058

U

S

C

A

N

C

Y

86.2

80.3

80.1

86.0

77.0

76.0

74.0

90.0

90.0

90.0

95.0

95.0

95.0

85.3

94.2

85.0

85.0

80.0

80.0

75.0

76.6

81 .1

90.0

95.0

90.0

90.0

80.0

85.0

80.0

80.0

90.0

90.0

90.0

70.0

70.0

60.0

U

S

c

A

N

P

Y

89.0

86.2

80.3

.

86.0

77.0

76.0

,

90.0

90.0

90.0

.

95.0

95.0

85.3

85.0

85.0

.

80.0

75.0

76.6

.

90.0

95.0

90.0

,

80.0

85.0

80.0

95.0

90.0

90.0

70.0

70.0

D

U

S

C

A

N

-0.028

-0.059

-0.001

-0.041

-0.090

-0.010

-0.020

-0.001

0.000

0.000

0.050

0.049

0.000

-0.097

0.088

-0.051

0.000

-0.050

-0.101

-0.050

0.016

0.044

-0.001

0.050

-0.050

0.000

-0.101

0.050

-0.050

0.000

-0.050

0.000

0.000

-0.201

0.000

-0.100
M

M

G

MERCURY VILLAGER

GM S/T PICKUP

GM S/T PICKUP

GM S/T PICKUP

GM S/T PICKUP

BLAZER/JIMMY/BRAVADA

BLAZER/JIMMY/BRAVADA

BLAZER/JIMMY/BRAVADA

BLAZER / JI MMY/BRAVADA

ASTROVAN/SAFARI

ASTROVAN/SAFARI

ASTROVAN/SAFARI

ASTROVAN/SAFARI

'- GM G VAN

Lo GM G VAN

GM G VAN

GM G VAN

GM C/K PICKUP

GM C/K PICKUP

GM C/K PICKUP

GM C/K PICKUP

GEO TRACKER

GEO TRACKER

GEO TRACKER

GM U VAN

GM U VAN

GM U VAN

GM U VAN

TAHOE/YUKON

TAHOE/YUKON

TAHOE/YUKON

TAHOE/YUKON

GM SUBURBAN

GM SUBURBAN

GM SUBURBAN

GM SUBURBAN

N

A

M

E

P

L

T

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

BIG

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

V

E

H

T

Y

P

VAN

P/U

P/U

P/U

P/U

SUV

SUV

SUV

SUV

VAN

VAN

VAN

VAN

VAN

VAN

VAN

VAN

P/U

P/U

P/U

P/U

SUV

SUV

SUV

VAN

VAN

VAN

VAN

SUV

SUV

SUV

SUV

SUV

SUV

SUV

SUV

c

u

R

R

Y

R

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

C

H

G

M

0

D

L

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF REDES

REDES SAME NAME

2ND YR AFT REDES

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF RENAM

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF RENAM

REDES NEW NAME

2ND YR AFT REDES

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

S

A

L

E

S

C

Y

40183

275726

234491

240719

268649

319486

322365

337750

325842

164897

163207

155764

126946

127690

114140

115723

118237

720269

723791

715316

729239

47546

36726

21672

96585

70573

120237

193582

80773

159471

155198

182918

117217

125474

138912

151066

S

A

L

E

S

P

Y

59807

288280

275726

234491

240719

226175

319486

322365

337750

177767

164897

163207

155764

122986

127690

114140

115723

775057

720269

723791

715316

41566

47546

36726

92768

96585

70573

120237

32556

80773

159471

155198

120102

117217

125474

138912

S

A

L

E

S

2

Y

99990

564006

510217

475210

509368

545661

641851

660115

663592

342664

328104

318971

282710

250676

241830

229863

233960

1495326

1444060

1439107

1444555

89112

84272

58398

189353

167158

190810

313819

113329

240244

314669

338116

237319

242691

264386

289978

D

S

A

L

E

S

-0.398

-0.045

-0.162

0.026

0.110

0.345

0.009

0.047

-0.036

-0.075

-0.010

-0.047

-0.205

0.038

-0.112

0.014

0.021

-0.073

0.005

-0.012

0.019

0.134

-0.258

-0.527

0.040

-0.314

0.533

0.476

0.909

0.680

-0.027

0.164

-0.024

0.068

0.102

0.084

P

R

I

C

E

C

Y

21030

10524

11274

12116

12511

18708

19758

21895

23001

17828

18995

19655

19941

16927

18658

19704

20148

13454

14033

15174

15671

12970

13755

13995

17404

18915

20957

21659

22048

22886

24163

26066

21907

24027

25343

26313

P

R

I

C

E

P

Y

20540

9685

10524

11274

12116

17044

18708

19758

21895

16302

17828

18995

19655

15931

16927

18658

19704

12371

13454

14033

15174

11920

12970

13755

16943

17404

18915

20957

21349

22048

22886

24163

20425

21907

24027

25343

D

P

R

I

C

E

0.024

0.083

0.069

0.072

0.032

0.093

0.055

0.103

0.049

0.090

0.063

0.034

0.014

0.061

0.097

0.055

0.022

0.084

0.042

0.078

0.032

0.084

0.059

0.017

0.027

0.083

0.102

0.033

0.032

0.037

0.054

0.076

0.070

0.092

0.053

0.038

U

S

C

A

N

C

Y

60.0

95.0

92.0

90.0

90.0

95.0

91.0

91 .0

90.0

95.0

95.0

95.0

90.0

95.0

95.0

95.0

90.0

95.0

95.0

91 .5

90.0

40.0

40.0

40.0

92.0

95.0

95.0

75.0

95.0

95.0

90.0

86.0

95.0

95.0

95.0

85.0

U

S

C

A

N

P

Y

60.0

95.0

92.0

90.0

.

95.0

91 .0

91.0

95.0

95.0

95.0

95.0

95.0

95.0

.

95.0

95.0

91.5

40.0

40.0

40.0

.

92.0

95.0

95.0

95.0

95.0

90.0

95.0

95.0

95.0

D

U

S

C

A

N

0.000

0.049

-0.030

-0.020

0.000

0.049

-0.040

0.000

-0.010

0.049

0.000

0.000

-0.050

0.049

0.000

0.000

-0.050

0.049

0.000

-0.035

-0.015

0.000

0.000

0.000

0.019

0.030

0.000

-0.200

0.049

0.000

-0.050

-0.040

0.049

0.000

0.000

-0.100
M

M

G

NISSAN PICKUP

NISSAN PICKUP

NISSAN PICKUP

NISSAN PICKUP

PATHFINDER/QX4

PATHFINDER/QX4

PATHFINDER/QX4

PATHFINDER/QX4

NISSAN QUEST

NISSAN QUEST

NISSAN QUEST

NISSAN QUEST

ISUZU RODEO

ISUZU RODEO

ISUZU RODEO

ISUZU RODEO

MAZDA PICKUP

MAZDA PICKUP

MAZDA PICKUP

MAZDA PICKUP

TOYOTA PICKUP

TOYOTA PICKUP

TOYOTA PICKUP

TOYOTA PICKUP

TOYOTA 4-RUNNER

TOYOTA 4-RUNNER

TOYOTA 4-RUNNER

TOYOTA 4-RUNNER

TOYOTA T-1OO

TOYOTA T-1OO

TOYOTA T-1OO

TOYOTA T-1OO

TOYOTA RAV4

TOYOTA RAV4

MITSUBISHI MONTERO

MITSUBISHI MONTERO

N

A

M

E

P

L

T

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

V

E

H

T

Y

P

P/U

P/U

P/U

P/U

SUV

SUV

SUV

SUV

VAN

VAN

VAN

VAN

SUV

SUV

SUV

SUV

P/U

P/U

P/U

P/U

P/U

P/U

P/U

P/U

SUV

SUV

SUV

SUV

P/U

P/U

P/U

P/U

SUV

SUV

SUV

SUV

c

u

R

R

Y

R

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1995

1996

1997

1998

1997

1998

1995

1996

C

H

G

M

0

D

L

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

ADDL NAME :

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

2ND YR IT I

NO CHANGE

LAST YR BF

REDES SAME

REDES NEW t

2ND YR AFT

NO CHANGE

NO CHANGE

LAST YR BF

REDES SAME

2ND YR AFT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

LAST YR IT

REDES

NAME

INTROD

REDES

NAME

EXIST

REDES

NAME

JAME

REDES

REDES

NAME

REDES

EXIST

2ND YR IT EXIST

NO CHANGE

NO CHANGE

NO CHANGE

S

A

L

E

S

C

Y

134101

121240

123619

93362

69523

71914

93598

85650

53668

47526

45913

32706

59560

63997

61931

59336

47244

42627

38656

39715

160737

144499

139963

153873

76351

93056

124176

116577

32051

37587

33806

10702

66732

65260

19114

13352

S

A

L

E

S

P

Y

120721

134101

121240

123619

58242

69523

71914

93598

48794

53668

47526

45913

58161

59560

63997

61931

58177

47244

42627

38656

195380

160737

144499

139963

68208

76351

93056

124176

14032

32051

37587

33806

41242

66732

13263

19114

S

A

L

E

S

2

Y

254822

255341

244859

216981

127765

141437

165512

179248

102462

101194

93439

78619

117721

123557

125928

121267

105421

89871

81283

78371

356117

305236

284462

293836

144559

169407

217232

240753

46083

69638

71393

44508

107974

131992

32377

32466

D

S

A

L

E

S

0.105

-0.101

0.019

-0.281

0.177

0.034

0.264

-0.089

0.095

-0.122

-0.035

-0.339

0.024

0.072

-0.033

-0.043

-0.208

-0.103

-0.098

0.027

-0.195

-0.106

-0.032

0.095

0.113

0.198

0.288

-0.063

0.826

0.159

-0.106

-1.150

0.481

-0.022

0.365

-0.359

P

R

I

C

E

C

Y

9999

10999

11469

12480

21019

22399

25424

26893

19839

20899

21719

23589

15840

17340

17785

18440

10270

9925

10980

11395

10348

12028

12658

12958

21518

19488

20408

21078

13788

14448

15098

15318

15538

15858

27625

28470

P

R

I

C

E

P

Y

9459

9999

10999

11469

19669

21019

22399

25424

19079

19839

20899

21719

15089

15840

17340

17785

9460

10270

9925

10980

10118

10348

12028

12658

20308

21518

19488

20408

12998

13788

14448

15098

14948

15538

24225

27625

D

P

R

I

C

E

0.056

0.095

0.042

0.084

0.066

0.064

0.127

0.056

0.039

0.052

0.038

0.083

0.049

0.090

0.025

0.036

0.082

-0.034

0.101

0.037

0.022

0.150

0.051

0.023

0.058

-0.099

0.046

0.032

0.059

0.047

0.044

0.014

0.039

0.020

0.131

0.030

U

S

C

A

N

C

Y

30.0

30.0

40.0

45.0

0.0

5.0

5.0

5.0

70.0

70.0

60.0

60.0

35.0

40.0

40.0

55.0

80.0

85.0

75.0

80.0

25.0

45.0

45.0

45.0

5.0

10.0

10.0

10.0

10.0

20.0

15.0

15.0

10.0

5.0

2.0

2.0

U

S

C

A

N

P

Y

30.0

30.0

40.0

t

0.0

5.0

5.0

,

70.0

70.0

60.0

35.0

40.0

40.0

80.0

85.0

75.0

25.0

45.0

45.0

.

5.0

10.0

10.0

.

10.0

20.0

15.0

5.0

10.0

2.0

D

U

S

c

A

N

-0.184

0.000

0.100

0.050

-0.047

0.050

0.000

0.000

0.216

0.000

-0.100

0.000

-0.134

0.050

0.000

0.150

0.316

0.050

-0.100

0.050

-0.234

0.200

0.000

0.000

0.003

0.050

0.000

0.000

0.053

0.100

-0.050

0.000

0.050

-0.050

-0.027

0.000
00

M

M

G

MITSUBISHI M0NTER0

MITSUBISHI MONTERO

HONDA PASSPORT

HONDA PASSPORT

HONDA PASSPORT

HONDA PASSPORT

HONDA ODYSSEY

HONDA ODYSSEY

HONDA ODYSSEY

HONDA CR-V

LAND ROVER

LAND ROVER

LAND ROVER

LAND ROVER

N

A

M

E

P

L

T

IMPORT

IMPORT

TRANSPLANT

TRANSPLANT

TRANSPLANT

TRANSPLANT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

IMPORT

V

E

H

T

Y

P

SUV

SUV

SUV

SUV

SUV

SUV

VAN

VAN

VAN

SUV

SUV

SUV

SUV

SUV

c

u

R

R

Y

R

1997

1998

1995

1996

1997

1998

1996

1997

1998

1998

1995

1996

1997

1998

C

H

G

M

0

D

L

ADDL NAME

NO CHANGE

2ND YR IT

NO CHANGE

LAST YR BF

REDES SAME

2ND YR IT

NO CHANGE

LAST YR BF

2ND YR IT

NO CHANGE

NO CHANGE

NO CHANGE

NO CHANGE

INTROD

EXIST

REDES

NAME

EXIST

REDES

EXIST

S

A

L

E

S

C

Y

31566

40892

29016

29006

24619

24677

29101

21897

16029

91700

17901

23362

24704

20686

S

A

L

E

S

P

Y

13352

31566

17148

29016

29006

24619

19096

29101

21897

50959

9179

17901

23362

24704

S

A

L

E

S

2

Y

44918

72458

46164

58022

53625

49296

48197

50998

37926

142659

27080

41263

48066

45390

D

S

A

L

E

S

0.860

0.259

0.526

-0.000

-0.164

0.002

0.421

-0.284

-0.312

0.588

0.668

0.266

0.056

-0.178

P

R

I

C

E

C

Y

18065

18475

16330

17990

21865

23095

23560

23955

24205

18745

28650

29950

32625

35625

P

R

I

C

E

P

Y

28470

18065

15660

16330

17990

21865

23215

23560

23955

19695

27900

28650

29950

32625

D

P

R

I

C

E

-0.455

0.022

0.042

0.097

0.195

0.055

0.015

0.017

0.010

-0.049

0.027

0.044

0.086

0.088

U

s

c

A

N

C

Y

7.0

1.0

35.0

40.0

40.0

55.0

5.0

5.0

5.0

5.0

0.0

0.0

0.0

0.0

U

S

C

A

N

P

Y

2.0

7.0

,

35.0

40.0

40.0

5.0

5.0

5.0

0.0

.

0.0

0.0

0.0

D

U

s

c

A

N

0.050

-0.060

-0.134

0.050

0.000

0.150

0.000

0.000

0.000

0.050

-0.047

0.000

0.000

0.000

APPENDIX C

REQUEST FOR PUBLIC COMMENT

ON PROPOSED COLLECTION OF INFORMATION

187
[Federal Register: July 24, 1997 (Volume 62, Number 142)]

[Notices]

(Page 39886]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr24jy97-134]

[[Page 39886]]

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. 92-64; Notice 12]

Reports, Forms, and Recordkeeping Requirements

AGENCY: National Highway Traffic safety Administration (NHTSA) ,

Department of Transportation (DOT).

ACTION: Request for public comment on proposed collections of

information.

SUMMARY: Before a Federal agency can collect certain information from

the public, it must receive approval from the Office of Management and

Budget (OMB). Under procedures established by the Paperwork Reduction

Act of 1995, before seeking OMB approval, Federal Agencies must solicit

public comment on the proposed collections of information, including

extensions and reinstatements of previously approved collections.

DATES: Comments must be received on or before September 22, 1997.

ADDRESSES. Comments must refer to the docket and notice numbers cited

at the beginning of this notice and be submitted to the Docket Section,

Room 5109, 400 Seventh Street, SW., Washington, DC 20590. It is

requested, but not required, that one original plus two copies of the

comments be provided. The Docket hours are from 9:30 a.m. to 4 p.m.,

Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Complete copies of each NHTSA request

for collection of information may be obtained at no charge from Mr.

Edward Kosek, NHTSA Information Collection Clearance Officer, NHTSA,

400 Seventh Street SW, Washington, DC 20590. Mr. Kosek1s telephone

number is (202) 366-2589. Please identify the relevant collection of

information by referring to its OMB Clearance Number.

SUPPLEMENTARY INFORMATION: Under the Paperwork Reduction Act of 1995,

before an agency submits a proposed collection of information to OMB

for approval, it must publish a document in the Federal Register

providing a 60-day comment period and otherwise consult with members of

the public and affected agencies concerning each proposed collection of

information. The OMB has promulgated regulations describing what must

be included in such a document. Under OMB's regulations (at 5 CFR

1320.8(d)), an agency must ask for public comment on the following:

(i) Whether the proposed collection of information is necessary for

the proper performance of the functions of the agency, including

whether the information will have practical utility;

(ii) The accuracy of the agency's estimates of the burden of the

proposed collection of information, including the validity of the

methodology and assumptions used;

(iii) How to enhance the quality, utility, and clarity of

188
information to be collected; and

(iv) How to minimize the burden of the collection of information on

those who are to respond, including the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of information technology, e.g., permitting electronic

submission of responses. In compliance with these requirements, NHTSA

asks public comment on the following proposed collections of

information:

Title—American Automobile Labeling Act.

Type of Request—New collection.

OMB Clearance Number—New collection.

Form Number—This collection of information uses no standard forms.

Requested Expiration Date of Approval—Three years from approval

date.

Summary of the Collection of Information—NHTSA will conduct three

surveys to collect information from potential and actual purchasers of

new passenger cars, light trucks, and multipurpose passenger vehicles;

new vehicle dealers; and domestic and foreign-based manufacturers of

these vehicles.

Description of the Need for the Information and Proposed Use of the

Information—Under Executive Order 12866, *'Regulatory Planning and

Review1' NHTSA is required to conduct periodic evaluations to assess

the effectiveness of its existing regulations and programs. Since this

regulation has been in effect for at least a full year, NHTSA intends

to collect data through the administration of three surveys, to

evaluate the effectiveness of the American Automobile Labeling Act.

Description of the Likely Respondents (Including Estimated Number,

and Proposed Frequency of Response to the Collection of Information—

NHTSA estimates that at least 6,250 telephone calls will be made to

consumers, with a target for successfully completed responses of 800

persons. NHTSA estimates that 300 vehicle dealers will be contacted to

obtain 200 completed responses. NHTSA anticipates that about 23 vehicle

manufacturers will be affected by the reporting requirements. NHTSA

does not believe any of these manufacturers is a small business (i.e.,

one that employs less than 500 persons) since each manufacturer employs

more than 500 persons. Each of the surveys is a one-time collection.

Estimate of the Total Annual Reporting and Recordkeeping Burden

Resulting from the Collection of Information—NHTSA estimates that the

total reporting burden for consumers will amount to approximately 224

hours. The total information collection burden on dealers will amount

to approximately 1,650 hours, and the total information collection

burden on all manufacturers will amount to approximately 230 hours. The

total reporting burden for this project is estimated at 2,104 hours;

the total recordkeeping costs for the one-time collection of

information is estimated at $53,705.00

.Issued on: July 18, 1997.

William H. Walsh,

Associate Administrator for Plans and Policy.

[FR Doc. 97-19518 Filed 7-23-97; 8:45 am]

BILLING CODE 4910-59-P

189

APPENDIX D

CONSUMER SURVEY QUESTIONNAIRE

Questions nos. 22 and 24 in the consumer survey were omitted from the analyses in this report

subsequent to legislation amending domestic content cost procedures (Transportation Equity Act For

the 21st Century, TEA-21) and industry discussions.

191
Chilton Research Services #DL810 7

A division of TNS Intersearh Fall 199 8

New Vehicle Labeling Study— Consumer Survey Questionnaire

(INTERVIEWER: IF NECESSARY, VERIFY YOU ARE SPEAKING TO AN ADULT, 18 + )

INTRODUCTION: Hello, I'm

calling from Chilton Research Services. We are conducting a survey

about automobiles and would like to include you or someone in your

household among the people who get to express their opinion.

[IF Q.S5 WAS ASKED ON A PREVIOUS CALL, INSERT BEFORE INTRODUCTION: May I

please speak to (FILL NAME FROM Q.S5}?

[GOVERNMENT CODING: DON'T KNOW = 8 OR 98 AND REFUSED = 9 OR 99}

[1 OUT OF 10 RESPONDENTS WHO DO NOT SCREEN IN (Q.S1=2/D/R AND

Q.S2=2/D/R)WILL BE ASKED DEMOGRAPHIC QUESTIONS ONLY. THESE ARE.

CONSIDERED SHORT COMPLETES.]

2/70

QUOTAS:

1 PURCHASERS (Q.S1=1 AND Q.S3=1)

2 WILL PURCHASE (PLANNERS) (Q.S2=1 AND Q.S3=1)

3 SHORT COMPLETES (Q.S1=2/D/R, Q.S2=2/D/R AND COMPLETED DEMOGRAPHICS)

[AFTER WE HAVE REACHED THE QUOTA FOR EITHER ONE OF THESE CATEGORIES, WE DO

NOT WANT TO ASK THAT QUESTION ANYMORE. FOR EXAMPLE, IF WE REACH OUR

COMPLETES FOR PURCHASERS, WE DO NOT WANT TO ASK Q.S1 ANYMORE. WE WILL JUST

ASK Q.S2 FOR ALL RESPONDENTS FROM THAT POINT ON.]

[IF QUOTA FOR PURCHASERS IS FULL, SKIP TO Q.S2]

2/71

SI. In the past six months have you or someone else in your household

purchased or leased a NEW car, truck, van, or sport utility vehicle?

By new we mean Model Year 1998, 1999 or 2000. Please do not include

the purchase of a "used" vehicle.

1

2

8

9

Yes

No

Don't know

Refused

192
[IF Q.S1 = 1, SKIP TO Q.S3.]

2/72

S2. In the next three months, do you or does anyone else in your household

plan to purchase or lease a NEW car, truck, van, or sport utility

vehicle? Remember, by new we mean Model Year 1998, 1999 or 2000 .

Please do not include the purchase of a "used" vehicle.

1

2

8

9

Yes

No

Don't know

Refused

[IF S2 = 1, CONTINUE. IF Q.S2 = 2, 3, D OR R, SKIP 1 OUT OF EVERY 1O

RESPONDENTS TO Q.D1, TERMINATE ALL OTHERS.]

2/75

[IF Q.S2 = 1, FILL VERBIAGE IN PARENTHESES]

S3. Are you the person who was (will be) most responsible for making that

purchase or lease decision? (INTERVIEWER: IF MORE THAN ONE PERSON

RESPONSIBLE, ASK TO SPEAK TO THE ONE WHO LAST HAD A BIRTHDAY).

1

2

8

9

Yes

No

Don't know

Refused

[IF Q.S3 = 1, SKIP TO Q.I. IF Q.S3 = D OR R, TERMINATE]

[IF Q.S2 = 1, FILL VERBIAGE IN PARENTHESES]

S4. May I please speak to the person who was (will be) most responsible

for making that purchase or lease decision?

1 Yes, person is coming to the phone

2 No, person is not available right now

8 Don't know

9 Refused

[ I F Q.S4 = 1 , REPEAT INTRODUCTION AND RE-ASK Q.S 1 AND Q.S2. ]

[ I f Q.S4 = D OR R, TERMINATE.]

193
S5. May I please have that person's name so that when I call back I know

who to ask for? (INTERVIEWER: ASK WHEN IS THE BEST TIME TO REACH THIS

PERSON.]

[SET UP CALL BACK]

01. I am going to read you a number of reasons why people choose to buy

or lease a new vehicle. For each one, please tell me whether or not

it is an important reason why you would buy or lease a new vehicle?

(READ ITEM) Is that an important reason or not an important reason

why you would buy or lease a new vehicle?

Yes, important 1

No, not important 2

Don't know 8

Refused 9

[ROTATE LIST OF ATTRIBUTES]

How the vehicle drives

The style or look of the vehicle

That it is made in the USA or Canada

That it is a foreign vehicle

The price of the vehicle

The reliability

The fuel economy

The vehicle size

Optional equipment

It's the brand I always buy

Brand Image

Safety

Dealer Reputation

Manufacturer Reputation

Cargo Capacity

3/8

3/9

3/10

3/11

3/12

3/13

3/14

3/15

3/16

3/17

3/18

3/19

3/20

3/21

3/22

A

B

C

D

E

F

G

H

I

J

K

L

M

N

0

194
[REPRESENT ATTRIBUTES CHOSEN AS IMPORTANT IN Q.01 (ATTRIBUTE=CODE 1); IF

ONLY ONE RESPONSE IN Q.01, INSERT RESPONSE FROM Q.01 INTO Q.02 AND SKIP TO

Q.03]

[ACCEPT ONLY ONE RESPONSE]

3/23-24

02. Of those you mentioned as important, what is the most important reason

you would choose to buy or lease a new vehicle? (INTERVIEWER: READ

LIST, IF NECESSARY. ACCEPT ONLY ONE RESPONSE.)

01 How the vehicle drives

02 The style or look of the vehicle

03 That it is made in the USA or Canada

04 That it is a foreign vehicle

05 The price of the vehicle

06 The reliability

07 The fuel economy

08 The vehicle size

09 Optional equipment

10 It's the brand I always buy

11 Brand Image

12 Safety

13 Dealer Reputation

14 Manufacturer Reputation

15 Cargo Capacity

16 Other (SPECIFY)

98 Don't know

99 Refused

For the next few questions, I'd like you to answer by using a scale from 1

to 7, where "1" means not at all important and "7" means very important. You

may use any number in between.

3/25

03. When buying or leasing a new vehicle, how important is it to you to

know in what country the vehicle's parts are manufactured? (IF

NECESSARY READ: Please use a scale from to 1 to 7, where "1" means not

at all important and "7" means very important.)

1 Not at all important

2

3

4

5

6

7 Very important

8 Don't know

9 Refused

195
[ASK HALF OF THE RESPONDENTS Q.04 AND HALF Q.05]

3/27

04. Again, using the same 1 to 7 scale, please rate how important it is

to you to know the percentage of the parts that were manufactured in

one country versus another country? For example, 70 percent of the

parts were manufactured in Country A and 30 percent of the parts were

built in Country B. (IF NECESSARY, READ: A "1" means not at all

important and "7" means very important).

1 Not at all important

2

3

4

5

6

7 Very important

8 Don't know

9 Refused

[IF ASKED Q.04, SKIP TO Q.06]

3/28

05. Again, using the same 1 to 7 scale, please rate how important it is

to you to know the percentage of the parts that were manufactured in

one country versus another country? For example, 70 percent of the

parts were manufactured in the United States and 30 percent of the

parts were built in Japan. (IF NECESSARY, READ: A "1" means not at all

important and "7" means very important).

1 Not at all important

2

3

4

5

6

7 Very important

8 Don't know

9 Refused

196
3/29

06. Using the same 1 to 7 scale, please rate how important it is to you

to know in what country the entire vehicle is built? (IF NECESSARY,

READ: A "1" means not at all important and "7" means very important).

1

2

3

4

5

6

7

8

9

Not at all imp

Very important

Don't know

Refused

[IF Q.S1=1 ASK Q.07, OTHERWISE SKIP TO Q.ll]

3/30-36

3/37-43

3/44-50

[ACCEPT UP TO 3 RESPONSES]

07. What is the make and model of the vehicle that you bought or leased

in the last six months? Please tell me about new vehicles only, that

is Model Year 1998, 1999 or 2000 vehicles. (IF RESPONDENT

PURCHASED/LEASED MORE THAN ONE VEHICLE IN THE LAST SIX MONTHS RECORD

ALL. )

INSERT NEW CARS AND LIGHT TRUCKS MAKE/MODEL LIST

[IF ONE RESPONSE IN Q.07, SKIP TO Q.09]

[IF MORE THAN ONE RESPONSE IN Q.07 ASK Q.08; REPRESENT RESPONSES FROM Q.07]

3/75

08. Which of these vehicles did you purchase most recently? (IF RESPONDENT

SAYS VEHICLES WERE PURCHASED ON THE SAME DAY ASK: Which vehicle do you

drive most often?)

197
3/76-77

09. What country do you think this vehicle was made in? (DO NOT READ LIST)

01

02

03

04

05

06

07

08

09

10

11

98

99

United States/U.S./America

Japan

Germany

Korea

Mexico

Italy

England/Great Britain

Canada

Venezuela

France

Other (SPECIFY)

Don't know

Refused

4/18

10. Did you purchase or lease this vehicle directly from a dealer or did.

you go through a service where you didn't have to go to a dealer?

1 Through dealer

2 Not through dealer

8 Don't Know

9 Refused

[IF Q.S2=1 ASK Qll . OTHERWISE, SKIP TO Q.13]

198
4/19-25

4/26-32

4/33-39

[ACCEPT UP TO 3 RESPONSES]

11. What are the makes and models of the vehicles that you are thinking

about buying or leasing in the next three months? Please tell me

about new vehicles only, that is Model Year 1998, 1999 or 2000

vehicles.

INSERT NEW CARS AND LIGHT TRUCKS MAKE/MODEL LIST

4/64

12. Are you planning to purchase or lease your vehicle directly from a

dealer or do you plan to go through a service where you wouldn't have

to go to a dealer?

1 Through dealer

2 Not through dealer

8 Don't Know

9 Refused

199
[REPRESENT ATTRIBUTES CHOSEN AS IMPORTANT (ATTRIBUTE=CODE 1) IN Q.01 AND

ITEM P (US/CANADIAN PARTS CONTENT LABEL.) ITEM P SHOULD APPEAR FOR EVERY

RESPONDENT. ROTATE ATTRIBUTES. USE VERBIAGE IN PARENTHESES IF Q.S2=1]

13. I am going to read you a list of factors people consider when buying

or leasing a new vehicle. Please rate each one using a 1 to 7 scale,

where "1" means it was (is) not at all a factor and "7" means it

was(is) a very important factor to you when you bought (will buy) your"

last (next) vehicle. Here's the first: (READ ITEM:)

Not at all a factor

4/67

4/68

4/69

4/70

4/71

4/72

4/73

4/74

4/75

4/76

4/77

4/78

4/79

4/80

5/08

5/09

1

2

3

4

5

6

7

8

9

A.

B.

C.

D.

E.

F.

G.

H.

I."

J.

K.

L.

M.

N.

0.

P.

Very important factor

Don't know

Refused

How the vehicle drives

The style or look of the vehicle

That it is made in the USA or Canada

That it is a foreign vehicle

The price of the vehicle

The reliability

The fuel economy

The vehicle size

Optional equipment

It's the brand I always buy

Brand Image

Safety

Dealer Reputation

Manufacturer Reputation

Cargo Capacity

The U.S./Canadian parts content label

5/10

14. Are there any other factors that I did not mention that you consider"

to be very important?

Yes

No

Don't know

Refused

1

2

8

9

[IF Q.14 =2 , D OR R, SKIP TO Q.16.]

200
8/46-47 thru 8/52-53

15. What are these factors?

(INTERVIEWER: TYPE IN RESPONSE. PROBE AND CLARIFY.)

16. I am now going to read you a list of different makes of cars and

trucks. For each, please tell me in what country that vehicle is

built? Just give me your best guess. Here's the first:

01

02

03

04

05

06

07

08

09

10

11

98

99

United States/U.S./America

Japan

Germany

Korea

Mexico

Italy

England/Great Britain

Canada

Venezuela

France

Other, SPECIFY

Don't know

Refused

[ROTATE LIST]

5/15-16 A. Acura Integra

5/17-18

5/19-20

5/21-22

5/23-24

5/25-26

5/27-28

B.

C.

D.

E.

F.

G.

Jaguar

Toyota Camry

Volkswagon Jetta

BMW Z3

Chevy Blazer

Ford Explorer

201
5/50-51

5/52-53

5/54-55

[ACCEPT UP TO THREE RESPONSES]

17. How would you find out if a vehicle was built in U.S./Canada or

elsewhere? (DO NOT READ LIST)

01 Parts Content Label

02 Advertisement

03 Sales Brochure

04 Internet

05 Magazine Article

06 Newspaper Article

07 Discussions with other people

08 Other (SPECIFY)

98 Don't know

99 Refused

5/61

18. Have you heard or read about a law that requires car and truck dealers

and manufacturers to place a label on all new vehicles showing in what

country the vehicle and its parts were made?

1 Yes, have heard or read

2 No, have not heard or read

8 Don't know

9 Refused

5/62

19. Have you heard or read about the parts content label?

1 Yes, have heard or read

2 No, have not heard or read

8 Don't know

9 Refused

[IF Q.19 =2 , D OR R, SKIP TO Q.32.]

5/63

20. Have you ever seen this label?

1 Yes

2 No

8 Don't know

9 Refused

202
9/8-9 thru 9/14-15

21. What do you think the numbers on the label mean?

(INTERVIEWER: TYPE IN RESPONSE. PROBE AND CLARIFY.)

8 Don't know

9 Refused

22. To the best of your knowledge, is a part made in (READ COUNTRY)

included on the parts content label as being made in America, or not?

1 Yes

2 No

8 Don't know

9 Refused

5/68 A. Canada

5/69 B. Mexico

5/77

23. To the best of your knowledge, if a foreign car is built in the United

States, does the U.S./Canadian parts content label list it as a U.S.—

made or foreign-made vehicle?

1 U.S. made

2 Foreign-made

8 Don't know

9 Refused

5/78

24. In fact, the labor hours of workers in U.S. plants owned by foreign

companies does not count as U.S. content. Knowing that, would that

have made a difference to you when considering the type of vehicle to

purchase?

1 Yes

2 No

8 Don't know

9 Refused

203
5/79

25. When you went to the dealership did you read the U.S./Canadian parts

content label, or not?

1 Yes

2 No

3 Did not go to a dealership

8 Don't know

9 Refused

[IF Q.25 = 2, 3, D OR R, SKIP TO Q.33.]

5/80

26. How easy was the label to understand? Was it very easy to understand,

somewhat easy, not too easy, or not easy at all?

4 Very easy

3 Somewhat easy

2 Not too easy

1 Not easy at all

8 Do not recall/Don't Know

9 Refused

[USE VERBIAGE IN PARENTHESES IF Q. 08 WAS ASKED; INSERT RESPONSE FROM Q.8]

6/08

27. (When answering the following questions, please think only about the

purchase/lease of your [insert response from Q.08].)

Did the salesperson point out the U.S./Canadian parts content label

to you or did you come across it on your own?

1 Salesperson pointed it out

2 Came across it on own

8 Don't know

9 Refused

[IF Q.27 =2 , D OR R, SKIP TO Q.29.]

204
6/09

28. Did the salesperson explain to you what the U. S./Canadian parts

content label means?

1 Yes

2 No

8 Don't know

9 Refused

[IF Q.S2 = 1, USE VERBIAGE IN PARENTHESES]

6/10

~

n. How much influen<~=> did (has) the information on the label have (had)

•.•'•;•::• -"^.siderations? On a scale of 1 to 7, where

"1" .:.-__: j.i.- a "7 " means a great deal off

influence, please rate ;.o« .;.uc;. xni-Luence the label had (has had) o n

your purchase or lease consideration?

1 No influence at all

2

3

4

5

6

7 A great deal of influence

8 Don't know

9 Refused

[ASK Q. 30 IF Q.29 = 5, 6, OR 7. OTHERWISE SKIP TO Q.31.]

9/16-17 thru 9/22-23

30. In what ways did the information on the label influence your purchase

considerations?

(INTERVIEWER: TYPE IN RESPONSE. PROBE AND CLARIFY.)

205
[Ask Q.31 if Q. 27 = 1. OTHERWISE SKIP TO Q.32]

6/14

31. Did the salesperson make i t an important part of his/he r sale s

presentation t o you, or not?

1 Yes

2 No

8 Don't know

9 Refused

[ASK Q. 32 IF Q.19= 2, D, OR R. OTHERWISE, SKIP TO Q.33.]

6/15

32. Now that you are aware of the label, would the label influence yourr

future purchase of a vehicle?

1 Yes

2 No

8 Don't know

9 Refused

6/16

33. How often do you make it a point to "buy American" whether its cars

or any other items? Would you say always, sometimes, rarely or never?

1

2

3

4

8

9

Always

Sometimes

Rarely

Never

Don't know

Refused

The following questions are for classification purposes only:

6/17

Dl. Do you consider yourself to be the head of household? (INTERVIEWER:

IF RESPONDENT SAYS HE/SHE IS "CO-HEAD" OF HOUSEHOLD, ENTER A "1")

1 Yes

2 No

8 Don't know

9 Refused

[IF Q.D1 = 1, SKIP TO Q.D6.]

206
6/18-19

[ONLY ACCEPT 18 TO 97]

D2. What is the age of the person whom you consider to be the head of

your household? (IF NEEDED: Just your best estimate is fine.)

(ENTER NUMBER 18 TO 97; ENTER 97 IF R IS 97 YEARS OLD OR OLDER)

99 Refused

6/20

D3. What gender is that person?

1 Male

2 Female

9 Refused

6/21

D4. What is the last grade of school that the head of household

completed? (IF NEEDED: Just your best estimate is fine.)

1 8th Grade or Less

2 Some High School

3 Graduated High School

4 Trade or Technical School

5 Some College

6 Graduated College

7 Post-graduate

8 Don't Know

9 Refused

6/22-23

D5. Is that person of Hispanic origin or background?

(IF "YES," ASK:) Is that person White Hispanic or Black Hispanic?

(IF "NO," ASK:) Is that person white, black or African-American, or

some other race?

01 White/Caucasian

02 Black/African American

03 White Hispanic

04 Black Hispanic

05 Hispanic (no race given)

06 Other (SPECIFY)

99 Refused

207
6/24-25

[DO NOT ALLOW 00 FOR NUMBER OF ADULTS]

D6. Counting yourself, how many adults live in your household? (PROBE

DID THAT INCLUDE YOURSELF?)

ADULTS (CANNOT BE LESS THAN ONE)

99 Refused

6/26-28

D7. Of those adults, how many are male?

MALES

99 Refused

6/29-31

D7. Of those adults, how many are female?

FEMALES

99 Refused

[AFTER RESPONSE, CALCULATE: NUMBER OF MALES PLUS NUMBER OF FEMALES IN

Q.D7 MUST EQUAL TOTAL NUMBER OF ADULTS IN Q.D6]

[IF SHORT COMPLETE (S2=2, 3, D or R) AND Q.D1 = 2, 3, D OR R, SKIP TO

Q.D14.]

6/32

D8. What was the last grade of school you completed?

1 8th Grade or Less

2 Some High School

3 Graduated High School

4 Trade or Technical School

5 Some College

6 Graduated College

7 Post-graduate

8 Don't Know

9 Refused

208
[VALID RANGE IS 1900 - 1980; AFTER RESPONSE, CALCULATE AGE AND INSERT IN

Q.D10]

6/35-36

Calculated Age

0 to 97

98 Don't know

99 Refused

6/37-40

D9. In what year were you born?

9998

9999

6/41

DlOa

Dorft Know

Refused

•

1

2

9

Just to

Yes

No

Refused

Just to confirm, you are [INSERT AGE] years old?

[IF Q. DlOa = 2, CONTINUE. OTHERWISE, SKIP TO INSTRUCTION ABOVE D.lla.]

6/42

DIOb. Then you must be [INSERT AGE] years old?

1 Yes

2 No

9 Refused

[IF SHORT COMPLETE (Q.S2 =2, 3, D, OR R) , SKIP TO Q.D13**

9/26-28

Dlla. What is your occupation or job title ?

(INTERVIEWER: TYPE IN RESPONSE. PROBE AND CLARIFY.)

98 Don't know

99 Refused

209
NOT CODED

Dllb. What are your duties?

(INTERVIEWER: TYPE IN RESPONSE. PROBE AND CLARIFY.)

8 Don't know

9 Refused

9/29-31

Dllc. In what business or industry is this?

(INTERVIEWER: TYPE IN RESPONSE. PROBE AND CLARIFY.)

98 Don ' t know

99 Refused

6/52

D12. Would you describe the area in which you live as a: (READ LIST)

1 Large city

2 Suburb of a large city

3 Small town

4 Or rural area

DO NOT READ BELOW

8 Don't Know

9 Refused

6/53-54

D13. Are you of Hispanic origin or background?

(IF "YES," ASK:) Are you White Hispanic or Black Hispanic? (IF

"NO," ASK:) Are you white, black or African-American, or some other

race?

01 White/Caucasian

02 Black/African American

03 White Hispanic

04 Black Hispanic

05 Hispanic (no race given)

06 Other, SPECIFY

99 Refused

210
6/55

D14. If you added together the yearly incomes, before taxes, of all the

members of your household for last year, 1997, would the tota l be:

(READ LIST)

1 Less than $30,000, or

2 More than $30,000

DO NOT READ BELOW

8 Don't Know

9 Refused

[IF Q.D14 = 2, SKIP TO Q. D16. IF Q.D14 = D OR R, SKIP TO Q.D17.]

6/56

D15. Would that be: (READ LIST)

1 Under $20,000

2 Over $20,000 but less than $30,000

( DO NOT READ BELOW

8 Don't Know

9 Refused

[ IF Q.D15 WAS ASKED, SKIP TO Q.D17]

6/57

D16. Would that be: (READ LIST)

$30,000 but less than $50,000 1

$50,000 but less than $75,000 2

$75,000 but less than $100,000 3

Or more than $100,000 4

DO NOT READ BELOW

8 Don't Know

9 Refused

6/58

D17. (INTERVIEWER: RECORD GENDER. I F NECESSARY SAY: I am recordin g tha t

you ar e INSERT GENDER.)

1 Male

2 Female

211
Those are all the questions I have. Thank you very much for your time

and cooperation. Have a good evening.

212
APPENDIX E

MANUFACTURER SURVEY QUESTIONNAIRE

Questions no. 17 in Part A and no. 20 in Part B of the manufacturer survey were not used in the

analyses of this report.

213
National Highway Traffic Safety Administration

New Vehicle Labeling Study

Manufacturer Survey

Thank you very much for taking the time to fill out this

survey. Your input is important to us. Please read each

question carefully and check the response that most

closely represents your, views or record your response in

the space provided. You will also find specific

instructions in bold print; please read them carefully.

OMB NO: 2127-0593

EXPIRATION DATE: 8/31/2001

214
Part A. Sales/Customer Relations

1. What is your job title?

2. What tnake(s) of vehicle(s) do you manufacture?

3. On a scale of 1 to 7 where 1 means "not at all a factor" and 7 means "a very

important factor", in your opinion, how much is US/Canadian parts content a factor

in selling vehicles in the United States?

Very

Not at all important

a factor 6ctor Don't Know

D i G 2 D3 G4 G5 Ge G7 G Y

4. What percentage of customers do you think is aware of the existence of parts content

information labels?

5. Did you give dealers any guidelines or materials for training sales staff to explain the

information on the parts content label?

G 1 Yes

G 2 No -*- Skip to Question 6

G Y Don't know

5a. What did you provide them with? Please enclose if available.

6. Do you encourage or require dealers to make customers aware of parts content

information labels?

G 1 Yes-*- Skip to Question 7

C 2 No

G Y Don't know

215
6a. Have you ever done this?

• I Yes

• 2 No-•Skip to Question 7

D Y Don't know

6b. In what month and year did you discontinue this practice?

Month Year

Why?

7. Do you provide dealers with any guidance or recommendations for using the parts

content information label as a selling point?

G 1 Yes -»- Skip to Question 8

• 2 No

• Y Don't know

7a. Have you ever done this?

D 1 Yes

D 2 No-»» Skip to Question 8

D Y Don't know

7b. In what month and year did you discontinue this practice?

Month Year

Why?

8. Do you provide customers with information about US/Canadian parts content in

addition to the label?

C 1 Yes -*• Skip to Question 9

C 2 No

D Y Don't know

216
8a. Have you ever done this?

• 1 Yes

• 2 No -••Skip to Question 10

D Y Don't know

Sb. In what month and year did you discontinue this practice?

/

Month Year

Why?

9. How do/did you provide information to customers about US/Canadian parts content?

(Please check all that apply.)

D 1 Through a brochure/guide

D 2 Provide an 800 number on the label inviting questions

• 3 Through advertising

D 0 Other, Please specify:

D Y Don't know

10. Is "Built in America" or some other reference to America used in your advertising

strategies?

Q 1 Yes-*• Skip to Question 11

D 2 No

D Y Don't know

10a. Have you ever done mis?

D 1 Yes

G 2 No-»» Skip to Question 12

• Y Don't know

10b. In what month and year did you discontinue this practice?

Month Year

Why?

217
11. In which of the following do/did you show parts content information ?

(Please check all that apply.)

D 1 In-store displays

• 2 Brochures

D 3 Newspaper ads

0 4 Magazine ads

D 5 Television ads

D 6 Radio ads

C 0 Other, Please specify:

G 9 None

D Y Don't know

12. Do you have any data or experience that suggests US/Canadian parts content is

important to consumers?

D 1 Yes

D 2 No

D Y Don't know

13. Have you developed a consumer guide to US/Canadian parts content for dealers to

give to customers?

D 1 Yes

G 2 No

D Y Don't know

14. Do you think parts content information labels are understandable to the customer?

D 1 Yes

• 2 No

D Y Don't know

15. What feedback, if any, have customers, dealers or suppliers given to your company

about the labels?

16. What suggestions do you have for making the parts content information label clearer,

more understandable, or more useful to consumers?

218
17. In the future, do you think the labeling regulation should be maintained, changed or

eliminated?

D 1 Maintained

D 2 Changed

• 3 Eliminated

• Y Don't know

Please explain:

219
Part B. Finance/Accounting

1. What is your job title?

2. What significant shifts in content or assembly, if any, did you undertake in the five

years prior to 1995?

2a. Were any of these motivated by American Automobile Labeling Act? •

D 1 Yes

0 2 N o • • •

D Y Don't know

3. Have you recently shifted any of your product lines, or component parts from

production outside your country to production in your country?

• 1 Yes

G 2 No-*- Skip to Question 4

Q Y Don't know

2'20
3a. What factors contributed to this shift? You may add a narrative explanation

below.

(Please check all that apply.)

D 1 Cost of labor

• 2 Quality of labor

• 3 Availability of human resources

• 4 Cost of materials

• 5 Quality of materials

D 6 Availability of materials

• 7 Availability of physical plant/equipment

D 8 Operating costs

D 9 Distribution costs

D 0 Wanted to create jobs for Americans

C 1 Wanted vehicles to have higher US/Canadian parts content

D 2 Customer demand

D 3 Parts content information labels

D 4 Currency exchange rate

D 5 Import duties

U. 6 Taxes

G 7 Availability of credit to invest in physical plant

D 8 Government policies of home country

D 9 Federal, State or local incentives to invest in the United States

D 0 Other reasons. Please specify:

Answer 3b if you checked more than one response in question 3a.

3 b. What were the three most important factors contributing to the decision to shift

from production outside of your country to production in your country?

2)

3)

4. Have you recently shifted any of your product lines, or component parts from production in your country to production outside of your country?

D 1 Yes

C 2 No -*- Skip to Question 5

G Y Don't know

221
4a. What factors contributed to this shift? You may add a narrative explanation

below.

(Please check all that apply.)

D 1 Cost of labor

D 2 Quality of labor

D 3 Availability of human resources

D 4 Cost of materials

D 5 Quality of materials

D 6 Availability of materials

D 7 Availability of physical plant/equipment

D 8 Operating costs

D 9 Distribution costs

D 0 Customer demand

D 1 Parts content information labels

D 2 Currency exchange rate

D 3 Import duties

D 4 Taxes

D 5 Availability of credit to invest in physical plant

C 6 Government policies of home country

D 0 Other reasons. Please specify;

Answer 4b if you checked more than one response in question 4a.

4b. What were the three most important factors contributing to the decision to shift

from production in your country to production outside of your country?

1) ;

2) ;

3)

5. On a scale of 1 to 7 where 1 means not at all a factor and 7 means a very important

factor, how much of a factor is the currency exchange rate relationship in your decision on where to produce auto parts and vehicles?

Very

Not at all important

a factor factor Don't Know

Dl G2 C3 G4 G5 C6 C7 DY

222
6. Have any fleet vehicle purchasers expressed an interest in the parts content

information labels?

D I Yes

D 2 No

• Y Don't know

7. Have any fleet vehicle purchasers indicated a preference for vehicles with high

US/Canadian parts content?

• 1 Yes

• 2 No

D Y Don't know

8. What is your estimate of the overall cost to implement the American Automobile

Labeling Act?

D 1 Less than $250,000

• 2 $250,000 to less than $500,000

G 3 $500,000 to less than $100,000

D 4 $1 million to less than $2 million

D 5 $2 million to less than $3 million

D 6 $3 million to less than $4 million

D 7 $4 million to less than $5 million

G 8 $5 million to less than $6 million

O 9 Over $6 million

G Y Don't Know

8a. Please explain costs, with confidential information if desired.

9. How many hours were spent on the startup to implement the AALA?

Hours

9a. How much did the AALA startup cost?

D 1 Less than $100,000

G 2 $100,000 to less than $200,000

Z 3 $200,000 to less than $300,000

G 4 $300,000 to less than $400,000

Z 5 $400,000 to less than $500,000

u 6 Over $500,000

G Y Don't Know

223
9b. Please explain costs, with confidential information if desired.

10. How many hours are spent annually for continued operating and maintenance costs?

Hours

10a. How much do you spend annually on ongoing data collection and

maintaining the database for the content reporting requirements for the

American Automobile Labeling Act?

D 1 Less than $20,000

I 2 $20,000 to less than $40,000

G 3 $40,000 to less than $60,000

D 4 $60,000 to less than $80,000

G 5 $80,000 to less than $100,000

D 6 Over $100,000

D Y Don't Know

10b. Please explain costs, with confidential information if desired.

11. Is the cost for data collection and maintaining the database for the content reporting

requirements for the American Automobile Labeling Act higher, lower or about the

same as the costs incurred for the North American Free Trade Agreement?

D 1 Higher

• 2 Lower

\2 3 About the same

C Y Don't know

224
12. Is the cost for data collection and maintaining the database for the content reporting

requirements for American Automobile Labeling Act higher, lower or about the same

as the costs incurred for data collection for assigning passenger cars to domestic or

import fleets for the Corporate Average Fuel Economy Agreement?

D 1 Higher

D 2 Lower

• 3 About the same

D Y Don't know

13. Thinking about the Model Year 1994 vehicles you manufactured, what is your

estimate of their US/Canadian parts content? Using American Automobile Labeling

Act definitions, please estimate each carline's US/Canadian parts content

Carline US/Canadian Parts Content

225
14. Do your suppliers use a single form for reporting information required for the

NAFTA, CAFE, and the AALA, thus reducing suppliers' reporting costs?

• 1 Yes

D 2 No

• Y Don't know

15. Based on information received from suppliers, what kinds of costs are imposed on

suppliers as a result of this American Automobile Labeling Act?

(Please check all that apply.)

Annual employee hours

Payroll costs

Set-up and maintenance of computer database

Cost of paper certificates

Other. Please specify:

Don't know

16. What is your estimate of the overall cost of this program to suppliers?

$ •

17. Do all of your purchase orders to suppliers include a requirement to furnish

US/Canadian parts content information?

D 1 Yes

• 2 No

D Y Don't know

18. What percent of suppliers furnish US/Canadian parts content information?

D

D

D

D

D

D

1

2

3

4

0

Y

19. By what percentage will your costs change following the end of the two-year

provision which allows flexibility in making estimates of content determinations

where outside suppliers have not responded to requests for content information?

226
2 0. In the future, do you think the labeling regulation should be maintained, changed

or eliminated?

LJ 1 Maintained

U 2 Changed

U 3 Eliminated

G Y Don't kno w

Please explain:

Thank you for taking the time to fill out this survey.

Please return it in the enclosed, postage-paid envelope.

If you should misplace the return envelope, please mail your questionnaire to:

Chikon Research Services

410 Horsham Road, P.O. Box 189

Horsham, PA 19044-9399

227

APPENDIX F

DEALER SURVEY QUESTIONNAIRE

Questions no. 22 in the dealer survey was not used in the analyses of this report.

229
National Highway Traffic Safety Administration

New Vehicle Labeling Study

Dealer Survey

Thank you very much for taking the time to fill out this survey. Your

input is important to us. Please read each question carefully and

check the response that most closely represents your views or record

your response in the space provided. You will also find specific

instructions in bold print; please read them carefully.

OMB NO: 2127-0593

EXPIRATION DATE: 8/31/2001

230
The American Automobile Labeling Act (AALA) provides that all new passenger cars and light trucks

manufactured on or after October 1, 1994, bear labels providing information regarding their US/Canadian

and non-US/Canadian parts content. The AALA does not require dealers or sales staff to make customers

aware of the parts content label, use parts content information as part of their sales presentation or

provide customers with additional parts content information. However, we are interested in learning the

extent to which dealers and sales staff use the content label information.

The next several questions will be about the parts content information label. Please read each question

carefully and check the response that most closely represents your and your franchise's views. You will

also find specific instructions next to several questions; please read them carefully.

1. How aware are you of the AALA and the US/Canadian parts content information label?

D 1 Very aware

D 2 Somewhat aware

d 3 Not very aware

C] 4 Not aware at all-» If you checked "not aware at all" skip to Q.14.

2. Please rate each of the following statements on a scale of 1 to 7 where 1 means the statement

"describes none of my customers" and 7 means the statement "describes all of my customers."

(You may also use any number in between.)

None of my All of my Don't

customers customers Know

a. Customers are aware of the

existence of parts content

information labels. D i D2 D 3 O 4 D5 D 6 D 7 D Y

b. Customers read the parts

content information label on the

vehicle window. D l D2 • 3 D 4 D5 D 6 D 7 Ll Y

c. Customers ask questions about

the information on the parts

content labels. D l D2 D 3 D 4 D 5 D 6 D7 D Y

d. Customers understand the

parts content label.

Di D2 D3 D4 D5 D6 D7 IHY

231
3. Please rate each of the following statements on a scale of 1 to 7 where 1 means "strongly

disagree" and 7 means "strongly agree." (You may also use any numbe r in between.)

Strongly Strongly Don't

disagree agree KLnow

a. Customers consider

US/Canadian parts content an

important factor for selecting a • i D2 • 3 • 4 D5 D 6 D 7 • Y

vehicle.

b. Customers consider the

information on the parts content

label when making a purchase

decision. D l D2 • 3 • 4 • 5 • 6 • 7 • Y

c. Customers show a preference in

"buying American." [j.i fj 2 D3 D4 D5 D6 D7 D y

d. Customers show a preference in

buying foreign. fj j rj 2 rj 3 rj 4 rj 5 -j fi fj 7 Q y

e. Customers are more interested

in the purchasing or leasing price

of an automobile than the

information on the parts content

label. Di D2 D3 D4 D5 D6 Ui DY

4. Which aspect of the parts content label do you think customers are most interested in?

(Please check just one response.)

D 1 United States/Canadian parts content

D 2 Major sources of non-US/Canadian parts content

d 3 Final assembly point

D 4 Country of origin of engine parts

n 5 Country of origin or transmission parts

C3 0 Other, please specify:

• 9 Non e

• Y Don't Know

5. Have customers expressed concern because the parts content information label combines

US and Canadian as domestic content?

• 1 Ye s

• 2 No

• Y Don't Know

232
6. Has a customer ever declined to purchase a vehicle as a result of the kind of information

provided on the parts content label?

• 1 Yes

• 2 No

• Y Don't know

Answer 6a if you checked "Yes" in question 6.

6a. To the best of your knowledge, how many times has this happened?

7. Has a customer ever decided to purchase a vehicle as a result of the kind of information provided

on the parts content label?

• 1 Yes

• 2 No

d Y Don't know

Answer 7a if you checked "Yes" in question 7.

7a. To the best of your knowledge, how many times has this happened?

8. Please rate each of the following statements on a scale of 1 to 7 where 1 means the statement

"does not describe my sales staff at all" and 7 means the statement "describes my sales staff

completely." (You may also use any number in between.)

Does not Describes Don't

describe at all completely Know

a. The sales staff is aware of the

parts content information labels. D1 D 2 D3 D4 D 5 D6 O 7 DY

b. The sales staff understands the

information on parts content

information labels. D l D2 D3 D4 D 5 D6 D 7 D Y

c. The sales staff can effectively

explain the parts content information

labels to customers. D l D2 CI3 D4 D 5 D e d 7 D Y

d. The sales staff keeps updated on

parts content information. • ] Q2 • 3 CD 4 • 5 • 6 Q 7 D Y

233
9. Under what circumstances are sales staff told to explain parts content information labels

to customers?

D 1 Sales staff give the information to customers only when they inquire about it.

d 2 Sales staff give the information to customers without being asked.

L-1 3 Sales staff are not given any guidelines.

• Y Don't Know

10. What type of training are sales staff given to explain the information on the parts content label?

(Please check all that apply.)

D 1 Seminar

d 2 Workshop

n 3 Brochure

d 4 Sales Meetings

d 0 Other, please specify:

• 9 None

• Y Don't Know

11. Did manufacturers give you any guidelines or materials for training sales staff to explain the

information on the parts content label?

• 1 Yes

• 2 No

• Y Don't know

12. Did manufacturers provide any guidance or recommendations for using the parts content

information label as a selling point?

• 1 Yes

• 2 No

• Y Don't know

234
13. Please rate each of the following statements on a scale of 1 to 7 where 1 means "the sales staff

does this none of the time" and 7 means "the sales staff does this all of the time."

(You may also use any number in between.)

None of All of Don't

the time the time Know

a. The sales staff points out the

parts content information label to • j Q 2 D 3 D 4 D 5 D 6 HH 7 D Y

customers.

b. The sales staff makes the parts

content information label an

important part of its sales

presentations. D l D 2 • 3 D4 D 5 • 6 • 7 • Y

14. Does your franchise show parts content information in:

(Please check all that apply.)

tH 1 In-store displays

HI 2 Brochures

HI 3 Newspaper ads

D 4 Magazine ads

D 5 Television ads

G 6 Radio ads

D 0 Other. Please specify:

• 9 None

D Y Don't Know

235
15. On a scale of 1 to 7 scale, where 1 means "none of the time" and 7 means "all of the time," please

rate how often sales staff give customers the following information, apart from the label.

(You may also use any number in between.)

None of All of Don't

the time the time Know

a. The final assembly point of the

vehicle

- Di D2 • 3 • 4 D5 D 6 • 7 D Y

b. The country of origin of the

engine parts. D i D 2 D3 D4 D5 D6 D7 D Y

c. The country of origin of the

transmission parts. D l D2 D3 D4 D5 D6 D7 D Y

d. The percentage of US/Canadian

parts that comprise the vehicle. D j D2 D3 D4 D5 D6 D7 Q Y

e. The major sources of nonUS/Canadian parts content. D i D2 D3 D4 D5 D6 D7 • Y

236
16. Please rate the following statements on a scale of 1 to 7 where 1 means "strongly disagree" and 7

means "strongly agree." (You may also use any number in between.)

Strongly

disagree

Strongly

agree

Don't

Know

a. Parts content information labels

are used as a sales tool. Q2 D3 D4 D5 D6 D7 D y

b. Parts content information labels

are not involved in the sales

process. Di IH2 D3 D4 O5 D6 Ui D Y

c. The percentage of US/Canadian

parts content is used as a sales

tool. Di 2 D3 • 4 • 5 O 6 D7 D Y

d. The sales staff is likely to use

the parts content information label

in its sales presentation if the

vehicle was assembled in the

United States. l • 2 • 3 • 4 D5 D6 • 7 D y

e. The sales staff is likely to use

the parts content information label

in its sales presentation if a high

percentage of vehicle parts were

manufactured outside of the

United States. °1 °2 D3

„ „ _,

D5 D6 •?

D Y

f. Parts content information can be

harmful to making a sale. D l D2 D 3 D 4 D5 D 6 D Y

g. The sales staff is likely to point

out the parts content information

label if the United States is the

country of origin of the

transmission. Dl D2 D3 Us D 7 D Y

237
CLASSIFICATION QUESTIONS

17. What is your job title?

D 1 Sales Manager

D 2 General Manager

• 3 Dealer/Principal

D 0 Other. Please specify:

18. In Column A, please record the franchises you represent. In Column B, please record the annual

new vehicle sales revenue for each franchise.

Column A Column B

Franchise: $ , , .00

Franchise: $ , , .00

Franchise: $ , , .00

Franchise: $ , , .00

Franchise: $ , , -00

Franchise: $ , , .00

Franchise: r _ _ $ , , .00

Franchise: $ .00

19. What is the total gross annual new vehicle sales volume of your franchise?

D 1 Less than $25 million

• 2 $25 million to $49 million

D 3 $50 million to $100 million

D 4 Over $100 million

D Y Don't Know

238
20. How many people are on your new vehicle sales staff?

21. What suggestions do you have for making the parts content information label clearer, more

understandable, or more useful to consumers?

22. In the future, do you think the labeling regulation should be maintained, changed or eliminated?

O 1 Maintained

O 2 Changed

• 3 Eliminated

• Y Don't Know

Please explain.

Thank you very much for taking the time to fill out this survey. Please return it in the enclosed, postagepaid envelope by September 21,1998.

239