Kogod Releases Annual Auto Index
The Kogod School of Business‘ Made in America Auto Index named the Ford F-Series pickup and the Chevrolet Corvette as the best consumer motor vehicles in the country. The Kogod index evaluates the domestic content of vehicles sold in the United States and accounts for production factors ignored in other indices. It also compensates for the drawbacks of using self-reported regulatory data as the only measure of determining the “American-ness” of a vehicle sold in the U.S.
“This index provides the public with a more accurate reflection of the true country of origin of a car and the impact of its purchase on the US economy,” said Associate Professor Frank DuBois, the index’s author and an expert in global supply chains. “And hopefully, it holds vehicle manufacturers accountable for the claims they make in marketing to U.S. consumers.”
The Kogod Made in America Auto Index named the following vehicles as the best of the best of 2014:
• F-Series Pickup, Ford (score: 87.5 out of 100)
• Corvette, Chevrolet (score: 87.5)
• Enclave, Buick (score: 86)
• Traverse, Chevrolet (score: 86)
• Acadia, GMC (score: 86)
• Acadia Denali, GMC (score: 86)
The Kogod index incorporated data from the American Automotive Labeling Act (AALA), relevant information such as the vehicle’s location of assembly, the company headquarters location and where research and development occurs into its calculation in its ratings. Specifically, in calculating the index, DuBois derived seven individual criteria scores per vehicle, based on publically available data. These weighted criteria include:
1. Profit Margin: Where the automaker’s global headquarters is located. This is relevant as profits from cars return to the shareholders in the home country. (6-percent)
2. Labor: Location of assembly, included as the money supports workers in this country. (6-percent)
3. Location of Research & Development activities: Essentially, where the headquarters is located. (6-percent)
4. Inventory, Capital and Other Expenses: the location of assembly. (11-percent)
5. Engine: The location of production. (14-percent)
6. Transmission: The location of production. (7-percent)
7. Body, Chassis and Electrical Components: The location of where they are made. (50 percent)
As the Kogod index reveals, automakers with a U.S.-based headquarters rated highly in terms of overall domestic content, largely because the profit derived from the vehicles’ sale was more likely to return to the U.S., and most R&D activities for these firms are located in the nation.
