Foreign carmakers are poised to assemble more vehicles in the United States than General Motors, Ford Motor and Fiat Chrysler combined. A recent Wall Street Journal story made a compelling case that the announcement that Toyota and Mazda will build a joint-venture plant in Alabama signals the end of Detroit dominance of U.S. vehicle production.
Without the burden of unions and the financial obligations to generations of retired workers, as well as the incentives offered by southern states, explained the WSJ story, foreign carmakers are rushing to increase market share while reducing risk by building more and more vehicles in this country. The strategy is working. Market share for the traditional domestic manufacturers dropped to 44 percent in 2017, from about 65 percent in 2000.
Toyota and Mazda’s $1.6-billion plant in Alabama follows the $1.1-billion Volvo South Carolina factory scheduled to open in 2018. Meanwhile BMW is expanding its production capacity in South Carolina, as Daimler (Mercedes-Benz) expands production in its Alabama facility. These commitments, stated the WSJ, will add 10,000 jobs and hundreds of thousands of units of U.S. production by 2021. There are already predictions that foreign-carmaker U.S. production will equal that of the three traditional domestic manufacturers in the first quarter of 2018.