Find by category:

Exhaust Notes

North American car production expected to rebound by 2018

Mexico leads the way as Japanese and German automakers build more of their popular models on this continent.

By Clifford Atiyeh Nov 30, 2012 9:22AM
Foreign automakers are hurrying to build more of their cars in North America, as they  hedge against a comparatively weak dollar and see potential to boost profits on best-selling models.

By 2018, total car production in North America is expected to exceed 17 million units, the first time since a record 17.2 million cars were built in 2000, according to a WardsAuto forecast provided to MSN Autos.

Since then, automakers consistently hit the 15-million mark until 2008, when the recession forced plant closures, cutbacks in worker shifts and an unprecedented drop in sales. Since then, North American light-duty car production has climbed from 8.5 million in 2009 to just over 13 million in 2011. Wards says it expects production to hit nearly 15.3 million by year's end.

"We don't expect demand to rebound as fast as you think it would coming out of a recession," Haig Stoddard, a Wards analyst, told MSN Autos.

'Oh, Mexico, it sounds so simple I've just got to go'

Mexico will lead the growth in North American production with an estimated 18 percent increase through 2018, Wards said, led by lower labor rates, favorable trade agreements with Latin America and easier access to those markets.

"Years ago, there was always questions about the quality that was coming out of Mexico, but now they've got some of the best assembly plants in the world," said Stoddard. "The number of free-trade agreements Mexico has around the world could turn into an advantage."

Currently, Mexico makes more than 2.8 million cars a year. The U.S., thanks to the Big Three, is still the overall leader and is forecast to grow by about 14 percent to 11.6 million cars. Canada is expected to decline by 4 percent, to about 2.3 million. General Motors, Ford and Chrysler together make up about 57 percent of all North American production.

But Japanese automakers are leading the surge. Nissan and Honda are opening two plants in Mexico for the Sentra in 2013 and the Fit in 2014. Mazda -- which is quitting a U.S. joint-venture plant with Ford, which built the Mazda6 -- is opening a new Mexican plant in 2014 to build the Mazda2, the Mazda3 and the next-generation Toyota Yaris. Mazda has made a little more than 1.7 million cars in North America since 1987.

Volkswagen will open a second Mexican plant by 2016 to build the next-generation Audi Q5 and likely the next A4. The automaker's original Puebla plant has been running since 1964, making it the oldest North American plant; it builds the Jetta and Beetle, and had built the original Beetle until 2003.

U.S. plant upgrades; Koreans may build more; Germans to move cautiously

Subaru will more than double production at its only North American plant in Lafayette, Ind., to 300,000 cars per year by 2016, according to company President Yasuyuki Yoshinaga. Currently, only the Legacy, Outback and Tribeca are made here. Subaru may even open a second plant, but nothing has been confirmed.

Nissan is upgrading its plant in Smyrna, Tenn., to build the Rogue and Murano by 2014 as well as the all-electric Leaf as early as next year. Among the Japanese, Nissan is the third-largest foreign automaker in North America, with more than 11 million cars made from 1983 through 2011, the latest numbers that Nissan made available. The company builds the Altima and most of its trucks at its two plants in Tennessee, with a third in Canada.

Mercedes-Benz will build the C-Class at its plant in Vance, Ala., in 2014, in addition to the M-, GL- and R-Class models, the last of which is no longer sold in the U.S. In 2015, the company will add a "new Mercedes-Benz model series" and may even build a second North American plant in the U.S. or Mexico by 2018. BMW hasn't announced plans to build more models at its Spartanburg, S.C., facility, but Wards predicts the automaker will ramp up North American production 32 percent by 2018, the greatest increase of any foreign automaker.

Still, Stoddard said the Germans are playing it safer than their Japanese and Korean competitors since they cannot hope to sell as many cars.

"I think it's kind of tough for the Europeans to really pull the trigger and do any more than what they've already announced," he said. "It's still a big investment, and the benefits from it right now, you're not going to see for three or four more years. By that time, exchange rates might have turned around for some unforeseen reason. The trend could go the other way, and it might be better to build overseas."

Korean automakers Hyundai and Kia are also likely to expand plants in the U.S. or build new ones in Mexico, he said. Hyundai has built cars in the U.S. since 2005 in Montgomery, Ala., including the Sonata and Elantra, while Kia has recently added the Optima to its West Point, Ga., plant, which opened in 2009 to build the Sorento. 

Toyota, Honda continue their reign over North America

Toyota has built more cars in North America than any foreign automaker – a whopping 25 million – since it opened its first plant in 1983. (While VW has built cars here since 1964, it did not contest Toyota's numbers, nor would it provide production data. Wards also had no information on its Mexican plant. While VW was also the first foreign automaker to open a U.S. plant, in 1978, the company shut it down in 1988 and didn't open its new plant in Chattanooga, Tenn., until 2011.)

Toyota has four plants, in Indiana, Mississippi, Kentucky and Texas, plus two in Canada and Mexico. Among its 12 locally made models are the best-selling Camry and Corolla, along with all of Toyota’s SUVs, crossovers and pickups. Together, they comprise 70 percent of the company’s sales in the U.S. Toyota has not planned to expand any further, although many industry watchers say the company may build the fourth-generation Prius and add more Lexus models (other than the RX) to its U.S. plants. 

Honda isn’t far behind, at more than 23 million total cars built in North America through this year. The company started a few months ahead of Toyota, in November 1982, and was the first Japanese automaker to open a plant in North America. Its original Marysville, Ohio, plant still builds the Accord and in recent years has added the Acura TL. Four other plants, in Ohio, Alabama, Indiana and Ontario, build other popular models, such as the CR-V and Civic, along with five more Acura models.

Dec 1, 2012 6:39AM
"You slam people that buy foreign vehicles yet you support companies that are outsourcing American jobs. Kind of hypocritical isn't it???"

Hypocritical to the extreme. My theory is that it has to do with lack of education.
Nov 30, 2012 1:00PM
Kudos to these foreign auto companies for bringing hundreds of thousands of jobs to the American people and for purchasing American materials to build with. Doing this supports many American owned companies and helps to pump billions of dollars into the U.S. economy.
  There are fools that blog here regularly that seem to think this is a terrible thing. I doubt the millions of Americans that rely on these companies to put food on their tables each week would agree with you.
  I still don't understand how foreign companies can come here to build cars and still make a nice profit but domestic auto manufacturers feel they need to produce American cars in foreign countries, using foreign materials, to sell to American people. The people that support the big three should boycott them until they bring those jobs back to the US. You slam people that buy foreign vehicles yet you support companies that are outsourcing American jobs. Kind of hypocritical isn't it???

Dec 1, 2012 6:09PM

Detroit should use the infrastructure and high number of skilled employees in their own backyard.


Selling American branded vehicles as "American" yet building them with foreign manpower, supplies and investing Billions in foreign infrastructure is more hypocritical and quite frankly Anti-American.


Getting to the root of the problem requires answering one question:


Why is Detroit choosing foreign over domestic sources?  













Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?
MSN Money


Cars are cool, and here at MSN Autos we love everything about them, but we also know they're more than simply speed and style: a car is an essential tool, a much-needed accessory to help you get through your day-to-day life. What you drive is also one of the most important investments you can make, so we'll help you navigate your way through the car buying and ownership experiences. We strive to be your daily destination for news, notes, tips and tricks from across the automotive world. So whether it's through original content from our world-class journalists or the latest buzz from the far corners of the Web, Exhaust Notes helps you make sense of your automotive world.

Have a story idea? Tip us off at