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The Most ‘American’ Car is a Toyota

13 December 2012 in Trading Ideas

Baseball, apple pie, and …Toyota?

Well, yes, if you’re looking to be completely accurate about the automaker that is responsible for the most American-made model.

A recent report by the National Highway Transportation Safety Administration has revealed that the Toyota Avalon, which is built in Georgetown, Ky., wins the title this year. Eighty-five percent of the car’s parts come from the US and Canada – a higher percentage than for any car made by a US-based automaker.

This designation isn’t entirely shocking when you consider the global nature of the manufacturing of autos and their parts. We’ve evolved to a point where the Ford Fusion is now made in Mexico, and Honda has celebrated its 30th year in the US.

And regardless of where they’re assembled, many carmakers are experiencing a sustained rebound – in both sales and stock prices. Sales in November rose 15% to 1.14 million vehicles, the highest level for that month since 2007.

While Hurricane Sandy was responsible for some percentage of the boost (due to consumers deferring purchases in the immediate aftermath of the storm), a Reuters article on Monday suggested that the auto industry could be heading toward the high end of General Motors’ (GM) industry forecast of 14 million to 14.5 milllion vehicles sold in the US in 2012.

That would also mark the strongest yearly performance since 2007, although it’s still significantly below that year’s level of 16.1 million vehicles.

The stable growth has also had a hand in driving automaker stocks recently. The That New Car Smell motif is up 2.5% in the past month.

Analysts are also expecting new-car demand to be driven by the increased age of the average car, which recently surpassed 11 years. At the same time, the aging fleet of US vehicles could also contribute to a rise in the stocks assembled in the Used Car Tune-up motif, which is down 2.1% in the past month.

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