Carmakers use Detroit Auto Show to talk up ‘Made in USA’ amid Trump’s tweetstorms

'Made in the USA' big among automakers: Specialist

Carmakers used the Detroit Auto Show to talk up their U.S. production, in a likely reaction to President-elect Donald Trump's all-hours tweet storms, an industry analyst said on Tuesday.

John Rosevear, senior auto specialist at The Motley Fool, told CNBC's "The Rundown" on Tuesday that it was a repeated theme at the annual auto show.

"It's clearly a new and big movement across the board," he said. "Every press conference, every discussion we have today, it seems like some executive from any of the automakers is at pains to talk about what they make in the U.S., how much they make in the U.S."

Rosevear noted that a VW conference highlighted that its SUVs were being made in Tennessee, while Toyota went so far as to display a Camry model with "Made in U.S.A." painted on the side.

"It's being talked up obviously at the Detroit-based automakers, but also at a lot of what we call the transplants, the overseas companies doing business here in the U.S. too."

Automakers new focus on flag-waving has followed a series of all-hours tweets from Trump lambasting, sometimes inaccurately, plans to produce vehicles in Mexico.

Trump has previously called Ford "horrible" for its plans to move all small-car production to Mexico within three years, and has threatened to impose a border tax on automakers which move production abroad.

Earlier this month, Ford announced that it was scrapping plans for a $1.6 billion plant in Mexico and instead would invest $700 million in the Flat Rock assembly plant in Michigan.

Ford Mustangs go through assembly at the Ford Flat Rock Assembly Plant August 20, 2015 in Flat Rock, Michigan.
Getty Images

On Monday, Ford CEO Mark Fields told CNBC that Trump's proposed tax or trade reforms would not influence Ford Motor's long-term goals. Fields said the company cancelled production of the plant because it "didn't need the capacity anymore."

In a tweet last week, Trump also criticized Japanese automaker Toyota Motor for plans to build a new plant in Mexico. In response to Trump's tweet, Toyota said in a statement to Reuters that the new Mexican plant will not cut its U.S. employment.

Also this month, Trump issued a separate ultimatum to General Motors: Make its Chevy Cruze cars in the U.S. or expect to pay a big border tax.

GM responded by saying it built the Cruze hatchback in Mexico for global markets with a very small amount sold in the U.S. Of the 190,000 Cruze cars sold in the U.S., 185,500 were built in Lordstown, Ohio, the company said.

The Motley Fool's Rosevear said it wasn't clear if automakers' "made in U.S.A." mantra was out of fear of being called out in a Trump tweet storm.

For one, automakers were highlighting that their decisions to shift production to the U.S. weren't in reaction to Trump.

"They're positioning it as something that just happened to come up this week," Rosevear said, although he added, "Enough times of hearing that and you have to think more is going on behind the scenes."

Certainly, however, it's unlikely that automakers were making billion-dollar production and factory-building decisions in the space of mere weeks.

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For example, FCA, the U.S. arm of automaker Fiat Chrysler, announced on Sunday that it would invest $1 billion in plants in Michigan and Ohio, which will add 2,000 new jobs in the U.S. The company said it was the second phase of a plan it first made public a year ago.

Fiat Chrysler CEO Sergio Marchionne said Monday the decision to announce the U.S. investments was "coincidental" to Trump's tweets, according to Reuters.

Additionally, the allure of making cars in Mexico isn't about to go away anytime soon.

Karl Brauer, senior director for automotive industry insights at Kelley Blue Book, told CNBC's "Squawk Box" on Tuesday that Mexico's trade agreements were a key attraction.

"You can build a vehicle in Mexico and you've got really good trade agreements with a wide portion of the globe," he said, adding that the U.S. needed better deals for markets "across the oceans," and not just with neighbors Canada and Mexico.

Brauer also noted that even with Trump's threatening language for the industry, automakers were likely to keep some production south of the border.

"As a car company, you have to be smart about which cars you build where," he said. "If you can build some of these small, low-priced cars where the labor is cheaper, you can still build the big ones here and make money and both products are profitable."

To be sure, while Trump has focused on whether cars were made in Mexico, the U.S.'s biggest automotive import from Mexico isn't cars — it's vehicle parts.

Under the free-trade deal NAFTA, the automotive industry increasingly became intertwined between the U.S., Canada and Mexico, resulting in an auto parts manufacturing boom south of the border.

The impact of that is clear in U.S. trade data. For instance, in the 10 months ended in October 2016, automotive vehicle and parts imports from Mexico totaled $89.6 billion, dwarfing the next biggest import nations, Canada with $54 billion and Japan, at $44 billion.

While vehicles were the main imports from Canada and Japan, more than half — $46.8 billion of the automotive-related imports from Mexico — were vehicle parts in that 10-month period. U.S. government data show that car parts imports into the U.S. nearly doubled in the past five years.

—Patti Domm, Javier E. David and Berkeley Lovelace Jr. contributed to this article.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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