Capital Investment

Automakers Are Investing To Make America More Competitive

Automakers assemble more than 85 million new cars and light trucks each year, worldwide. Building new plants and maintaining their existing ones requires hundreds of billions of dollars of investment each year.

A recent study by the European Commission examined the capital investment (plants and equipment) by more than 2,500 of the world’s leading companies. It found that automakers and suppliers spent more on capital investment than pharmaceuticals and biotechnology, technology hardware producers, telecommunications companies, electrical utilities, chemical manufacturers, and mining companies.

 

Industry Ranking by CapEX Spending (2014 Data):
Of the Top 2,500 Companies in the World ($Billions)


 

FCA US, Ford and General Motors’ Capital Investment in the United States

Over the past six years alone, automakers have invested $48.1 billion in their U.S. assembly, engine and transmission plants, R&D labs, headquarters, administrative offices and other infrastructure that connects and supports them.

FCA US, Ford and General Motors made more than $30.8 billion of those $48.1 billion in investments (about 64%). Their investment in U.S. facilities is five times greater than all Japanese and Korean automakers combined. Together, Toyota, Honda, Nissan, Isuzu, Subaru, Suzuki, Mazda, Mitsubishi, and Hyundai-Kia invested only $5.9 billion during this same six-year period.

American automakers’ investment is five times greater than the combined investments of the three major European automakers competing in the U.S. (BMW, Daimler, and VW). Together, they invested only $5.9 billion over the past six years.

Building a new plant costs between $1 and 2 billion. Expanding a plant to allow for multiple platform production, or to take advantage of new process improvements, can cost several hundred million dollars. Both investments create jobs and help maintain America’s competitive advantage, but the new plant will generate hundreds of headlines, while existing plant improvements tend to go unnoticed.

FCA US, Ford and General Motors operate 28 assembly plants nationwide. They also operate more than 198 other factories, research labs, distribution centers and other facilities, located in 32 states across 115 Congressional Districts.

 

U.S. Capital Investment, in Billions (2009-2014)