In the 1980s, many Americans were concerned by the idea of foreign investors, particularly from Japan, "buying up America." Today, the narrative has shifted dramatically. Foreign investment dollars are now a sought-after resource that state and local officials actively court. The federal government has even created the “Select USA” program to attract foreign investment.
The U.S. auto industry provides a compelling example of how Americans benefit from foreign investment. According to a report by Autos Drive America, international automakers, including those from Japan, Europe, and Korea, account for 45 percent of domestic vehicle production. According to the Japan Automobile Manufacturers Association, Japanese automakers produced more than 2.8 million vehicles in the United States in 2022. That’s more cars than in any other country overseas, with Japanese production in the United States beating their production in Europe by over a million cars. These companies invest because America is a champion of property rights, free trade, and economic freedom, among other factors. To put it simply, America is a great place to expand one’s business and invest one’s capital.
Foreign Investment in the U.S. Auto Industry: A Closer Look
To better understand the impact of foreign investment in the U.S. auto industry, let's delve into some specific examples:
Hyundai has made significant investments in the United States. Hyundai's plant in Alabama, which opened in 2005, represents an investment of $1.8 billion that employs more than 3,000 Americans. Alabama Secretary of Commerce Greg Canfield praised the plant, saying “Hyundai is a critical part of Alabama’s auto industry, which continues to produce impressive numbers of engines and vehicles each year.”
Toyota has invested over $28 billion in the United States and boasts 10 manufacturing plants across the country. Toyota directly employs more than 36,000 people in the U.S. and supports an additional 148,000 jobs through its dealerships. The company’s investment in the U.S. auto industry has been instrumental in promoting technological innovation and enhancing the competitiveness of the industry. Kentucky Governor Andy Beshear said of Toyota’s new Kentucky-based electric vehicle plant, “Toyota has long been a vital part of the automotive industry in the commonwealth, and now the company is positioned to help lead us into the future. I want to thank the company’s leaders for their commitment to our state’s incredible workforce, and I can’t wait to see what’s next for Toyota and Kentucky.”
BMW’s plant in Spartanburg, SC is its largest production facility in the world. The $9 billion dollar factory employs more than 11,000 Americans. BMW has not only created jobs, but also contributed to technological advancement in the U.S. auto industry. Kenneth Gist, the Mayor of Woodruff, SC, a suburb of Spartanburg, said, “Our community is grateful for this investment and this new partnership with BMW. We have invested in making our downtown, our housing market, our infrastructure, and now our education, top-notch... A very heartfelt thank you to the BMW Board of Management and all of the leaders in BMW who are willing to make this investment in our town. Here’s to our future together.”
The Future of the U.S. Auto Industry
American motor vehicle manufacturing has come a long way since the 1980s. Where once Americans saw the idea of foreign investment as "buying up America," the narrative today is starkly different. Foreign auto manufacturers have poured billions of dollars into American communities, catalyzing domestic production, spurring technological advancement, and generating employment.
The potential for future growth remains vast, so long as lawmakers safeguard the values America has always stood for. Economic freedom made America an attractive destination for global businesses and investment. In preserving that founding principle, we preserve the United States’s spirit of economic dynamism and innovation. The same policies that brought the U.S. its success and prosperity today will ensure its growth in the future.