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2 Signs That American-Made Is Back

It wasn't long ago that Detroit automakers were the butt of every joke in the automotive industry. Their arrogance and short-sightedness ran their businesses into the ground, leaving General Motors and Chrysler to be bailed out by the taxpayers; Ford (NYSE: F  ) the only automaker to survive on its own. Five years after the deepest recession seen in decades, the story has completely changed. Here are two pieces of proof that American-made vehicles are coming back stronger than ever.

Ford's Fusion

Ford's 2014 Fusion is a big reason for Ford's success this year. Photo credit: Ford.

The Fusion is definitely one of the biggest Detroit success stories in a decade. Japanese rivals Toyota (NYSE: TM  ) and Honda probably laughed at the idea, as did everyone else, that Ford could produce a smaller, fuel-efficient vehicle to compete in segments long dominated by the Japanese -- but Ford did just that. The Fusion's sales are up 13.4% through August and are on pace to do something only the F-Series has done in the past nine years for Ford: top 300,000 in annual sales.

Interior of Ford's 2014 Fusion. Photo Credit: Ford

Its sales would be even higher, except Ford can't keep enough supply of the vehicle on dealer lots! In key markets the flashy sedan is selling in 20 days -- three times faster than the industry average. While it's no fun losing potential sales, the lack of supply has left consumers little negotiating room, and the Fusion sells at a $1,176 premium to the industry average. The Fusion even sells at a $2,378 premium to the industry-leading Camry, which has dominated the market sales for 15 of the past 16 years. That's a night-and-day difference from when Ford had to sell its vehicles at a loss just to move them off dealer lots.

The Fusion isn't just popular with consumers; critics are also throwing awards at the car left and right.

  • U.S. News and World Report's "Best Car for the Money."
  • 2013 "Green Car of the Year" award from the Los Angeles Auto Show.
  • Kelley Blue Book's "Best Redesigned Vehicle" of the year.
  • U.S. News and World Report's 2013 "Best Cars for Families."
  • U.S. News and World Report's "Best Mid-Size Car" (for three straight years).

Fusion gains ground on Camry. Graph by author. Information credit: Automotive News DataCenter.

Ford's Fusion represents America's best chance to take the sales crown in a segment solely dominated by Japanese rivals. As you can see, it has a real chance going forward; that's one proof American-made vehicles are back. Here's another.

Tesla's Model S

Tesla's 2013 Model S. Photo credit: Tesla Motors.

Consumers and critics don't even know how to classify Tesla's groundbreaking Model S. Is it a luxury car, sports car, electric car, or all three combined? There's no other electric model capable of going from 0 to 60 mph in 4.2 seconds, a pretty impressive feat. One thing is for sure: Everyone loves the car, even with the ridiculous price tag that can start near $70,000. Consumer Reports even dubbed the car "off the charts," as it gave the flashy ride a 99 out of 100 score in the magazine's test -- one of the highest scores ever.

Interior of a Tesla Model S. Photo Credit: Tesla

Not only is the vehicle popular for its performance, but it's also one of the safest cars around. The National Highway Traffic Safety Administration awarded Tesla's Model S the highest overall vehicle safety score ever, recording a combined record of 5.4 stars.

The Model S captured 8.4% of the luxury segment halfway through 2013, which is remarkable, considering name-brand competitors have been in the market for decades longer. Tesla expects sales of its Model S to double next year as the company continues to ramp up production to meet demand.

The forward-looking company and impressive Model S vehicle have sent investors flying into the stock, sending it soaring this year.

TSLA Chart

TSLA data by YCharts.

Tesla's Model S is disrupting the way the automotive industry has worked for the past century, something no one thought was possible. This story is long from over, as Tesla will have to prove it can bring down costs to transform the Model S from a niche vehicle to sell to the masses. Right now the company will continue to build out its supercharger stations to relieve consumer anxiety about range. The vehicle currently gets between 230 and 300 miles per charge, depending on the vehicle upgrades.

If Tesla can indeed accomplish bringing costs down and building a supercharger network across the nation, we could be witnessing one of the greatest American-made innovations of our lifetime. Who would have guessed it'd be an electric vehicle a decade ago -- and an American one at that?

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