Where are the Top US Automotive Manufacturing Plants Located & Why?

The US automotive manufacturing industry made about $863 billion – an all-time high – in 2022. Once the largest automotive manufacturer in the world, producing more than 50% of the total vehicles made globally during the 1950s, the United States is currently the second largest manufacturer (after China) of automobiles, with 10 million plus units produced in 2022.

With a 3% share of the US GDP, the automotive industry is considered an important driving factor in the country's economic engine. The industry is also a major employer, with over 1.7 million jobs directly related to the industry and another 7.2 million indirectly supported by it. 

The automotive industry is particularly important in the Midwest. In Kentucky, Indiana, and Ohio, over 4% of state GDP comes from automotive manufacturing. Meanwhile, over 10% of Michigan’s GDP is dependent on the auto industry. 

The US is home to the assembly plants of some of the largest automotive manufacturers in the world which include Ford, Stellantis, Toyota, Tesla, and many more. 

These plants aren’t randomly distributed across the US. Their location choices are a result of careful consideration and depend on three main factors: the economy, labor market, and supply chain. 

Let’s take a closer look at some of these locations and what makes them so desirable for automobile manufacturers. 

Major Automotive Manufacturing Hubs in the USA

Around 90% of American automotive manufacturing plants are concentrated in the Midwest and South. Meanwhile, the West only has 10 major automotive manufacturing plants. These plants belong to different automotive companies, including:

• General Motors Company
• Ford Motor Company
• Stellantis
• Tesla
• Rivian
• Lucid Motors
• Toyota Motor Corporation
• Honda Motor Company
• Nissan Motor Company
• Mazda Motor Corporation
• Subaru Corporation
• Hyundai Motor Company
• Kia Motors
• Volkswagen Group
• Volvo Cars
• BMW Group
• Mercedes-Benz Group AG

Midwest

The midwest has the highest concentration of automotive companies, with more than 950 auto manufacturing plants in Michigan alone. This includes the vehicles themselves, but also auto part manufacturers. 

Michigan 

The state of Michigan has almost always been recognized as the heart of the American automotive industry. That’s especially true for the city of Detroit, also nicknamed "Motor City" due to its major role in automobile production over the years. Major automakers like Ford, General Motors, and Chrysler (now Stellantis) have deep assembly roots in this region.

Here’s are many of the auto manufacturing plants in Michigan.

Michigan has a highly skilled labor force with tons of expertise in automotive manufacturing. According to the U.S. Bureau of Labor Statistics (BLS), the state employs over 175,000 workers in the motor vehicle manufacturing sector. That also makes it the top state for automotive employment in the country. 

These workers have diverse educational backgrounds with specialized skills in assembly, machining, and engineering. The state offers various learning and training opportunities for workers in the automotive industry, including the Automotive Engineering MEng at the University of Michigan and Automotive Technology at Henry Ford College.

Another major advantage is Michigan's proximity to key auto suppliers and logistical networks. The state’s history with auto manufacturing dates back to the early 1900s, creating an ecosystem with time to facilitate the industry’s growth. This ecosystem enables easy access to a vast network of Tier 1 and 2 suppliers, such as Concord Tool and Manufacturing Inc. and AirBoss Flexible Products Co.

Plus, Michigan’s central location makes it easy to ship vehicles and parts. This way, major automotive companies can minimize production costs and delivery times. 

Ohio

Ohio, with cities like Toledo and Marysville, is another major hub in the Midwest. Its central location is the main advantage, with at least 680 businesses directly or indirectly supplying automotive assemblers.

Proximity to the Ohio River Inland Waterway, major interstates, and highways also allows for fast and easy distribution and lower production costs. Today, the state ranks number one in engine production in the US. 

Here’s a complete list of the auto manufacturing plants in Ohio.

Other than its central location, the state also has a robust infrastructure, with major highways, railways, and ports that contribute to cost-efficient production and distribution. 

According to the Ohio Department of Job and Family Services, the state has a strong automotive workforce. That includes approximately 680,000 workers employed in manufacturing-related roles.

Other than that, Ohio is known for its rich network of Tier 1 and Tier 2 suppliers. This strong supplier network enhances efficiency and reduces production costs.

South

In the south, manufacturing plants are based in Georgia, Kentucky, Mississippi, North Carolina, West Virginia, Texas, Tennessee, and Alabama. 

Tennessee

Tennessee, with manufacturing plants in Smyrna, is another major hub for automotive production. This state's business-friendly policies, low taxes, and incentives have long attracted significant investments from major automotive companies. These incentives include:

• Job creation and industrial machine installation tax credits
• Low operating costs and taxes
• Several shovel-ready industrial sites
• A pro-business regulatory environment
• No personal income tax

Here’s a complete list of the automotive manufacturing plants in Tennessee.

Tennessee has a low-tax environment and tons of incentives for automotive manufacturers. These include tax credits, grants, and training programs to support new businesses in the automotive industry. Tennessee's economic development program, "FastTrack," also provides financial assistance to companies investing in the state.

Other than that, the state’s strategic location provides easy access to national distribution networks. It’s crisscrossed by major highways (I-24, I-26, and I-40), rail lines, and air transport. This allows for efficient movement of goods and reduces transportation costs in the long run. 

Alabama

Alabama is a rapidly growing automotive hub, with cities like Tuscaloosa and Huntsville leading the way. The state produces around 1.3 million auto vehicles every year. Alabama has recently seen significant foreign investment, specifically from European and Asian automakers.

That includes Mercedes-Benz, Honda, and Hyundai. These companies have chosen Alabama for its competitive labor costs and supportive state policies.

Here’s a complete list of the auto manufacturing plants in Alabama.

Alabama is known for its competitive labor costs (ranking first among all US states), which is why it’s a top choice for many automotive manufacturers. Also, the state offers many incentives, including tax credits, abatements, and training programs. The Alabama Industrial Development Training (AIDT) program offers customized workforce training to meet the specific needs of manufacturers.

West

The West has the least automotive manufacturing plants in the country. You may find some factories in Nevada and Arizona, but California is the manufacturing hub for the western US. 

California 

California, the Fremont area, has become a hub for innovative automotive manufacturing in recent years. This location is known for its access to a vast network of tech suppliers and startups.

The state has always been synonymous with innovation, and the automotive manufacturing sector benefits majorly from this environment. Fremont, for example, is home to a Tesla Factory, which focuses on cutting-edge electric vehicles. That includes the Tesla Model S, Model 3, Model X, and Model Y. 

It currently has a production capacity of 650,000 units per year and is considered the largest auto assembly factory in the US.

California’s automotive industry has seen significant growth in recent years. Auto manufacturer employment has been up nearly 41% since last year to almost 24,900 jobs this year.

California's proximity to Silicon Valley also provides instant access to major technology suppliers and startups. According to the US Bureau of Labor Statistics, the state boasts the second-highest employment in the automotive industry. 

Analyzing the "Why" Behind Auto Manufacturing Location Choices 

Over the last 30 years, there has been major growth in automotive assembly plants in the central and southern United States. This growth has resulted in a concentration of original equipment manufacturers (OEMs) and suppliers in the region. States like Indiana have moved up to third in the country for automobile manufacturing, just behind Michigan and Ohio.

So, why are so many of these automotive manufacturing plants concentrated in these few states? What makes these locations so special?

Automotive companies go through a careful decision-making process when choosing where to build their next manufacturing plant. The choice depends on but isn’t limited to, three factors.

Economic Factors

A good location for an automotive manufacturing plant is defined by the range of economic incentives offered by its state and local governments. These incentives come in many forms, such as tax breaks and infrastructure grants. In any case, these financial benefits significantly reduce the cost of producing automobiles in a specific location.

For example, South Carolina offers a Job Development Credit – a rebate based on the number of jobs created and wages paid. They also have a "fee-in-lieu-of-tax" program that allows companies to negotiate lower property taxes for large infrastructure investments..

That’s exactly why Volvo Cars produces their Volvo S60 in Ridgeville, SC. The state is also home to BMW US Manufacturing Company LLC and Mercedes-Benz Vans LLC. 

Similarly, Tennessee is recognized for its FastTrack program, which offers financial aid to manufacturers for employee training and infrastructure development. This program is particularly helpful to automotive manufacturers hoping to establish new plants or expand existing ones. 

Other than that, the state has a favorable business climate and doesn’t demand personal income tax.

Automotive Labor Market

The condition of the labor market is often the first thing manufacturers look out for. Automotive manufacturing requires a large workforce with specific skills in assembly, machining, robotics, and engineering. States and regions with a strong history in manufacturing often have a ready supply of such workers.

Ohio, for instance, has the perfect labor market for automotive manufacturing. In 2021 alone, the state employed over 21,000 workers in the motor vehicle manufacturing sector. 

This labor pool is supported by technical schools and universities offering specialized automotive training programs. Ohio State University, for example, offers an engineering program to feed talent into the automotive industry.

As a result, manufacturers like Ford Motor Company, Stellantis, and Honda Motor Company have established plants in Avon Lake, Toledo, and Marysville. 

Similarly, Alabama's workforce development has attracted several major automakers in recent years. The Alabama Industrial Development Training (AIDT) program was created to build a pipeline of skilled workers that meet the needs of high-end manufacturers. This state-funded program provides training facilities, equipment, and trainers at no cost to the employers.

Supply Chain and Logistics

Lastly, the strategic location of automotive manufacturing plants is influenced by supply chains and logistics. States with key interstate highways, rail lines, and ports can help manufacturers reduce transportation costs and production times, as specified by the White House. Being close to key suppliers also reduces the risk of delays in the production process.

Kentucky is a great example of such logistical advantages. Its central location in the eastern US provides easy access to major interstates like I-65 and I-75. It provides access to two-thirds of the US population, with 20 interstates and parkways running through the heart of "Auto Alley." This way, manufacturers can easily distribute their products to markets across the country. 

Another advantage is the state's proximity to major auto suppliers in neighboring states – transporting parts is much cheaper and quicker. It’s one of the reasons Kentucky is the largest automotive-producing state per capita, producing over 1 million cars and trucks in 2022 alone.

As a result, the General Motors Company established its Bowling Green Assembly in Bowling Green, Kentucky. The plant has a daily production capacity of 200 vehicles and over 1,300 employees. Other plants in the state include:

• Ford’s Kentucky Truck Plant: 250,000 vehicles every day
• Ford’s Louisville Assembly Plant: 280,000 vehicles every year
• The Toyota Motor Manufacturing Kentucky Plant: 550,000 vehicles every year

In the same vein, Indiana offers extensive rail networks and access to major ports along the Great Lakes, providing automotive manufacturers with flexible transportation options. This connectivity is a significant draw for automakers looking to streamline their supply chains.

The automotive industry in Indiana has generated over 215,000 private sector jobs and contributed $8 billion in associated wages and salaries to the state’s economy. 

Case Studies

Tesla in Fremont, CA

The Tesla Factory is located in Fremont, California. The General Motors Company first chose the location for its Fremont Assembly. 

Meanwhile, Tesla initially planned to open its factory in Albuquerque, a central location for shipping. However, when GM filed for bankruptcy in 2009, Tesla bought the Fremont Assembly only a year later. This was an even better location for shipping since it’s right next to California State Route 262, which connects Interstate 880 and Interstate 680. 

Since Fremont also houses many auto industry suppliers, Tesla was able to buy $50 million in equipment for $6 million instead. 

Even more, the Union Pacific Railroad has tracks running into the plant, which allows for easy car shipments.

Nissan in Smyrna, TN

The Nissan Smyrna Assembly Plant in Smyrna, Tennessee, is another great example. It’s been active since the 80s and currently employs 8,000 people. 

Before they decided on Smyrna, Nissan considered two other locations in Georgia. But thanks to its central location and ability to transport parts at a lower cost, Smyrna was the final choice. It's positioned near major highways, like the I-75, I-20, and I-285, allowing for efficient distribution across the country.

Currently, the Smyrna assembly plant produces the Nissan Pathfinder, Nissan Leaf, Infiniti QX60, Nissan Rogue, and Nissan Murano. In 2011, the plant produced its one-millionth vehicle, making it Nissan's largest North American manufacturing plant. 

Ford in Dearborn, MI

Lastly, the Ford River Rouge complex in Dearborn, Michigan, is as good a location as it can get. Dearborn has been the heart of Ford's operations for decades, and its location in Michigan provides direct access to a rich network of auto suppliers and a skilled labor force. 

The complex was built between 1917 and 1925 and became the model for assembly-line production in the state. It was Michigan’s introduction to mass production of affordable vehicles, including the Ford Model T. At the time, it was the largest integrated factory in the world, with over 100,00 workers.

The River Rouge Complex is also located near major highways, including the I-75, I-20, and I-285. Over the years, the company has invested nearly $900 million in this manufacturing plant. Today, the location is best known for producing the Ford F-150. 

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Conclusion 

The location is a crucial, if not the first, choice in the making of an automotive manufacturing plant. The perfect location depends on several factors, including economic incentives, the labor market, and supply chain logistics. All three factors are abundant in the Midwest, making it a prime location for auto manufacturing plants in the US. 

Data-based decision-making is important when picking the location for a vehicle assembly plant – that’s where Scout’s site selection platform becomes crucial. Before you make a site selection or business relocation decision, visit Scout to learn more about your potential choices.