Automotive Industry Making Major Contribution to Export Initiative, Report Says
A recent report from the International Trade Administration finds that U.S. exports of vehicles and auto parts are increasing, which in turn has contributed to a gain in domestic employment.
The report states that in 2012 the top five export markets for light vehicles (by units) assembled in the United States were Canada, Mexico, Germany, Saudi Arabia and China. While exports to Canada increased just 2%, the remaining destinations all had double digit increases, with exports increasing 13% to Mexico, 15% to Germany, 22% to China and 28% to Saudi Arabia. Exports to non-NAFTA countries have nearly tripled since 2009, during which time the share of total U.S. automotive exports going to Canada and Mexico has fallen from 64% to 48%.
Under the National Export Initiative the U.S. is seeking to double exports by the end of 2014, and the report notes that this goal has already been achieved with respect to light vehicles in terms of dollar value, which increased from $25.4 billion in 2009 to over $51 billion in 2012. During that time the value of exports to Canada increased 48% to $18.7 billion, followed by Germany (34% increase to $5.8 billion), China (553% increase to $4.9 billion), Saudi Arabia (246% increase to $4.8 billion) and Mexico (82% increase to $3.6 billion). While Mexico purchases a higher number of vehicles from the U.S., consumers there appear to buy more economy models whereas consumers in Germany, China and Saudi Arabia likely are buying more expensive luxury models and SUVs.
Given the factors that make the U.S. an attractive base to manufacture, sell and export vehicles, the report states, a number of automakers have either made recent investments in the U.S. or announced plans to invest in the coming years. These investments range from the Detroit 3 (Ford, GM and Chrysler) expanding their U.S. operations, to others expanding or building new plants in the U.S. for new products to be exported to the world, to manufacturers in-sourcing manufacturing jobs from Mexico back to the U.S.
The report adds that the rise in U.S. vehicle exports has also had a positive impact on U.S. auto parts exports, specifically aftermarket parts. Total U.S. auto parts exports grew from $42.8 billion in 2009 to $74.8 billion in 2012. The top five export markets for this sector were Canada, Mexico, Australia, Germany and China.
The report indicates that the export gains have contributed to an increase in employment in the domestic automotive industry. Jobs in this sector totaled 786,000 at the end of 2012, up nearly 5% for the year and 18.1% from January 2010. According to the report, exports and employment are expected to continue to increase, with one estimate placing total employment at 800,000 by 2016.