PDF A Market Assessment Tool for U.S. Exporters

2016 Top Markets Report

Automotive Parts

A Market Assessment Tool for U.S. Exporters April 2016

U.S. Department of Commerce | International Trade Administration | Industry & Analysis (I&A)

Industry & Analysis' (I&A) staff of industry, trade and economic analysts devise and implement international trade, investment, and export promotion strategies that strengthen the global competitiveness of U.S. industries. These initiatives unlock export, and investment opportunities for U.S. businesses by combining in-depth quantitative and qualitative analysis with ITA's industry relationships. For more information, visit industry I&A is part of the International Trade Administration, whose mission is to create prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements.

Jeffrey Williams served as the lead author of this report. Todd Peterson, Liz Couch and Andy Parris all served as co-authors and contributed greatly to the completion of the report.

Table of Contents

Executive Summary...............................................................................................................................3

Overview and Key Findings ................................................................................................................5

Sector Snapshot New Technologies ............................................................................................................................... 17

Country Case Studies Mexico ...................................................................................................................................................... 23 China ......................................................................................................................................................... 27 Germany .................................................................................................................................................. 31 Australia .................................................................................................................................................. 35 Brazil......................................................................................................................................................... 39 Korea......................................................................................................................................................... 41 Saudi Arabia........................................................................................................................................... 43 Thailand................................................................................................................................................... 47 Colombia ................................................................................................................................................. 51

Addendum: Resources for U.S. Exporters ................................................................................... 53

Appendices Appendix 1: OE and Aftermarket Rankings............................................................................... 55 Appendix 2: Automotive Parts Codes Included in This Study............................................ 56 Appendix 3: U.S. Exports of Automotive Parts, 2009 - 2015 .............................................. 57 Appendix 4: Citations ......................................................................................................................... 58

2016 Automotive Parts Top Markets Report 1

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Executive Summary

The automotive industry is the largest manufacturing sector in the United States. It is truly a global industry with automakers from the United States, Europe, Japan and Korea producing cars and automotive parts for consumers around the world. With so much activity taking place, this Top Markets Report provides U.S. auto parts suppliers with an assessment of opportunities and challenges, and can be used as a resource to help suppliers successfully export to various markets throughout the world. Separate models were developed to rank opportunities for original equipment (OE) parts and for aftermarket parts export markets through 2021. Rankings are provided for a total of 30 markets, with detailed country case studies written about nine different markets. In addition, the report includes two snapshots regarding new automotive technologies and benefits from the Trans-Pacific Partnership.

Rankings

The rankings for the OE and aftermarket models show a number of similarities, with both models having Canada,

Mexico and China as the top-ranked markets.

However, despite these similarities, distinctions do emerge in both the order of the rankings and the relative values that many countries received. While Canada, Mexico and China are the top three in both the OE and aftermarket rankings, they receive these scores for varying reasons in each analysis. In regards

Figure 1: Automotive Parts Export Market Rankings

Original Equipment Parts

Country Ranking

Aftermarket Parts

Country

Ranking

Canada

1

Canada

1

to OE, China had the highest average vehicle

Mexico

2

Mexico

2

production (17.8 million) between 2012 and 2014,

China

3

China

3

more than double the second largest vehicle producer Japan

4

Hong Kong

4

in this analysis (Japan produced 8.3 million vehicles on

average from 2012 to 2014). China is also projected to Germany

5

Singapore

5

produce over 27 million vehicles by 2020. In addition, Korea

6

Chile

6

it is the third largest market for U.S. automotive parts, Belgium

7

Peru

7

with U.S. automotive part exports growing from less

than $1 billion in 2009 to almost $2.4 billion in 2015.

Hong Kong

8

Belgium

8

Given the large size of the market and the growth of

Singapore

9

U.S. automotive parts exports to the market since 2009, China looks to be a strong prospect market for

France

10

Netherlands

9

Germany

10

American?made OE auto parts. In the aftermarket rankings, China is also a market with large potential, largely for

similar reasons.

Canada and Mexico, however, are the top two markets in the OE and aftermarket rankings for a different set of reasons. While they produce fewer vehicles than China (Canada averaged 0.9 million and Mexico averaged 1.8 million between 2012 and 2014), they have historically been the largest market for the export of U.S. automotive parts, accounting for almost 75 percent of U.S. auto parts exports in 2014 and 2015. In addition, the automotive industry is highly integrated among Canada, Mexico and the United States given the close proximity in terms of distance and the sharing of a border. Based on these factors and the continued growth of vehicle manufacturing and investments in Mexico, it is expected that these two neighboring markets of the United States will continue to be strong markets for U.S. auto parts exporters in the future.

Looking further at the OE model, Japan, Germany and Korea round out the top six potential markets. These three countries are the largest producers of vehicles following China, so it is understandable that there would be a greater demand for OE parts in these countries. On average, Japan produced 8.3 million vehicles, Germany produced 5.5 million vehicles, and Korea produced 4.2 million vehicles. In addition, Germany is the fourth largest

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