Automotive Parts

Most U.S. SME auto suppliers do not export. Thosethat do export do so primarily to Canada and/orMexico. This demonstrates untapped potential tointroduce U.S. suppliers to foreign markets, particularlyfor the aftermarket. These SMEs do not have themarketing departments, international operations, andvast resources to readily expand their operations tonew markets throughout the world in the samecapacity as the vehicle manufacturers and many of theTier 1 suppliers.This Top Markets Report aims to identify the bestmarkets going forward for these companies to focustheir efforts in identifying export opportunities. Byfocusing on automotive parts, this study provideshelpful market information to assist these companiesin identifying promising markets to expand theirbusiness, grow exports, and remain competitive on aglobal scale.Export MarketsIn 2009, the United States exported approximately $43billion worth of automotive parts. The top five marketsin order were: Canada, Mexico, Germany, China, andJapan. By 2014, the value of automotive parts exportsfrom the United States had risen to almost $81 billion.The top five markets by 2014 had changed to: Canada,Mexico, China, Germany, and Australia. SeeAttachment 2 for a full list of the top 30 exportmarkets for U.S. automotive parts between 2009 and2014. Trade data related to auto parts does notdistinguish between OE and aftermarket parts, which isa limitation for this analysis.Of the nearly $81 billion of U.S. automotive exports in2014, Canada accounted for about $30 billion of theseexports, with Mexico accounting for almost another$29 billion. Combined, these two NAFTA partnersaccounted for almost 75 percent of all U.S. automotiveparts exports. Exports to both of these markets grewsubstantially over the same time period, with exportsto Mexico more than doubling from $12.1 billion in2009 to over $29.1 billion by 2014. As a result ofNAFTA, the U.S. auto parts industry is highly integratedin the North American supply chain, contributing to theflow of goods among the three markets. The thirdleading market for U.S. exports in 2014, China, hassteadily been growing as a market for U.S. exports overthe last five years. U.S. automotive exports to Australiamore than doubled over five years from $687 million in2009 to almost $1.5 billion in 2014.For the European market, Germany is the topdestination for U.S. automotive parts exports, followedby the United Kingdom, the Netherlands, Italy,Belgium, and France. Brazil is the top destination forU.S. parts exports in South America with exports nearlydoubling from $554 million in 2009 to $1.1 billion in2014. The next largest markets in this region for U.S.parts are Chile, Venezuela, Colombia, Argentina, andPeru.Challenges facing U.S. automotive parts exportersOne of the greatest challenges facing U.S. auto partsexporters is the global regulatory environment. Lack ofharmonization/coherence and transparency ofregulations and standards, deeply affect thecompetitiveness of U.S. vehicle and automotive partsmanufacturers worldwide. Conforming to two differentstandards is costly and time-consuming. Until recently,most developing countries have had only limitedregulatory requirements and thus they acceptedvirtually any vehicles built to minimal safety andemissions levels. This has made it possible forAmerican companies to export U.S.-compliant vehiclesand products for sale to these markets.Unfortunately, many countries are now choosing toeither accept or base their regulatory standards onthose developed by the European Union. Because ofthis, they are no longer allowing the sale of U.S.-compliant products in their markets. It is an irony thatmany of the countries that are adopting EU standardshave systems more similar to the U.S. system (e.g.,Chile, Colombia, Russia, etc.).They have been doing this largely because the EU hasbeen aggressive in marketing its regulatory system andappear to be including requirements for adopting itsstandards in its trade agreements. However, now thereis a possible threat to the EU system as well. Inaddition to the barriers cropping up from themandatory use of EU standards, there are recent hintsthat emerging markets like China or India aredeveloping their own standards. Having a third, fourth,or potentially more set of standards will make it evenharder to export to other markets, and certainly raisethe cost of doing business. This is one of the manyreasons why it is in the interest of the European and2015 ITA Automotive Parts Top Markets Report 5