US Automobile Industry Exports and Imports in 2015-2016: The third year in a row they have reached a new high

The third largest exporter in the world is United States but its exports accounts for only 13% of its total GDP contribution. Main exports being capital goods occupying a large chunk of 40%, while automotive exports account for 10.5% ranking 4^th in the list of the most exported items following consumer goods. Consecutively for three financial years, the American auto industry have broken their own records and have done splendidly well in terms of exports.

Growing Demand of SUV and MUV in Asia 

Sport utility vehicles and US made cars soared up for the last few years from the nations of Asia and Middle East offsetting worries about the dollar getting strengthened. The auto export trend was further fuelled by the US auto plants owned by foreign countries built in the US Midwest and South. They have also been found to be exporting more vehicles in the other markets.   The companies that started factories closer to U.S. customers are also exporting like Honda Motor Co and Toyota Motor Corp.

The most demanding nations in terms of destination for US car exports have been Mexico and Canada which are again two of the biggest exporters to US.

A strengthening dollar was defied by US growth in exports which made the practice less profitable in the previous financial year. From American built Fords, BMWs, Jeeps, Nissans, Toyotas that were shipped overseas a big chunk of the rise stemmed. Every year the number of cars that are now going to nations like South Korea, Saudi Arabia and China are increasing.

Competition from European Markets

For the purpose of building low cost cars US has become the new haven giving good competition to some of the other nations who took the pride earlier of selling cheaply priced cars. The trends of lean manufacturing and competitive rates for labour charges have given a new shape to the US car exports industry even during rough times like that of recession. It has brought US in the new limelight in the global auto industry. As of now dollar is doing fairly well but then for some years back the weak dollar had played a very strong role in bringing about a revolution in structuring the auto industry in US.

The sourcing plans are not supposed to be affected much with the strength of dollars against the Euro and the Japanese Yen. Based on temporary fluctuations in the rate of exchange, not much alteration are made in the production or allocation planning even though a close watch is kept by big American automobile giants.

Foreign car makers like Daimler AG, BMW AG, are also aiding in bringing about the rise of US auto exports. Both these giants have set up their plants in USA for the purpose of building SUVs, majority of the SUV exports take place from their US production. These companies also have expansion plans to increase their production. Not only utility cars but even sports cars will be brought into production and exported.

Record Sales in 2015

Never to have seen before the markets in US seemed to be close to its zenith setting records of sales under 17.5 million vehicles in the year 2015. This was 5.7% from the year before and reaching the really soaring water mark of 1,74,02,486 in year 2000.   Moderate downturn is however expected in the US Market by the year 2018 and sales are also expected to be flat quite likely for the years 2016 and 2017. As the Federal Reserve raises the rates overnight in 2018 the downturn can be expected and a pouring number of vehicles would flood the used market of car.

As per forecasts for sales of auto in the year 2015, Mexico has done a better job by leaping 19% to more than 1.3 million units and experts say by 2021 they are expected to grow beyond 1.5 million. In new automobile factories set up in Mexico, investments are flowing in really well. And it is expected that the installed capacity will grow by 50% in the coming 5 years for the growing consumption and exports.  These circumstances would force automakers and suppliers to closely monitor and control the factory usage and supply chains prevalent in the US market while continuing to spread its wings in Mexico.

Looking into the Future of US Automobile Exports

Automakers in US must lay emphasis on upgrading mobility and transportation features of their vehicles since stricter fuel economy regulations are coming into action. By the year 2025 US will be compelled to have 60 miles per gallon average upward as automakers fleet in Europe. And this will become quite difficult to achieve with oil prices remaining low and it will also stoke interest of consumers in larger vehicles which are not that efficient like the SUVs and pickups. Judging by the amount of time left these must be implemented in the traditional type internal combustion engines too along with power trains.

Some of the recent developments fuelling US car Exports are given below:

1.Within a span of 4 years Malaysia is expected to eliminate tariffs on 75.8% of US automotive exports

2. Within a span of 4 years Vietnam is expected to remove tariffs on 70.4% of US automotive exports

3. Non tariff barriers will be removed by Japan that impedes exports of automotives

4. For cars and trucks from Japan United States secured a long phase out of its tariffs.

Zero tariffs are faced by China or very low tariffs when they are exporting to the above nations due to the already signed agreements it has with these countries.So with time tariffs are being worked upon to have USA penetrate these regions with car exports better.

In these regions high quality American motorcycles are in high demand for their superior craftsmanship and quality. In new TPP markers they still face some prohibitive tariffs. So the U.S. motorcycles are expected to see deep annual cuts to the tariffs till a time they are completely phased out.There is quite a lot of promise for remanufacturing in USA opening up more value added vistas for exports.

New opportunities for exports are surely to open up for US car exports as Asian nations see a growing rise of the middle class allowing them more choice and affordability making the exports in 2016 touch a new level