The U.S. auto trade is undergoing a sea change as the import share of the domestic market is set to level off in the next few years and exports of U.S.-made cars rise.
Ever more autos are being made in plants foreign automakers have set up in the U.S. and its North American Free Trade Agreement neighbors. As a result, the share of the U.S. market controlled by auto imports is on the wane after years of growth, while the share of the market controlled by “foreign-badged” cars made in the U.S. is rising.
That doesn’t spell a long-term decline in the number of cars moving through U.S. ports, because the actual volume of auto imports will grow with the expansion of the U.S. economy. The share of seaborne auto imports will decline this year and for the next two years before leveling off at slightly above 20 percent, according to forecasts by IHS Automotive.
Auto imports accounted for 24.6 percent of U.S. auto sales in 2011, while cars produced in foreign-owned plants in the U.S. took 28.5 percent of the market, according to IHS. By 2015, the import share will decline to 20.2 percent of the market, while the share controlled by foreign-badged cars made in the U.S. will jump to 35 percent.
The growth of the U.S. market share controlled by foreign-badged cars could signal an increase in imports of containerized auto parts to feed the growing number of auto assembly plants being established in the U.S. by carmakers from Europe, Japan and South Korea.
Just as the seaborne import share of market is waning, exports of cars made in the U.S. are waxing strong. “The U.S. is becoming an export hub,” said George Magliano, senior principal economist for IHS Automotive. “We’re getting more production localized here because the Japanese and the Europeans and the Koreans want to get away from currency fluctuations.”
The foreign automakers produce cars on common platforms shared among different models produced around the globe. “So they are looking to do global car platforms, which enable them to shift production here and export from here,” Magliano said.