Americans are starting to spend money on cars again, and the results are showing up in increased imports of automotive parts.
Containerized imports of vehicle parts plummeted 22 percent to 369,584 20-foot equivalent units in 2009, when U.S. vehicle production and sales fell to levels not seen since the last big recession at the start of the 1980s.
Parts imports recovered in 2010, topping 2008 levels, and continued to gain momentum last year. The third quarter marked the 11th straight quarter of sequential gains, according to data from PIERS, a sister company of The Journal of Commerce.
The recovery has been broad-based. “Auto parts have shown big increases from China, North Europe and South America,” Journal of Commerce Economist Mario O. Moreno said.
That’s a sign of the automotive industry’s increasing global connectedness. Automakers were in the vanguard of industries embracing global production. They’ve been adept at developing international supply chains that take advantage of comparative advantage in production costs.
Those global supply chains were strained last year by the Japan earthquake and tsunami in March and Thailand’s devastating floods in November. Japan’s disaster was especially severe, forcing temporary closure and production cutbacks at several automakers’ U.S. assembly plants.
The disruption in Japan provided a tailwind for growth in parts shipments in the second half of 2011. Automotive parts imports during the third quarter were a record 161,848 TEUs.
Much of that volume was for spare parts for aftermarket retailers, not assembly plants. Non-U.S. automakers establishing North American assembly plants typically lean heavily on home-country suppliers at first before moving quickly to develop clusters of nearby suppliers.
Currency fluctuations also influence sourcing decisions. Japanese producers, in particular, have been affected by the rising yen, which makes it cheaper to source parts from other countries. U.S. parts producers, meanwhile, have been forced to cut costs and become more competitive.
Increased auto parts imports for aftermarket sales are aided by the aging of the U.S. motor vehicle fleet. Despite 2009’s Cash for Clunkers program, the average vehicle on U.S. roads is almost 11 years old, two years older than the average in 2007.
Today’s auto parts, however, last longer. Twenty years ago, maintenance schedules called for spark plugs to be replaced every 12,000 miles. Now many automakers design plugs for 100,000 miles of use.
Although economic problems are clouding forecasts, industry analysts expect increases in vehicle sales and production to continue this year. LMC Automotive forecast U.S. sales of light cars and trucks will total 13.8 million units following a 9 percent rise to 12.9 million units in 2011.
“As long as there is not an external shock or economic setback, the selling rate could be stable above the 14 million-unit level during the second half of 2012,” said Jeff Schuster, senior vice president of forecasting.
That would still be well below the pre-recession sales peak of more than 16 million units, but no one expected sales to recover overnight. “It’s a cyclical industry,” said Jim Gillette, analyst at IHS Automotive. “If your mother told you otherwise, she lied.”