In the mature and stable, some would say boring, trans-Atlantic trade, one category of containerized shipments is booming. The volume growth of U.S. auto exports and auto parts imports ranks first among the top five commodities shipped.
Although containerized auto exports slipped last year, auto parts imports continued their four-year growth spurt as domestic and foreign-owned auto plants geared up to meet burgeoning domestic and overseas demand. Now, the outlook for auto exports to Europe too is brightening thanks to improving economic growth, even in the beleaguered south, where Greece, Italy and Spain appear to have turned their deficit-ridden corners.
“There is a big recovery coming in Europe” after five years of contractions, Nissan CEO Carlos Ghosn said at the opening of a Nissan plant in Brazil earlier this month. Elsewhere there are “lots of bright spots in 2014, and without any doubt you are going to have a lot of car manufacturers preparing for the future,” he said. Sales in some developing countries in Africa and the Middle East also are “booming,” he said. Nissan operates three plants in the U.S., two in Tennessee and one in Mississippi. It exports U.S.-built models to 46 foreign countries and U.S. territories.
The continuing U.S. recovery also bodes well for most containerized imports. “Healthy U.S. demand combined with favorable exchange rates on European imports will continue to drive overall traffic,” JOC Chief Economist Mario Moreno said. “The expansion will be broad-based, though shipments from Germany will remain at the forefront, increasing an average of 9.4 percent annually over the two-year period.” He is forecasting U.S. imports from all of North Europe will grow by 7.2 percent in 2014 and 9.2 percent in 2015 after modest growth of 2.6 percent last year. He forecasts U.S. exports to North Europe will rise 0.4 percent in 2014 and 0.8 percent in 2015.
The largest containerized U.S. import from North Europe by volume is auto parts. The growth is driven by the expansion of European automobile plants in the U.S. Southeast over the last decade. “Record luxury car sales in the U.S. in 2013 bode well for future imports of containerized auto parts from northern Europe,” Moreno said. Mercedes-Benz and Audi both experienced U.S. sales growth of 14 percent last year, while BMW posted a healthy 10 percent increase.
“U.S. auto sales have been growing at double digits, but the cyclical recovery is over and so sales are going to move more slowly from now on,” said George Magliano, senior principal economist at IHS Automotive in New York. He said U.S. auto production will increase at a rate of 3.7 percent to 16.8 million units this year, higher than the 16.0 million units he is forecasting for domestic sales. The 800,000 difference between forecast U.S. production and domestic sales is because the U.S. is becoming a major exporter of autos, which are its largest containerized export commodity by volume. Most of that difference will be exported in car carriers, but some of those exports will be containerized.
“Production is strong because automakers are doing more sourcing in the U.S.,” Magliano said. “The luxury auto guys, like BMW, Audi and Mercedes, are expanding their plants down South, and so is Volkswagen.”
IHS Automotive expects total auto sales in Western Europe to grow by 2.4 percent in 2014, by 3.5 percent in 2015 and by 3.1 percent in 2016. Total sales of autos from all sources will grow from a low of 13 million units this year to more than 15 million in 2020, Magliano said. North America, including Canada and Mexico, has become a major source for auto exports to Europe and elsewhere over the last 15 years. Total North American auto exports, both containerized and on car carriers, rose by 5 percent last year to 1.435 million units, compared with only 400,000 units in 2000. This is a big number in terms of production outlook. All of this auto export growth drives imports of auto parts.