By on December 7, 2012

 

Many people don’t realize that most of the “import” cars bought and sold in America no longer roll off a boat, but off an assembly line somewhere in the American heartland. Or at least in the North American heartland. It comes as an even bigger surprise that these cars are one of America’s most successful export products, going from American ports to many countries in the world – where people often are likewise ignorant of the car’s American origin.

Yesterday, we were surprised by the news that Honda aims to become a net exporter from North America in two years. Numbed by the PSTD of too much moronic electioneering, we often forget that “the American Auto Industry” also consists of names like Hyundai, Volkswagen, or Toyota. “Foreign” automakers employ more than an third of America’s autoworkers, who build more than a third of the Made in America cars.

What is very little known is that for many years, these foreign companies have been exporting an increasing number of the American-made cars. While bailed-out GM is busy creating jobs in China (this year alone, GM built some 2.6 million cars in China, vs. 1.9 million in the U.S.) foreign automakers do more to build export-based auto jobs in the US than the companies rescued in the bailout.

  • BMW exported 70 percent of the 276,000 cars it built 2011in Spartanburg, SC, helping South Carolina overtake Michigan as the No. 1 exporter of automobiles. BMW X3, X5, and X6 go from Spartanburg to 130 countries.
  • Mercedes-Benz exports half of its cars made at its Birmingham, Ala. plant to countries outside NAFTA.
  • Honda started exporting U.S. made Hondas 25 years ago. On Wednesday, the 1 millionth Honda automobile to be exported from the U.S. rolled off the line at the company’s Marysville Auto Plant. The 2013 Honda Accord EX-L Sedan is on its 8,000 mile way to South Korea. Since 1987, Honda has exported more than $22 billion worth of automobiles and components from the U.S. American Honda exports the Accord, CR-V, Civic, Odyssey, Pilot from its factories in the U.S.
  • At Nissan, “the numbers are trending toward Nissan being a net exporter,” a spokesman in Yokohama said. In 2012, Nissan exported 247,779 units from NAFTA, imported 418,248 and built 1,157,612 in the region, for a net import balance of 170,469 units. “The tipping point comes when we localize production of the next-generation Nissan Rogue in the U.S. at the end of 2013,” the spokesman said. Nissan is on pace to sell more than 140K Rogues in the U.S. this year. Once they are built stateside, they will reduce Nissan’s import number to less than 300,000, and with increased exports, Nissan could become a net exporter from North America in 2014. Nissan exports the Altima, Frontier, Maxima, Pathfinder, and X-Terra from its factories in the U.S.
  • Toyota began exporting U.S.-assembled vehicles in 1988, and now exports U.S.-assembled vehicles to 21 countries around the world. These exports are expected to increase in calendar year 2012 to more than 130,000 units – a 52% increase from last year and an all-time high for Toyota. The company began exporting Indiana-assembled Sienna minivans and Kentucky-assembled Camry sedans to South Korea last year. Other exports include the Kentucky-produced Avalon sedan, the Indiana-produced Highlander and Sequoia SUVs and the Texas-produced Tacoma and Tundra pick-up trucks. In November, Toyota announced the export of U.S.-assembled Venza crossovers to its distributor in South Korea.
  • Subaru exports the Legacy, Outback, and Tribeca from its factories in the U.S.

17 percent of the cars made at Japanese plants in the U.S. were exported in 2011 for a total of 259,908 units. This total is expected to increase drastically in 2012 and in the coming years.

Free trade agreements are a main driver behind these exports. Free trade agreements get rid of a small 2.5 percent tariff on auto imports to the U.S., but they also eliminate often much higher tariffs on auto imports to other countries. This, a low dollar, and volume production in the U.S. make a strong business case for exports from America. A free trade agreement between American and South Korea made transport of “Japanese” cars from America to Korea more attractive than shipping them the much shorter way from Japan.

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45 Comments on “America’s Hot Export Article: “Import” Cars...”


  • avatar

    Is this known as “Free Trade”?

  • avatar
    mike978

    This all sounds good. If I am not mistaken weren`t you bemoaning the lack of free trade agreements signed in a previous article a few weeks ago. Yet now laud them as part of the reason for increasing exports.

    • 0 avatar
      vvk

      If American government got off their fat asses and signed a free trade agreement with the EU, we would be exporting 2x+ more cars than we do now.

      And if we abolished the archaic FMVSS and switched to worldwide UN standards, America would be the largest exporter of cars in the world. With dollar kept so low by Central Bank, American-made products are extremely price competitive.

      • 0 avatar
        wormyguy

        Free trade agreement with the EU won’t happen as long as France is threatening to veto it unless we ban US-made products are banned from being labeled as “champagne” or “Dijon” mustard, which is a. Ridiculous and b. Probably unconstitutional. One case where I’m tempted to endorse a trade war, slap a 1000% tariff on the French products (they’ve banned ours…) and see if they change their tune.

      • 0 avatar
        virages

        @wormguy. Although it’s probably a small part of an overall trade agreement, the French take their their products and origins very seriously, and rightly so. Sure go ahead and make sparkling wine, but don’t call it Champagne if it isn’t produced there. Internally they follow these laws pretty strictly, (other wine makers can’t make Champagne). And they want to make sure when some one orders some Roquefort Cheese in a Shanghai restaurant, the customer know’s where it comes from.
        Like a company that’s looking after its interests and its trademark, the French are defending their trademarks which are very valuable. They are a people who live off the land and are attached to it.
        As for cars, that’s another thing, where they are made matters less and less.

      • 0 avatar
        vvk

        wormyguy, yeah, let’s be more like the Soviets who produced “Soviet champagne” and “Armenian cognac” and did not give a damn about “French capitalist pigs.”

      • 0 avatar
        MLS

        @wormyguy

        You do realize that the US government affords similar protections to certain domestic alcohol producers, right? For instance, “bourbon” may only be used to describe US-made whisky “produced at not exceeding 160° proof from a fermented mash of not less than 51 percent corn and stored at not more than 125° proof in charred new oak containers.” No different from France’s Champagne regulations.

      • 0 avatar
        Thinx

        There is NOTHING wrong with restricting the Champagne label to wine that is actually from the Champagne region. That is not a free-trade issue – it is about ensuring authenticity of the product by ensuring that some melamine-laced swill from a Chinese sewer isn’t ‘marketed’ as champagne.

      • 0 avatar
        Pch101

        “If American government got off their fat asses and signed a free trade agreement with the EU, we would be exporting 2x+ more cars than we do now.”

        I seriously doubt that Silverado and Ram trucks will be jamming the highways and byways of Europe with an FTA.

        Mainstream models in North America are unique compared to the rest of the world. Automakers tend to build close to where they sell. I would expect US auto exports to be limited to vehicles that sell well in the US but are niche vehicles elsewhere…which is exactly what is happening now.

      • 0 avatar
        MeaCulpa

        @wormyguy
        You win the “least informed opinion price” this year.

  • avatar
    lilpoindexter

    Nissan’s “NAFTA” plants…this includes Aguascalientes and Cuernavaca, Mexico, right?

  • avatar
    tresmonos

    Once BMW brings the manufacturing know-how of the US into Spartanburg, you will most likely see a real global production footprint. Right now, BMW is still in the manufacturing dark ages. I have a close acquaintance from Clemson that is helping them implement standardization methods in their plant. It is surreal to talk to him; a company has to start somewhere. It really does illustrate how much BMW has viewed themselves as craftsmen rather than a manufacturer.

    It’s their lowest cost plant and yields higher quality than their European operations so it’s a no brainer. I have heard stories from him and a maintenance sup about how the company would tear down vehicles from Germany and SC to benchmark quality. They used to do it 3 times a year to ensure their SC facility wasn’t building garbage, though every tear down they would discover Spartanburg would make the better product. It took them years to trust the workforce.

    You cannot beat the efficiency and manufacturing know-how of the United States.

    • 0 avatar
      rodface

      This is very interesting, I’d love to hear more about what they found when they took the cars apart.

      • 0 avatar
        tresmonos

        You would have to be an engineer at BMW to be in the know. Take my info with a giant grain of salt: I first heard the story through a college friend while getting my degree (who has family in SC). Then when I relocated to SC for work, I befriended this BMW maintenance supervisor at a Clemson football game and heard the same story. So third hand info verified by most likely 2nd hand info. I do know one thing: the Spartanburg employees have tremendous lease deals via BMW. Better than what Ford dishes out to their Management for leases.

    • 0 avatar
      icemilkcoffee

      I find it hard to believe that the american made cars would be of higher quality than the German made ones, unless you are comparing between a machine made car and a hand-built car. The machine will obviously beat the human. It is entirely possible that the Spartanburg plant is newer and more automated. But as far as trade training and certification goes- the tradesmen in Germany are legendary.

      • 0 avatar
        tresmonos

        Fits, spec’d torques, body plugs, body sealant, welds, wire routings are things that would be measured.

        Our German operations used to be notorious for not using gated quality processes (still teething). Changes are rolled in rather than reviewd and implemented as a packaged launch event. The Germans are well known for being craftsmen, but they are not well known for being quality or efficiency oriented. There is a big difference. I’m sure their fit/finish may be superior, but I can guarantee you their production control, material pedigree control and process control is extremely lacking compared to an american based facility.

      • 0 avatar
        corntrollio

        tresmonos has this right. Engineering is important, design is important, craftsmanship is important, and any number of other things are too. But you still have to have proper industrial processes and proper supply chains to have high quality manufacturing.

      • 0 avatar
        golden2husky

        Take a hard look at BMW assembly with an open mind and you will be surprised that BMWs are not the cars with the best assembly. Orange peel in the paint is surprising….the paint on a Buick is better…

    • 0 avatar
      MeaCulpa

      BMW does not produce any models both in the US and the EU, so at best they´re comparing apples to oranges.

  • avatar
    jeoff

    Interesting. I’m also curtious about how many used cars get sent overseas from the US.

  • avatar
    BigMeats

    Apparently we Americans need adult supervision.

  • avatar
    APaGttH

    Hooray! Thanks to twenty-years of wage stagnation (when adjusted for inflation), benefit cuts, a weak US dollar and crushing debt, it is now cheaper to build them here and ship them out to our new overlords.

    Would you like fries with that too?

    Our decay into a crumbling empire continues, to the thunderous applause of the proletariat. Give it another decade or two and the labor rates here will be even cheaper than China – standard of living is soooooooooo overrated.

    • 0 avatar
      BigMeats

      “to the thunderous applause of the proletariat”

      I think this is what pot legalization is all about.
      Young people know social mobility is kaput in America. So just stay high. I doubt it will end with only marijuana.

    • 0 avatar
      rnc

      It had to start somewhere, and the while we’ve had stagnation, most of the other G7 have had a decrease (currency adjustments), co-determination would have made a huge difference in the 70′s for our industrial situation, but the only president who ever dared say anything about it was derided for it and replaced by one who just excellerated the process and covered it with a massive trickle, that has now just about reached its endgame, after the “consumer” debt bubble there aren’t to many more bubbles to be created that way, so it just naturally tipps back the other way. That (+) china’s actions, have to have a lot of companies asking themselves just how many eggs they really want to put in the world’s greatest bubble basket (china).

    • 0 avatar
      Freddie

      It’s just the pendulum starting to swing back to restore some economic balance. For too long we Americans have consumed more than we produce, as evidenced by our twin deficits, trade and federal budget.

  • avatar
    Brantta

    One example of a “domestic” car.

    2012 BMW X5 Xdrive35i – MADE IN USA

    Assembled by poorly educated American line workers.
    Designed and engineered by the highly educated German engineers.
    Engine designed by the engineers in Germany, transmission designed by the engeneers in Germany, suspension, safety systems, EPA tested in Germany,…etc
    Engine built in Austria.
    Transmission built in Germany.
    Percentage of US/Canadian parts – 28%
    Percentage of German parts – 45%

    • 0 avatar
      rnc

      They’re actually highly educated line workers, detroit would love to be the greenville/spartanburg area of south carolina, that area invests a huge amount into industrial education/training. Starts in middle school, teach options, then testing and career counseling, followed by education and training thru HS and Tech Colleges for those that don’t want to rack up high 5 figures in debt to get a sociology degree to serve food at outback. A high % of the line workers have 4 year degrees. And yes that plant is incredibly productive, my former employer’s parent company has several O&O’s (specifically that engine plant in austria) with BMW in europe, thier price covers up a great deal.

      • 0 avatar
        tresmonos

        rnc:
        You are absolutely right. The Greenville area has been cultivated by the state of SC to be a manufacturing hub. Cheap nuclear energy, numerous tech schools and public education programs (that you described) to take advantage of education in skilled trades. That is on top of the high percentage of veterans who serve (a southern culture thing) that come back with tremendous amounts of technical skillsets. The upstate is primed for manufacturing investment. It’s just a shame a few large manufacturers have been convinced by other states via cash injection to not set up shop there.

        As to Brantta’s post:
        ZF is setting up a manufacturing facility close to Spartanburg. Imagine that: ZF in SC. So awesome.

      • 0 avatar
        Brantta

        There is no doubt that it’s better to have ZF manufacturing facility in Spartanburg, than in Germany. But after you pay American assembly line workers, you need to ship large amounts of cash to Germany, to pay for the years of R&D poured into design, engineering and testing of those transmissions.

        Same with cars.
        …………2011 Hyundai Sonata……2013 Chevy Malibu ECo
        MADE IN…………………USA…………….USA
        Designed……………..Korea……………..USA
        Engineered……………Korea……………..USA
        EPA test done in………Korea……………..USA
        % of USA/CAN parts………39%……………..62%
        Engine assembled in……..USA……………..USA
        Engine R&D, design…….Korea……………..USA
        Transmission assmbld in..Korea……………..USA
        Trans R&D, design……..Korea……………..USA
        etc…

        They are both built in the USA, but Malibu will help feed more Americans.

        When you buy a Sonata, Hyundai of America have to send money to Korea to pay engineers who conducted EPA testing, aerodynamics engineers, suspension engineers, interior quality engineers, sound engineers, interior designers, chassis, transmission, engine engineers, etc.

        I’m not saying that we all should be buying Malibus, but only that buying a Sonata won’t have the same economic impact.

      • 0 avatar
        corntrollio

        Just like how the price of that iPad only pays a certain small amount to FoxConn for labor in China, a certain amount to parts suppliers (some in Japan), and a larger amount to Apple and its engineers here in the US. Right, Brantta?

        There’s no one answer to this, but it’s great to see more American manufacturing. According to some experts, we will see more, because it will at some point become cheaper to produce goods bound for the US in the US than it will to make them in China and send them on a ship. China is getting more and more expensive as to labor costs, and shipping costs keep going up too.

      • 0 avatar
        tresmonos

        Brantta:
        I work for a US based OEM.

        The consumer is going to dictate what is consumed, not where it’s engineered. Might as well make the product that sells here, even if it’s designed in the EU.

        I was disagreeing with your description of the Upstate of SC as uneducated. Compared to some of the UAW/CAW facilities I work with everyday, I would call the Spartanburg plant a think tank. This is first hand experience.

        Even your notion of design teams being based in the USA is deteriorating. Ford, GM and Chrysler/Fiat are leveraging global design teams. So is all other OEM’s. Sure, the big 2.5 funnel more money back to the states in the direct organization, but when you factor in the supply base, you are no longer correct. And OEM’s supply base pays far more design, logistics and manufacturing personnel than a singular OEM.

    • 0 avatar
      vvk

      Brantta is very badly mistaken about the comparative education of American and German workers. This is an interesting topic for a lengthy discussion. I like the way this particular German talks about it:

      http://math-www.uni-paderborn.de/~axel/us-d.html#edu

    • 0 avatar
      Freddie

      The first Toyota/Honda/Nissan US factories were basically assembling kits of Japanese parts but over time domestic content, as well as domestic design and engineering, has increased. You have to start somewhere.

  • avatar
    toplessFC3Sman

    Well, from what I remember, one of the major reasons for the big 3 looking to manufacture cars outside of the US was that any new, lower-cost (read non-unionized) efforts within the US to do so invariably ended with UAW troubles in already-unionized locations, or some type of requirement to unionize any new US facilities. Transplant factories don’t suffer from the same problems, putting them on a different playing field.

    Now, with the passing of MI’s right-to-work laws, as well as those in other states, and the UAW’s waning membership & influence, that may change.

  • avatar
    L'avventura

    American manufacturing is at a very competitive advantage right now. The dollar is weak, the US has an abundance of skilled workers, extensive freight-rail system, infrastructure is strong, and the US is well positioned geographically to export to Americas, Asia, Europe, and Africa. Not to mention that the US is the most profitable global market for cars.

    In the next few years, the US will also become the world’s largest oil producer due to fracking. Meaning new power plants, cheap energy, and cheaper transportation and logistics costs. On top of that the US has strong IP laws, meaning you don’t have to fear designs being stolen like in China and other emerging nations.

    Compare that to say Japan. While it has strong IP laws, skilled labour, and great infrastructure, it also has strong yen, high wages, ageing population, and high energy costs (as nuclear plants are currently offline). The TPP, the US-Japan FTA, would mean that a flood of American-made Hondas and Toyotas will flood the Japan market.

    As its stands, the US is at an advantageous position to benefit from free trade agreements. Add America’s agricultural strength to its rising manufacturing strength, not to mention its vast pool of natural resources, its a good time to be optimistic of the US economy.

  • avatar
    8rings

    “Buying American” needs to mean built in the US, by people who pay taxes and spend money in thier local economy. The argument, “you’re supporting a foreign company” always comes out when this topic is brought up. That may be true but that foreign company is investing in the US. GM’s profits, oh wait there weren’t any, didn’t help the taxpayers much did they? Meanwhile my Chevy truck was built “with pride” in Canada where health care is free, and my Subaru and two of my BMWs were built by Americans, -with foreign parts content? Sure, but my Mustang that was built in Michigan has a transmission made in China. Factories where Americans are building things, exporting products, getting paid, paying taxes, and supporting local economies is never a bad thing, no matter who’s writing the checks and collecting profits. It’s exactly what we need in this horrible economy.

    • 0 avatar
      danio3834

      3 points:
      -Most Chevy trucks are built in Michigan, none are built in Canada anymore.

      -The health care in Canada most certainly is NOT free. Calling it “free” is a kick in the junk to anyone who pays 30% tax on income, 40% on gasoline, 100% tax on booze and smokes (over US prices) and 13% on everything else you buy.

      -Canada is pretty much a 51st state in economic terms. Exchanging goods accross borders is good for both parties, even if far more vehicles are imported from the US to Canada than vice-versa.

      • 0 avatar
        8rings

        That may be true but my 07 Silverado was and plenty of “American” cars are still. An employer like GM doesn’t have to furnish and pay for a health care plan for employees in Canada do they? Of course someone is paying for it!
        I have no problem whatsoever with Canada trade, it was more of a domestic vs. foreign point. How about if I said my American Suburban (I had) was built in Mexico. My issues are with people who are die hard big three… “always buy American autos” without knowling the facts.

      • 0 avatar
        danio3834

        8rings,
        I understand your point. I just think that when you’re trying to get people to know the facts, it’s important to be as factual as possible.

        GM and other manufacturers do still provide health care benefits for their CAW employees as the public system only covers very basic things. Of course, to your point, because it’s subsidized by tax payers, the net cost to GM is less than a UAW worker.

      • 0 avatar
        8rings

        Correct!

  • avatar
    el scotto

    A couple of things. 1. For those who sing aria about highly skilled German craftsmen; don’t a lot of Turks work the assembly lines in Germany? 2. Maybe I have some idiot savant streak but I remember Subaru mentioning their plant in Lafayette, In; Honda, their Marysville, OH plant, Toyota their Georgetown, KY plant and even vaunted BMW their Spartanburg, SC plant. Nissan came with a window sticker saying they were built in Tennessee.

  • avatar
    ra_pro

    Tresmonos,

    I think a large part of the reason Germans don’t do or didn’t do the quality control was that they trusted their workers. In fact much more than that I think a German worker would be insulted if they told him that the company needed to create a whole new department to make sure whatever they produced was at least of passable quality never mind exceptional quality. As German factories employ more and more foreign workers they learn the hard way that they need the quality control now because foreign workers are not German workers by and large.

    As far as I am concerned North American labor is far inferior to advanced European countries no matter how many schools they may have. They only work to make a living, in Europe the craftsmen work to produce valuable artifacts, for many it’s the purpose of their life. The only thing I hear from North America workers is how much benefits they get and how to not work yet still collect full salary and benefits. What school is ever going to change that attitude?

    • 0 avatar
      corntrollio

      Germans work among the fewest hours of most industrialized countries, according to the OECD, but it’s partly because of the large number of part-time workers. Americans work more hours, but the tops are Mexicans, Koreans, and Chileans. Ironically, Greeks are not far behind, despite the rep, and are the highest in Europe, but it’s partly because more of them are merchants:

      http://stats.oecd.org/Index.aspx?DatasetCode=ANHRS

      Productivity is a separate question — the Germans have relatively high productivity, Greeks relatively low:
      http://www.bbc.co.uk/news/magazine-17155304

    • 0 avatar
      MeaCulpa

      Once upon a time 1/4 of all mercedes plant workers where in some quality control function. Nowadays, not so much. So you’re basically wrong.


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