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Published: Sunday, 12/29/2013 - Updated: 6 months ago

Exports expanding for foreign autos made in America

NEW YORK TIMES
Annual exports of U.S.-made vehicles rose 80 percent from 2009 through 2012. Annual exports of U.S.-made vehicles rose 80 percent from 2009 through 2012.
AP Enlarge

DETROIT — The resurgence of the U.S. auto industry has been driven primarily by pent-up demand for new cars and trucks by American consumers.

But a big part of the comeback has come from an unlikely source: rising exports of vehicles made in the United States for sale in international markets.

Annual exports of U.S.-made vehicles have increased nearly 80 percent from 2009 through 2012. And this year exports are up about 9 percent from last year through the month of October, according to the U.S. Commerce Department.

It is not only the Detroit car makers that are benefiting from the international appeal of U.S.-made models. Factories owned by Japanese and European auto companies in the United States also are steadily expanding their export business, adding jobs and investment to keep pace with overseas demand.

“It’s becoming a more important part of our business every year,” said Robert S. Carter, senior vice president of Toyota’s U.S. division. “It is a very robust area of growth.”

Indeed, automakers are adding more new models to their roster of export-ready vehicles.

Earlier this month, Ford Motor Co. unveiled the latest version of its iconic Mustang muscle car, and it announced that for the first time it would begin exporting it to global markets in 2015.

The introduction of the new Mustang was a global event, with simultaneous presentations in New York; Los Angeles; Barcelona; Sydney, and Shanghai, China — as well as in Ford’s hometown, Dearborn, Mich.

“We think this car has universal appeal,” said Mark Fields, Ford’s chief operating officer. “We’re really excited to ship it to Europe and China and the Asia-Pacific countries.”

Last year, U.S. factories shipped 1.8 million cars, SUVs, and light trucks for sale in international markets, including Canada and Mexico. That figure is expected to reach 2 million this year.

While that is still a fraction of the estimated 15.5 million vehicles expected to be sold in the United States this year, the growth of exports underscores how competitive U.S.-made models have become worldwide on manufacturing costs and overall quality.

One of the biggest success stories in exports has been Chrysler Group LLC’s rugged line of Jeep SUVs.

On any given day, the assembly line at Chrysler’s Jefferson North assembly plant in Detroit churns out Jeep Grand Cherokees destined for sale in more than 120 countries.

And Chrysler sold 52,473 Jeep Wranglers, which are made only in Toledo, outside the United States in 2012.

Global sales of Jeep vehicles increased 19 percent in 2012 over the year earlier, according to Commerce Department statistics.

The Toledo-built Cherokee isn’t being sold outside North America yet, but Chrysler officials have said they expect the vehicle to sell well overseas and that the vehicle could become the world’s top-selling Jeep model.

Since emerging from the recession, automakers are benefiting from lower labor and energy costs, along with slimmed-down, more efficient plants.

“We are likely to see a continued growth of exports, as the U.S. has a more competitive cost structure than before, better products, and more global platforms that can be shipped elsewhere,” said Xavier Mosquet, an auto specialist with the Boston Consulting Group.

At the same time Ford was showing off the new Mustang, Toyota Motor Corp. was starting production of its new Highlander SUV in Princeton, Ind.

Toyota officials said that key markets for the Highlander were Russia and Australia.

While Ford is looking to broaden its Mustang sales in overseas markets, foreign automakers such as Toyota view exporting from the United States as an alternative to higher manufacturing costs in their home countries.

“It’s a hedge against currency fluctuations, but it also shows how attractive our products are in places like China, Russia, and the Middle East,” said Mr. Carter of Toyota.

Other automakers are following suit.

Nissan Motor Co. expects to export about 14 percent of its U.S. production this year. And Honda Motor Co. LTD predicts that by next year it will export more vehicles from North America — the bulk of them from plants in the United States — than it will bring into the region from Japan.

Last year, Canada and Mexico accounted for about half of exports of U.S.-made vehicles. A decade ago, the vast majority of exports were limited to Canada and Mexico, but demand for U.S. models in is expanding rapidly in other countries.

Exports to Saudi Arabia, for example, have tripled since 2009. Sales to Chinese customers have increased fivefold over the same period.

Last year, Ford exported more than 370,000 vehicles from the United States, an increase of nearly 14 percent from the previous year.

The roster of models headed overseas includes the company’s popular Focus and Fusion sedans, as well as SUVs such as the Escape and Explorer.

The new Mustang will be built in Flat Rock, Mich., about 20 miles from Ford’s world headquarters and about 35 miles north of Toledo.

Ford executives emphasized that the car was designed mostly for U.S. buyers but said that its history and appeal had gained admirers in every region of the world.

“More than 50 percent of Mustang fans on Facebook are outside the U.S.,” Mr. Fields said. “And there are 300 Mustang clubs on five continents.”

Like its domestic rivals, General Motors Co. and Chrysler, Ford has drastically trimmed its U.S. manufacturing capacity since the industry tumbled into financial crisis in 2008.

Now Ford’s U.S. plants operate at higher productivity levels, often on three shifts running nearly around the clock. A growing number of its hourly workers are also receiving lower, entry-level wages that have cut overall manufacturing costs.

Ford has also introduced smaller, more fuel-efficient engines that are attractive to buyers in Europe and other regions where gas prices are high. Mr. Fields said product planners in the United States were attuned to the needs of consumers abroad.

“We’ve changed the heating and air conditioning systems to accommodate very high heat levels in the Middle East,” Mr. Fields said.

Some U.S. brands are proving better suited for export markets than others. GM, for example, is pushing hard to expand sales of its Cadillac luxury brand outside the United States.

But the company said this month that it was dropping plans for broad growth of its Chevrolet brand in Europe, where it vies for customers with its Opel division.



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