Saturday, 7 December 2013

On the World’s Roads, More American Wheels

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

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

Annual exports of American-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 Commerce Department.And it is not only the Detroit carmakers that are benefiting from the international appeal of American-made models. Factories owned by Japanese and European auto companies in the United States are also 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 United States division. “It is a very robust area of growth.”

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

On Thursday, the Ford Motor Company 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, Spain; Sydney, Australia; and Shanghai — 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, American factories shipped 1.8 million cars, sport utility vehicles and light trucks for sale in international markets, including Canada and Mexico. That figure should reach two 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 American-made models have become worldwide on manufacturing costs and overall quality.

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 was starting production of its new Highlander sport utility vehicle 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 like 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 expects to export about 14 percent of its United States production overseas this year. And Honda predicts that by next year it will export more vehicles from North America — the bulk of them from American plants — than it will bring into the region from Japan.

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

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

Last year, Ford exported more than 370,000 vehicles from the United States to foreign markets, 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 sport utility vehicles like the Escape and Explorer.

The new Mustang will be built in Flat Rock, Mich., about 20 miles from Ford’s world headquarters. Ford executives stressed that the car was designed mostly for American buyers, but 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 and Chrysler, Ford has drastically trimmed its manufacturing capacity in the United States since the industry tumbled into financial crisis in 2008.

Now Ford’s American plants operate at higher productivity levels, often on three shifts operating 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,” he said.

Some American brands are proving better suited for export markets than others. G.M., for example, is pushing hard to expand sales of its Cadillac luxury brand outside the United States. But the company said Thursday that it was dropping plans for broad growth of its Chevrolet brand in Europe, where it competes for customers with its Opel division.

One of the biggest success stories in exports has been Chrysler’s rugged line of Jeep sport utility vehicles.

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.

Global sales of Jeep vehicles increased 19 percent in 2012 over the year earlier, according to Commerce Department statistics. And Chrysler is investing $500 million in its Toledo, Ohio, plant for the new Jeep Cherokee — partly to accommodate the expected demand for the vehicles outside the United States.

Jaclyn Trop contributed reporting.

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