Mexican auto suppliers strategize for NAFTA talks

MEXICO CITY — President Donald Trump has made an example out of global automakers that produce in Mexico for the U.S. But auto parts makers south of the border also have a huge financial stake in the upcoming trade talks.

Suppliers here are maintaining a united front with the Mexican auto industry, but the parts community also has strategies for a favorable revision of the North American Free Trade Agreement, industry officials said at a conference here this month.

"The auto parts industry that exports to the U.S. is bigger in terms of sales than all the autos and all the heavy trucks that we sell to the U.S.”, said Oscar Albin, executive president of Mexico's National Auto Parts Manufacturing Association.

In raw numbers, he said, auto parts exports to the U.S. last year were worth about $63 billion vs. $42 billion for light vehicles and $7.5 billion for heavy trucks. About 80 percent of the $80 billion Mexican parts industry's output ends up at U.S. auto factories, while only about 12 percent is sold at home, according to figures from Albin's industry group.

One possible way to expand the pie for North American players, Albin suggested, is finding ways to reduce the participation of supplier nations that contribute little to the NAFTA bloc.

For example, North American countries imported about $78 billion in auto parts last year from China, Japan, Germany and South Korea. Because Japanese, German and Korean automakers make cars in the region, those imports are understandable, Albin said.

It's harder to justify the $30 billion of imported Chinese parts, Albin said. Replacing some of those imports could be an opportunity to create jobs in North America, he said.




News from:http://www.autonews.com

U.S.-bound shipments impress in April

Data recently issued by global trade data showed annual and sequential gains for United States-bound waterborne shipments in April.

April shipments at 950,408 saw a 9.7% gain on an annual basis, which represents the fastest rate of growth going back to February 2016, and comes on the heels of a 8.7% annual gain in April that led to a 17.3% annual increase in the U.S. trade deficit.

The various factors for April’s strong performance, including:
-China and European shipments rising 16.4% and 16.1%, respectively;
-Chinese customs data reporting a 12% increase in the dollar value of goods shipped in April, with some arriving in May;
-shipment gains from Europe mark a return to double-digit growth and its fastest rate of expansion since August 2016; and
-imports from South Korea, where the U.S. is threatening to renegotiate the KORUS (U.S. - Korea Free Trade Agreement) saw its second straight month of declines, down 10.6%;

“Fundamentally, the economy was looking pretty strong in April,” said Research Director Chris Rogers. Is it because retailers are convinced they are going to have a really strong spring? That may be the case in the furniture industry. There is also a degree of suppliers wanting to build up their inventories in case President Trump starts implementing [stricter] trade policies with increased tariffs and all the different trade reviews the White House has going at the moment.”

News from: http://www.mmh.com