During the first six months of the year the level of US auto imports have reached a historical record and look ready to post even higher results for the full year period.
The all-time record imports also come amid a resurgence in automotive plant investments by a wide array of foreign manufacturers, but the experts and industry analysts actually warn that in the years to come the trade deficit will be even higher due to the incredibly rapid expansion of Mexico’s production output – much of it just jumping across the border into the US. In June for example, vehicles and automotive parts were responsible for around a third of the total US trade deficit. During the first part of 2015 the automotive imports have jumped to $171.5 billion, growing by $10.8 billion from the first six months of 2014, shows a recent report coming from the U.S. Census Bureau. Meanwhile, for the same time frame auto exports fell by $3 billion, to just $74.8 billon. Mexico has been a major player in the deficit, with $35 billion worth of exports during the first six months of the year. The US exported $1.4 billion in cars, light trucks and crossovers to its neighbor, but Mexico delivered back $11.3 billion in vehicles – the rest of the deficit was made up by heavy trucks and auto parts.
Mexico has reached the status of the world’s fifth largest auto producer, with its manufacturing hub on a rapid expansion. Nissan and cooperation partner Mercedes-Benz will use a new plant being built in Aguascalientes, Audi is almost ready to finish its first factory here and Kia has announced plans to build its own manufacturing facility in Mexico. But Mexico is not the only threat – because during the first half Japan also exported $25 billion in autos, trucks and auto parts to the US and only imported one billion in matching goods. The main reason – the weakening Japanese currency, which lifts the value of repatriated earnings for the companies producing locally.