Quarterly Newsletter - Summer 2017 

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• Focus On: ITS World Congress 2017 - Driving Smart Cities
• Update on China’s Automotive Industry
• Upcoming Events
• Trade Leads
• In the News
• What our Customers are Saying!

Focus On: ITS World Congress 2017 - Driving Smart Cities

From autonomous vehicles to artificial intelligence to smart city infrastructure, the potential and impact of the ITS industry is growing exponentially—with market projection estimated at $143 billion by 2020.  “Today’s global transportation industry is at a transformational tipping point,” says Regina Hopper, president and CEO of ITS America. “We find ourselves in the midst of a whirlwind of innovation in transportation driven by swift advances in cloud computing, automation, connectivity, robotics, artificial intelligence, privacy, and security concerns and business models.  With the pace of technological growth combined with increased demand, opportunities exist on transportation’s cutting edge. Innovative information on connectivity, infrastructure, Smart Cities, security, systems integration, business models will provide the advantage needed to anticipate change, respond to demand, and navigate effectively in the rapidly evolving marketplace. As transportation moves to the epicenter of the Internet of Things, its future demands more and more on integrated technology.  Companies that want to connect with market players and stakeholders from every sector; technology, policy, and transportation leaders who are advancing the industry on all fronts; and those who want to seek out partners and investors should attend ITS World Congress 2017.  The Congress, produced by ITS America, in conjunction with ITS Canada and co-organized by ITS Europe and ITS Asia-Pacific, comes to the connected city of Montréal, Canada, October 29 - November 2.  Global leaders in intelligent and transformative transportation will meet for this premier event focused on technology, innovation and business collaborations through cutting-edge programming, unparalleled B2B and B2G networking opportunities, and an interactive Exhibit Hall highlighting the latest in creative concepts, active prototypes, and live systems from around the world. This premier event only happens in North America once every three years. For more information about or to register for ITS World Congress 2017, visit: www.itsworldcongress2017.org.

Update on China’s Automotive Industry

Overview:   The Government of China has viewed its automotive industry, including the auto parts sector, as a pillar industry for many years.  China recently became the world’s largest vehicle market with over 24 million units sold in 2015, a 4.7 percent growth rate from 2014.  In 2015, this figure was 17.5 million in the United States.  In 2015, China exported 755,500 units of completed cars valued at $12.4 billion and China imported 1.1 million units from overseas valued at $45 billion.  Best prospects in China’s auto industry include electric vehicles (EVs) and new energy vehicles (NEVs) as well as recreational vehicles (RVs).

Electric Vehicles (EVs) and New Energy Vehicles (NEVs):  The Chinese government’s 13th Five-Year-Plan (2016-2021) includes specific directives to steer the nation toward energy-efficient vehicles, specifically New Energy Vehicles (NEVs), as a way to combat petroleum imports and oil dependency, as well as a way to build new industrial capacity. 

Recreational Vehicles:  China ranks second only to Canada as a destination market for U.S. RV exports.  While exports to China are small compared to Canada, these are expected to grow considerably over the next three years.  It is estimated that U.S. RV exports to China will grow to $80.2 million in 2017, with an annual growth rate of 22 percent.

Automotive Aftermarket Products and Services:  China is the third largest market for U.S. auto part exports. China’s automotive aftermarket has the potential to grow by 298 percent from 2015 to 2025, according to Accenture.  China’s automotive aftermarket is still at its initial phase of development, with car sharing, car hailing, car rental, customer finance, and maintenance, as well as second hand car trading listed as segments with the most market potential.

Below translation provided by the USDOC Office of China as part of their daily highlights - April 25, 2017.

Medium and long-term auto industry development plan released. Three agencies led by the Ministry of Industry and Information Technology (MIIT) today released The Medium and Long-Term Auto Industry Development Plan. The plan aims to make China, already the world’s largest auto market, a “strong” auto power within ten years and forecast auto sales to reach 30 mn units by 2020 and 35 mn units by 2025 – up from 28 mn in 2016. It sees the development of new energy vehicles (NEVs) and intelligence connected vehicles as providing an opportunity for China to capture the market pre-emptively and leapfrog in auto development. The plan calls for nurturing a number of auto makers ranking among the global top ten NEV makers by 2020 and the “backbone” NEV makers to have a larger global market share and influence by 2025. Other targets include creating a number of auto parts makers with annual sales exceeding 100 bn yuan each by 2020 and a number of auto parts makers ranking among the top ten in the world; creating a number of globally well-known auto brands by 2020 and a number of Chinese brands ranking among the global top ten sellers by 2015; increasing the share of after-sale market and services to 45% of the industry value chain by 2020 and 55% by 2025; starting to export Chinese brands to developed countries by 2020 and gaining higher global influence by 2015; reducing fuel consumption in new passenger vehicles to 5 liters per one hundred kilometers by 2020 and 4 liters by 2025. The focus will be on the development of NEVs, intelligent connected vehicles, and energy-saving vehicles for which specific targets are set including NEV sales to reach 2 mn units by 2020 and 20% of total vehicle sales by 2025; the sales of vehicles with drive-assistance (DA), partial automatic (PA) and conditional automatic (CA) systems reaching 50% of new vehicle sales by 2020 and 80% with PA and CA vehicles accounting for 25% and the introduction of total driverless vehicles by 2025. Under a brand-building project, the plan calls for backbone auto makers to devote 4% of their revenues to research and development (R&D) and developing a number of globally well-known auto brands by 2020 and 6% R&D expenditure and a number of Chinese brands ranking among the world’s top ten brands in production and sales by 2025. (Full text in Chinese: http://www.miit.gov.cn/n1146290/n4388791/c5600433/content.html) (MIIT). 

Upcoming Events

Discover Global Markets – Cleveland, Ohio - September 18 - 20, Cleveland, Ohio - Grow your exports, determine your export potential in new markets, and find the right international partners by meeting with U.S. government trade experts coming from 16 European markets, in addition to Mexico and Canada.  At Discover Global Markets, you will learn how emerging trends will impact your bottom line through industry-specific panels, Q&A sessions with U.S. government trade experts, networking with other exporters, export service providers, and feedback from OEMs. Register Now - http://bit.ly/DGMUSmanufacturers Latin American & Caribbean Tyre Expo, June 14-16, 2017, Panama City, Panama - LACTE is the premium tire and related products show in all of Latin America and the Caribbean.  The 2016 Expo was visited by over 3,000 tire dealers from over 70 countries and counted on more than 200 exhibitors from all over the world.  U.S. exhibitors will have the opportunity to connect directly with tire dealers with tire dealers in Central and South America and the Caribbean and expand your market.  According to the U.S. Commercial Service Panama City, the automotive inventory in Panama is estimated at over 1,000,000 units.  U.S. participation in the automotive parts and service market is significant, with a market share of more than 40%.  Demand will also remain strong for U.S.-made car parts and accessories for Japanese models.  For more information:  www.latintyreexpo.com, Michael.thompson@trade.gov, Jeane.zuniga.@trade.gov Intelligent Transportation & Integrated Mobility in Montreal, Copenhagen, Singapore and Dubai – Webinar - June 21, 10 a.m. EST: Brief update on local developments, municipal priorities, and needed technology solutions around intelligent and integrated transportation in these leading global city ‘hot spots.’  Delivered with the support of the Intelligent Transportation Society of America, the U.S. Commercial Service in-country trade advisors offer insights to help you assess potential for your company’s products and services.  Learn about leading developments and opportunities in Montreal, Copenhagen, Singapore and Dubai.  Learn about ITS World Congress 2017 in Montreal and how this program’s 10,000 participants from 50 countries can boost your global business development. Register:  http://tinyurl.com/ITSWorldCongress2017. Questions:  Kellie.Holloway@trade.gov, 503-326-3002.

Latin Auto Parts Expo (LAPE) - July 19-21, 2017 -  The Expo provides manufacturers and distributors direct access to the Latin American and Caribbean OEM, replacement parts, aftermarket parts, automotive remanufactured parts, and tuning markets. info@latinpartsexpo.com

Smart Cities Business Development Mission to Poland & the Czech Republic - September 10-15, 2017 - To position U.S. companies to be significant contributors to the Smart City developments in these two markets, USCS Poland and the Czech Republic are hosting an official US Commerce Department trade mission, September 10-15, 2017.  Read more about specific projects, government initiatives and opportunities U.S. exporters can explore and develop as part of the Smart Cities Business Development Mission to Warsaw, Krakow, and Prague here. Please contact Kent Campbell at 202-482-7426 or Kent.Campbell@trade.gov.

Automotive Aftermarket Trade Mission to Honduras & Nicaragua - September 26-18, 2017 - The Auto Care Association and the International Trade Administration present a cost-effective opportunity to gain firsthand market information and meet one-on-one with local aftermarket industry partners, pre-screened to match your specific business objectives. Mission costs are offset through a U.S. Department of Commerce award.  Join one or both countries for customs B2B matchmaking and events.  Learn more about these commercial markets and the fit for your company via these instant replay briefings on the auto markets Honduras and Nicaragua (passcode “Managua”). Contact kellie.holloway@trade.gov for more information.

Trade Leads

USA: Miba is a large global Austrian company that has several U.S. manufacturing plants. They are looking for a domestic, US supplier, to supply material for their CAT-Friction program to their facility in Detroit (Miba HydraMechanica – MHC).   Although the initial business will be a domestic sale to Miba’s Detroit facility, this will be an opportunity to gain access to Miba’s global supply chain and hopefully eventually turn into exports.   For information on products:  http://www.miba.com/en/product-areas/friction-materials/.  For more information contact:  Dan.Kim@trade.gov.

MEXICO:  Tier 1 supplier with recently opened plant in Huejotzingo, Puebla, Mexico seeking U.S. suppliers of die cast steering components.  Interested U.S. companies can contact Senior Commercial Specialist Monica.Martinez@trade.gov for more information and specifications.

COSTA RICA:  Europartes Vega in San Jose, Costa Rica, is looking for U.S. suppliers of the following products: Tensioner & Idler Bearings, Clutch Bearings.  For more information please contact:  Roy.Fernandez@trade.gov.

ISRAEL:  A company in Israel is looking for U.S. suppliers of genuine Jeep parts.  His immediate need is for 500 air filters, Part number 56052553AA.  For more details contact:  Alan.Wielunski@trade.gov.

In the News

Opportunity to Comment on NAFTA

The U.S. Government is seeking public comments related to the North American Free Trade Agreement (NAFTA).  On May 18th, the Administration formally notified Congress of its intent to renegotiate NAFTA.  As stipulated by the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA), this notification triggers a 90-day period before negotiations with Canada and Mexico can begin.  As part of this process, the United States Trade Representative (USTR) has published a Federal Register Notice (FRN) soliciting public comments on the Agreement - which will assist the Administration in identifying its negotiating priorities. 

The FRN comment period will be open through June 12th, 2017.  To submit comments, or to request to participate in a public hearing on June 27th at the U.S. International Trade Commission in Washington, DC, please visit www.regulations.gov and search for docket number USTR-2017-0006.  (Direct Link:  https://www.regulations.gov/document?D=USTR_FRDOC_00010413).  Click the "Comment Now!" button to make your voice heard regarding this important trade policy update!

Autocare.org recently released two international market reports, the China Market Report and the Mexico Market Report.

• Mexico Market Report:  Mexico is ranked the 11th largest VIO market in the world with almost 30.3 million vehicles in operation. Its average age of light passenger vehicles on the road is 15.17 years. 29 percent are 21 years or older. Mexico-based companies imported $22.7 billion of auto parts from the U.S. and exported $64.3 billion worth to the U.S. in 2015. Visit www.autocare.org/mexicoreport17.
• China Market Report:  China’s light passenger vehicle parc is estimated at over 138.9 million units and has been growing at double digit rates for over 10 years.  It should grow to 237 million vehicles within the next three years, and surpass the U.S. by 2025. China’s repair market value is forecasted to grow by about 14 percent per year to over $188 billion in 2020. Visit www.autocare.org/chinareport17.

Fast & Furious Star to Open Custom Car Business in the UAE

A star of the Fast and the Furious movie franchise has signed an agreement to bring his custom jeep assembly business to the UAE. Souq Al Haraj, a property of Sharjah Asset Management, the investment arm of the Government of Sharjah, signed an agreement with Voltron Motors, owned by actor Tyrese Gibson.  According to this agreement, the US-based company will open a branch in Souq Al Haraj in Sharjah, which will be their first branch outside the U.S.  For additional information:  http://www.arabianbusiness.com/fast-furious-star-open-custom-car-business-in-uae-671400.html.

UAE to Bring in New Rules to Regulate Customized Car Market

According to recent media publications there are new rules for modified vehicles effective June 1 in the UAE - http://www.arabianbusiness.com/uae-bring-in-new-rules-regulate-customised-car-market--673765.html. Text of the new standards  can be purchased online in English at: https://etrans.esma.gov.ae/english/purchase-standards/pages/standard-details.aspx?standardid=48da398b-630e-e711-941b-005056b80dfb.

Argentina-Colombia Agreement Enhancing Diversification

Latin America | Autos | Mon Apr 24, 2017 - BMI View: The new automotive trade agreement between Colombia and Argentina will help Colombian vehicle production grow strongly over our full forecast period to 2021. For Argentinean producers the most important gains from the agreement will be the opportunity to diversify exports away from Brazil.

e-Commerce in Europe

In 2015, U.S. exports of digitally deliverable goods and services to Europe were more than double U.S. trade with Latin American and almost double U.S. trade with the entire Asia-Pacific Region.  Meanwhile, European policymakers continue to promote the lowering of trade barriers between their countries and have been encouraging the free movement of goods and services.  To find out more about exporting via ecommerce:  www.export.gov/eCommerce and subscribe to the newsletter.  To watch Getting to Global eCommerce interviews subscribe to the partner channel here:  https://www.youtube.com/channel/UCWJ3GBJGyqhA1RHGH1Rofiw 

To learn more about the Getting to Global public/private partnership visit  www.gettingtoglobal.com/about-us/ and register.  

Puerto Rico Trade Mission Recap In April 2017, the U.S. Department of Commerce, U.S. Commercial Service in Puerto Rico, held their first trade mission of U.S. Puerto Rico companies to Chile.  The mission was supported by the U.S. Commercial Service in San Juan and the Foreign Commercial Service in Santiago, Chile.  With Chile’s economy growth at 5 percent per year, the mission presented an excellent opportunity for companies to pursue business in the region.  The photo was provided by Jose Burgos, Director of the U.S. Commercial Service Office in Puerto Rico and shows the entire delegation including Foreign Commercial Service Santiago staff members.

What our Customers are Saying!

Our client’s increased revenues by an average of $622,575 over the last 12 months from our agency’s assistance! Reach out and find out how we can help your company boost export sales.

The automotive industry is essential to the U.S. economy.  It is one of the largest employers, supporting more than 8 million U.S. jobs and is the largest manufactured goods export sectors in the U.S.  The Automotive & Transportation Team of the U.S. Commercial Service is dedicated to enhancing the global competitiveness of the U.S. auto industry, expanding market access, and increasing exports. To learn more about you how you can receive assistance in finding market intelligence, developing your export strategy, connecting with international buyers, or support at trade events, contact your Local Trade Specialist in one of our 100 offices around the U.S.

This newsletter is brought to you by the U.S. Commercial Service Global Automotive & Transportation Team. You are welcome to contact us at any time at autoteam@trade.gov.