Quarterly Newsletter - Fall 2017

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• Focus On: The Rail Industry
• Client Successes
• Upcoming Events
• Market Research
• In the News
• NAFTA Negotiations Underway

Focus On: The Rail Industry

Despite numerous advances in transportation, rail continues to be a vital method to move goods. Rail accounts for approximately 40% of U.S. freight moved by ton-miles (the length freight travels) and 16% by tons (the weight of freight moved). Foreign governments often need the support of U.S. companies when investing in this type of infrastructure. Four countries (Argentina, Turkey, Russia, and Uruguay) are currently undertaking massive rail projects. Argentina Argentina is implementing the most ambitious transport plan in its history – worth $33.2 million.  Challenges across the Argentine Transportation Sector include: 40% of the network is in poor condition 95% of freight is transported by truck 5% of total freight is transported by rail Serious absence of public transportation for citizens Low quality infrastructure Needed improvements in security & air traffic control As part of its long-term plan (2015-2027), Argentina intends to build a national road network, undertake large infrastructure projects, and make major improvements to port access. This includes transportation integration with Chile to strengthen the regional economies. In 2017 alone, Argentina is renewing 1,593 km of rails and employing almost 21,000 people. View the State Department's recent direct line presentation on the topic to learn how you can take advantage of this opportunity! Turkey  Turkey’s transportation and logistics sector is one of the country’s fastest growing industries -- averaging a growth rate of 20% over the last 5 years. Traffic has become a challenging issue, compelling local municipalities to invest heavily in Intelligent Transportation Systems (ITS). Turkey has doubled its transportation industry investments budget from 1 to 2% of GDP. The Turkish government currently has plans to expand and improve: Railroad Airports Land transportation (Roads & Highways) Marine transportation  Other sectors in high demand include:  Traffic engineering, management, measurement, control and signalization systems Electronic detection, and camera & security systems Variable message, communication and digital information systems Lighting Systems Tunnel SCADA, vehicle tracking and fleet management, data management Marine Technology (Port superstructure, Vessel tracking) To learn more about the rail opportunities in Turkey, visit our Country Commercial Guide on Turkey Transportation Technology and Equipment. Russia Russia’s government plans to modernize its aging rail system which is primarily run by the state owned enterprise, OAO Russian Railways (RZD). In 2017, state funding for RZD to improve the rail system is expected to exceed $8 billion USD. The proposed funding includes: Purchasing 450 new locomotives Modernizing the Trans-Siberian Railroad and Baikal Amur Mainline Constructing a high-speed line from Moscow to Kazan In the long-term, Russia also plans to have a network of high-speed lines between its major cities by 2030. This project is expected to cost RUB 5 Trillion (~84 billion USD). The proposed lines include: Moscow – Adler Moscow – Kazan – Yekaterinburg Moscow – St. Petersburg To learn more about the rail opportunities in Russia, visit our Country Commercial Guide on Russian Rail. Uruguay Uruguay is currently in the process of building a railway from its capital city Montevideo to the city of Paso de los Toros. This massive project will require assistance from the private sector to design, finance, build, and maintain the railway. Uruguay is a particularly favorable business climate because of its: Political, legal, and social stability Macroeconomic stability with 12 years of uninterrupted growth High quality business resources One of the highest and best distributed incomes in the region, and high quality of life in the capital city To learn more about the business environment of Uruguay, visit our Country Commercial Guide, and Uruguay government posted  presentation their “Central Railway” project here and here. Industry Events Key upcoming industry events are the Railway Interchange Show from September 17th-20th, 2017 at the Indiana Convention Center in Indianapolis and the “Railway Istanbul” Railway Technologies, Rail Systems, Mass Transport & Infrastructure Fair from December 6th-9th, 2017. To learn more about potential opportunities in this sector or worldwide, please contact your local trade specialist. Back to the top.

Client Successes

ThermOmegaTech designs and manufactures advanced, reliable, compact, self-actuating valves for temperature control and the conservation of energy.

“U.S. Commercial Services in Philadelphia, Germany, Russia and the Nordic countries were extremely helpful for future growth in the European rail industry. I was able to get very precise research information on the European markets for our railroad products. They were very helpful in lining up European companies and key contacts. Without their help, I would still be searching the European markets spinning my wheels. They are by far a very efficient organization and the level of communication between countries is outstanding. I found it a real pleasure to work with each group. I would personally recommend other companies to use the U.S Commercial Services.” - Paul Driscoll, VP of Sales & Railroad

Navistar produces diesel engines, medium & heavy trucks, and provides parts & services.

"We couldn't have accomplished what we have without Commercial Service's support. We are now trying to emulate what happened in Vietnam and are using it as a benchmark worldwide."- Angie Kim, Director of Export Sales

"The information Commercial Service provides is invaluable and we appreciate all the time and effort."
- Kyle Howard, VP of Sales

Ameroc Export manufacturers and services a variety of tires.

"The assistance of the Trade Specialists in Costa Rica was an excellent experience and well worth the investment. It provided me with great partners which would have been impossible for me to do this alone!” -Sophia Leaguedi, CEO

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Upcoming Events

Discover Global Markets U.S. Manufacturers to Europe & Beyond, Cleveland, Ohio, September 18-20, 2017: In addition to presentations and automotive-specific break-out sessions, this event will feature one-on-one sessions with U.S. Commercial Diplomats from Europe, as well as, automotive- and aerospace-related procurement specialists from leading OEM’s.  For more information, visit the event page.

APTA EXPO, Georgia World Congress Center Atlanta - October 9-11, 2017:  Held every three years in conjunction with the American Public Transportation Association's (APTA) Annual Meeting, EXPO is public transit's premier showcase of technology, products and services. Be at the center of the growing public transportation industry where innovation and technology converge to accelerate every mode of public transportation.  Event details here.

Automotive Warehouse Distributors Association (AWDA) Conference Las Vegas, Nevada - October 29 - 31, 2017: The AWDA Conference brings the leading manufacturers and wholesalers of the industry together to engage in productive and profitable business and networking opportunities. Details here.

ITS World Congress Montreal, Canada - October 29 - November 2, 2017: Join the U.S. Commercial Service and the Intelligent Transportation Society of America for exhibits, demonstrations and industry-leading education on transformational transportation and integrated mobility. Last year’s Congress drew 11,000 participants from 70 countries. For US exporter support, contact kellie.holloway@trade.gov.  Event details here. 

Automotive Aftermarket Products Expo (AAPEX) Las Vegas, Nevada - October 31 - November 2, 2017: As the annual, trade-only showcase for the $356 billion automotive auto care market, the AAPEX engages more than 132,000 professionals from around the globe. Event details here. 

Specialty Equipment Market Association (SEMA) Show ,Las Vegas, Nevada – October 31 – November 3, 2017:  The annual, trade-only SEMA Show features 2,400 exhibiting companies that offer the latest automotive specialty products related to enhancing a vehicle’s performance, appearance, safety, or comfort.  Approximately 25 percent of the buyers that attend SEMA are from outside of the United States. On October 30, U.S. companies can participate in three roundtable discussions regarding SEMA’s overseas trips to China, Australia, and the Middle East, and hear tips from buyers and experienced exporters about selling to these regions. 

Automotive Meetings Bursa, Turkey - November 14 - 16, 2017: Join the U.S. Commercial Service and Advanced Business Events for the only auto supply chain event in Turkey for the automotive and aftermarket industry. AM Bursa is a unique venue for suppliers and service providers interested or doing business in Turkey to secure direct meetings with large Tier I and Tier II automotive companies. Engineering, procurement, supply chain, fabrication, commodity teams, suppliers and service providers will meet through pre-arranged one-to-one business meetings, without the distractions found at traditional exhibitions. Don’t miss out on the opportunity to participate! Event details here.

55th Annual National RV Show Louisville, Kentucky - November 28 - November 30, 2017:  As the sole "trade only" recreational vehicle (RV) industry show currently held, there is no public attendance. The show provides an important marketplace for recreational vehicle dealers, owners of accessory stores and campground operators to view the products of numerous RV manufacturers and suppliers of OEM parts, services and accessories in one location. The show provides exhibitors an excellent opportunity to expand product lines into new regions, domestically and internationally; see competing products; and strengthen distribution networks. Event details here. 

Automechanika Shanghai, China - November 29 - December 2, 2017: Automechanika is one of the leading international meeting places for the automotive sector. It spotlights innovations and solutions in the fields of parts, systems, tuning, workshop equipment, bodywork & paintwork, car wash, IT & management and the latest automobile services. U.S. companies can exhibit anywhere on the show floor or in the U.S. Pavilion. Event details here. 

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Market Research

Market Report: Recreational Transportation  The recreational transportation sector is perhaps the only labor-intensive sector of the U.S. economy that supports a positive trade balance. With growth projected into the future and burgeoning international demand for U.S. products, exports are expected to reach $7 billion in 2018, supporting 180,000 American manufacturing jobs.  Key industries of the Recreational Transportation sector are recreational marine products, recreation vehicles (RVs), motorcycles, and miscellaneous vehicles (ATVs, snowmobiles and golf cars). Our 2016 Top Markets Report on Recreational Transportation ranks the top 30 export markets for this sector as a whole, as well as the top 10 markets for recreational marine products, vehicles, miscellaneous vehicles, and the top 15 markets for motorcycles. Be sure to check it out before heading to the National RV Show in Louisville. For more market insights, see the Automotive Parts Top Market Report. Back to the top.

In the News

887 Million Vehicles Manufactured Worldwide In 10 Years!

Quoting Business recently released an info graphic showing the explosive growth of the auto industry in the last decade. While the worldwide population grew by 13%, the amount of vehicles on the road grew by 42%! This rapid growth in the market presents many opportunities for the automotive industry, but also many challenges as congestion and pollution increase.

Autonomous Vehicle Technology

The automotive industry has changed dramatically in the last 100 years, but self-driving vehicles may be the most dramatic change yet. A recent report by Rand examines the many possible benefits and drawbacks of this rapidly developing technology. The decrease in human error may ease traffic congestion, but regulations remain unclear.

Volvo Announces Plans to go 100% Electric, Plug-in, or Hybrid by 2019

The shift to self-driving is not the only change in the auto industry. Many assumed the change to electric would happen slowly due to high costs, limited range, and lack of charging infrastructure. The recent announcement by Volvo shows electric may be coming sooner than we think.

California Auto Company Wins Export Achievement Award

After working with the U.S. Commercial Service, McLeod Racing of Placentia, California was honored with an Export Achievement Certificate. Their exporting efforts have had a great impact on the local economy, including three new jobs. Read the press release to learn more about their success story and how the U.S. Commercial Service can help your company do the same.

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NAFTA Negotiations Underway

Renegotiations for the North American Free Trade Agreement (NAFTA) kicked off in Washington, DC Aug. 16-20, as negotiators formally began restructuring the 23-year-old trade agreement on the first day the U.S. could statutorily do so. The initial talks focused mostly on logistics and agenda-setting. Negotiators established working groups for specific issue areas, identified their NAFTA-country counterparts and pinpointed the contentious issues that will take longer to negotiate. 

In July, the Office of the U.S. Trade Representative released the U.S. Objectives for the NAFTA Renegotiation. Key objectives likely to impact the auto industry include improving the U.S. trade balance and reduce the trade deficit with the NAFTA countries, promoting greater regulatory compatibility, updating and strengthening the NAFTA rules of origin to ensure that the benefits of NAFTA go to products genuinely made in the United States and North America and to incentivize the sourcing of goods and materials from the United States and North America.