Welcome!

News Feed Item

Scotiabank: Geographic Diversification Is Crucial for Auto Exporters

TORONTO, ON--(Marketwired - April 30, 2014) - Global vehicle sales remained strong in March, climbing 6% above the previous year, according to the Scotiabank Global Auto Report released today. The increase was driven by a double-digit increase in Asia, an ongoing recovery in Western Europe and some improvement in the U.S., following several months of severe winter weather.

"Most major vehicle producers are geographically diversified, or in the case of emerging markets such as China, assemble cars and trucks mainly for their domestic market," said Carlos Gomes, Scotiabank's Senior Economist and Auto Industry Specialist. "Canada has the most export-intensive auto industry in the world, with nearly 90% of overall production geared for export. However, Canada is the only country that relies almost exclusively on one market for its auto exports and has underperformed both its NAFTA partners and other major vehicle-producing nations in the current expansion."

Highlights in the report include:

  • Canada remains the second-largest vehicle exporter to the U.S., after Japan, and a global 'top 10' vehicle manufacturer. Canadian car and truck output totalled 2.38 million units last year, in line with the average of the past decade.
  • The auto sales recovery in Western Europe continues to build momentum, with eight countries posting double-digit increases in March, up from seven the previous month. The U.K. reported an 18% year-over-year (y/y) jump in vehicle purchases, lifting monthly volumes to the highest level since March 2004.
  • China is the fastest growing market for German luxury brands, with auto exports to China surging sevenfold over the past decade and now account for nearly 40% of overall German vehicle shipments to Asia, double the share of a decade ago. U.S. automakers are also making solid gains in China and the wealthy markets of the Middle East.

Read the full Scotiabank Global Auto Report online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.

Scotiabank is a leading financial services provider in over 55 countries and Canada's most international bank. Through our team of more than 83,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers. With assets of $783 billion (as at January 31, 2014), Scotiabank trades on the Toronto (TSX: BNS) and New York Exchanges (NYSE: BNS). Scotiabank distributes the Bank's media releases using Marketwired. For more information please visit www.scotiabank.com.

GEOGRAPHIC DIVERSIFICATION IS CRUCIAL FOR AUTO EXPORTERS 

Recent Global Sales Developments

Global vehicle sales remained strong in March, climbing 6% above a year earlier alongside a double-digit increase in Asia, an ongoing recovery in Western Europe and some improvement in the United States following several months of severe winter weather. China and Japan led the way in Asia, with volumes jumping 15% y/y. Sales in Japan posted the seventh consecutive double-digit gain, as households bought new vehicles ahead of the April 1st increase in the national sales tax.

The auto sales recovery in Western Europe continues to build momentum, with eight countries posting double-digit increases in March, up from seven the previous month. The United Kingdom reported an 18% y/y jump in vehicle purchases, lifting monthly volumes to the highest level since March 2004. The improvement was broad-based and was buoyed by economic growth of more than 3% y/y -- the strongest pace since late-2007.

CANADA -- LAGS THE EXPORT DIVERSIFICATION TREND

Canada has the most export-intensive auto industry in the world, with nearly 90% of overall production geared for export. However, Canada is the only country that relies almost exclusively on one market for its auto exports and has underperformed both its NAFTA partners and other major vehicle-producing nations in the current expansion. All other major vehicle producers are geographically diversified, or in the case of emerging markets such as China, assemble cars and trucks mainly for their domestic market.

Canada remains the second-largest vehicle exporter to the United States, after Japan, and a global 'top 10' vehicle manufacturer. Canadian car and truck output totalled 2.38 million units last year, in line with the average of the past decade. Exports to the United States exceeded 2 million vehicles, but shipments outside of North America were virtually non-existent. Ninety seven per cent of Canada's exports are destined to its NAFTA partners, mainly the United States. In contrast, both the United States and Mexico have significantly boosted their exports outside of North America over the past decade. U.S. vehicle exports outside of NAFTA now exceed one million units per annum and account for 10% of overall U.S. production, quadruple the level of a decade ago. Export growth outside of North America has been even stronger for Mexico and totals 20% of vehicle assemblies.

Other major vehicle producers have also significantly increased their intercontinental exports over the past decade. Shipments destined to other continents have increased by 6.2% per annum over the past decade, more than a percentage point faster than exports to the "home region". Recent Free Trade Agreements with the European Union and South Korea provide Canada with the potential for much-needed exports outside of North America, especially since sales in the region have been growing at a slower pace than the global total. North America now accounts for only 22% of global car and truck sales, down from 35% a decade ago.

Even with the exclusive focus on the United States, Canadian vehicle exports have lost significant share in the world's second-largest auto market. Canada's share of overall U.S. vehicle imports dropped to only 20% last year, down from a peak of 31% in 2000 and an average of 25% since the mid-1990s. Mexico has made significant gains at the expense of Canada, but all other major vehicle producers have also made inroads. Vehicle exports from Mexico to the United States have jumped 22% since the new millennium, but this pales with the nearly 50% surge for the combined exports from Germany and South Korea. In fact, vehicle exports from these two countries to the United States totalled nearly 2 million vehicles last year, nearly matching shipments from Canada. In addition, these countries also continue to make gains in other markets. As a result, Canada's share of global vehicle exports has fallen to only 6%, down from a double-digit share as recently as 2002. Furthermore, Canada is one of only two global 'top 10' vehicle producers where vehicle assemblies have failed to surpass the level prevailing prior to the latest global economic downturn.

Japan is the other major vehicle-producing country where assemblies remain below pre-crisis levels, as automakers have shifted assemblies from the island nation due to high operating costs, and until recently, a strengthening currency. However, even as Japanese automakers opened new plants in North America and other jurisdictions, car and truck exports from Japan to the United States have continued to edge higher, climbing to 3.1 million units last year, from 3 million at the turn of the millennium. Japan also remains the world's largest vehicle exporter, shipping 4.7 million vehicles overseas last year, compared with German exports of 4.4 million.

Export-intensities for the industrialized major auto-exporting nations (excluding Canada) average around 50% of domestic production, with half of all exports destined to other continents. While the export concentration is higher in Western Europe, the European Union (EU 15) now absorbs only 40% of Germany's auto exports, down from 55% a decade ago. Meanwhile, one-quarter of Germany's exports are now destined to Asia and nearly 20% are exported to North America. The trend is similar for the industrialized Asian vehicle-producing nations, with only one-quarter of exports from Japan and South Korea remaining in Asia (including the Middle East).

China is the fastest growing market for German luxury brands, with auto exports to China surging sevenfold over the past decade and now account for nearly 40% of overall German vehicle shipments to Asia, double the share of a decade ago. U.S. automakers are also making solid gains in China and the wealthy markets of the Middle East. For example, Saudi Arabia is the fifth-largest market for vehicles assembled in the United States and the United Arab Emirates is the sixth. Exports to both markets are concentrated in large luxury cars and SUVs, due to low gasoline prices and a large number of high-net-worth households in both countries.

In contrast to industrialised auto-producing nations, emerging vehicle manufacturers -- China, Brazil and India -- have a much greater focus on their domestic market. China exports less than 5% of the vehicles it produces. Export intensities are somewhat higher for Brazil and India, but represent less than 20% of domestic output. Furthermore, the emerging vehicle-producing nations also tend to be more geographically diversified than Canada. Only 35% of all vehicles exported from China and India remain in Asia. In the case of Brazil, 75% of its exports are destined to its MERCUSOR neighbours -- Argentina, Paraguay, Uruguay and Venezuela. 

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, showed how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningful f...
Creating replica copies to tolerate a certain number of failures is easy, but very expensive at cloud-scale. Conventional RAID has lower overhead, but it is limited in the number of failures it can tolerate. And the management is like herding cats (overseeing capacity, rebuilds, migrations, and degraded performance). Download Slide Deck: ▸ Here In his general session at 18th Cloud Expo, Scott Cleland, Senior Director of Product Marketing for the HGST Cloud Infrastructure Business Unit, discusse...
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, will discuss recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model f...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...