The automotive parts industry has had to become more global in outlook and more competitive to respond to the needs and demands of automakers. The deficit is starting to climb again. Exports have increased 16 percent annually since 1989. Most of the import competition is from Japan. Over one-third of U.S. parts imports comes from Japan, and the trade deficit with Japan has not been materially affected by the strengthening of the yen.
Exports are critical.
Exports have become critical for the U.S. auto parts industry during its recent restructuring. Exports as a share of output have jumped from 18.5 percent in 1989 to 27.2 percent in 1991. Overall market growth is slowing, but markets in developing countries grow. Developing countries should offer the best opportunities with market growth around 5 percent. In the BEMs, total market growth should be almost 6 percent annually, but U.S. exports should grow over 8 percent annually.