Wondering why auto manufacturers are targeting the United States as one of the prime locations for manufacturing and exporting their vehicles? It’s simple. The reasons are: lowered labor costs, excess plant capacity, currency exchange rates, quality work and free trade pacts. Five years ago, this was not the case, as the recession during that time forced people to spend less on high-cost items like cars, thus the low for demand for vehicles. During that time, US plants hardly reached production capacity. With the excessive capacity, automakers shifted their production to the US. Now, both the US-based and foreign carmakers are exporting their vehicles to other countries.
According to Ed Kim, director of industry analysis at AutoPacific, the strong yen also forced Japanese carmakers like Toyota, Nissan and Honda to shift their production from Japan to the US. The strong yen makes manufacturing more expensive in Japan than in the US. Kim noted that at the moment, the US is a “low-cost manufacturing zone,” encouraging automakers to build their vehicles in the country. Kim added that at the moment, exporting from the US seems to be the right move for car manufacturers.
Nissan exports some models from the US to 46 foreign countries and US territories, according to David Reuter, vice president of corporate communications for Nissan Americas. Reuter disclosed that the Nissan Altima is the number one exported vehicle, with deliveries to Canada, Mexico and the Middle East. Nissan will unveil this week a redesigned 2013 Altima at the New York International Auto Show. Reuter expects the model to further hike exports from the US. He forecasts that in the next two to three years, the company will almost triple the volume of vehicles exported from the US with the number of destinations increasing to more than triple.