My analysis and dissection of auto parts manufacturing has become a bit like a plane starting its landing procedure. It feels like I’ve been circling around for quite a while and it’s taking me a bit of time to land. That said, I hope to land in this entry.
In the previous entry, I discovered that I had more question::
- What percentage of auto parts manufactured in France and Korea end up outside of their respective countries vs stay in.
- Source: http://www.worldstopexports.com/automotive-parts-exports-country/
- France is 7th on the list with $16.8 billion USD
- Korea is 5th on the list with $24.3 billion USD
Things are now starting to make sense. France and Korea should definitely be high on the list of exports for auto parts since they both have 2 to 3 major automobile manufacturers in their respective countries. The demand is both internal and external.
- How many automobiles do France and Korea manufacture each year? Is there enough information out there to determine how many automobiles are shipped to other countries for sale? If possible, list the auto manufacturers in France and Korea and determine market share of those companies around the world.
- Korea – exports $69.1B (13.1% of exports)
- Hyundai(5th largest in the world)
- 40% of cars produced are in Korea – 3.91M (2012) = 1.564M
- Kia (32% owned by Hyundai)
- France – exports $44.1B automobiles and vehicle parts ($16.1B)
- Pugeot / Citreon(9th largest in the world)
- Renault (4th largest in the world)
More corroborating data shows internal and external demand for auto parts in France and Korea.
- Are there 1 or 2 key government regulations in France and Korea that help support the auto parts industry. Perhaps upstream regulations are in place for easier or incentive based import of raw materials or export of auto parts. Maybe critical downstream regulations that create demand? Another item to look at would be whether major trade partners have progressive regulations which allows for low CKD. This would then allow countries to import parts from France/Korea.
- Major Korean imports – 5th Iron/Steel $15.4B
- Major Korean exports – Automobiles $69.1B(13.1%)
- Export partners – China($142B), USA($64.1B), Japan($34.6B),Singapore($24.8B),Hong Kong($23.3B)
- Import partners – China($80.3B), Japan($58B), USA($40.2B), Saudi Arabia($34.2B),Qatar(@23.5B)
- Major French imports – machinery/equipment, crude oil, plastics, chemicals
- Major French exports – Automobiles $44.1B (8.7%)
- Export partners – Germany ($82.2B), Belgium-Luxembourg($51.3B), USA(#39.8B), UK($39B), Italy($38.4B)
- Import partners – Germany($120B), Belgium-Luxembourg($55.6B),China($50.4B),Italy($49.8B), Spain($42.6B)
What type of international trade regulation exists between Korea and China, France and Germany?
France and Germany – Trade regulation highlights
- Part of TARIC system, duties are applied to imports from non EU countries.
- TARIC focus is to consolidate and integrated European market. Combined bilateral, regional and multilateral policies
- Duties levied on imports from non EU countries are moderate
- Most raw materials enter duty-free or at low rates, most manufactured goods are subject to rates between 5 and 17 percent
Korea and China – Trade regulation highlights
- Have taken major strides to setup bilateral free trade agreement
- A bilateral trade agreement between the two countries would open up competing exporters of manufactured products to each other, allowing for the trade of key components for markets such as technology and automobiles
Other key factors to consider when looking at international trade regulations between France and Germany, Korea and China:
- non-tariff barriers
France and Germany, Korea and China have eased trade regulations and created solid partnerships that bolster each countries economic conditions. One industry that benefits from this partnership is the Automotive Parts Manufacturing sector in both France and Korea.
The data above shows us that both internal and external demand in combination with eased trade regulations have propelled both auto parts manufacturing and automobile manufacturing in France and Korea to top 6 in the world.
In my next post, I will take what I’ve learned to delve into a deeper look at Canada’s import/export story , trade partnerships and existence of subsidies, tariffs and non-tariff barriers