The U.S. auto industry is still importing vehicle parts at record volumes, but there is hope on the horizon for U.S. plants.
Parts industry officials believe the decline in the U.S. dollar against the euro and the Japanese yen may swing some demand away from offshore production.
"European parts are definitely getting more expensive," says Brian Duggar, international affairs director for the U.S. parts trade group, the Motor and Equipment Manufacturers Association.
The dollar traded last week in the range of $1.33 to the euro, a sharp discount from the 1-to-1 parity of two years ago. And instead of the 120 yen to the dollar of two years ago, the exchange is running closer to 102 to the dollar.
Auto companies don't base strategic sourcing decisions on currency swings, says Neil De Koker, president of the Original Equipment Suppliers Association in Troy, Mich. But he says that if the dollar remains at its present level against the euro and yen, more U.S. sourcing will follow.
"It doesn't happen quickly, but it will happen," he says.
Trade figures released last month by the U.S. Commerce Department show a decline in imports of all types from $53.5 billion in August to $51.6 billion in September.
But parts have been running at historically high levels this year. The industry imported $62 billion worth of parts during the first nine months of this year, according to Commerce Department data. That was a 12 percent increase over the $55.16 billion total for the first nine months of 2003.
Canada, Mexico, Japan and Germany remain the biggest source of imported auto parts for the United States.
Japanese imports rose 14 percent to $11.55 bil-lion through the end of September. Canadian-made parts rose by nearly 11 percent to $15.11 billion for the period. And Mexican imports grew 10 percent to $17.20 billion during that same time.
Parts imports from China rose more than 36 percent to $2.83 billion in the first nine months of this year.
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