July 5, 2011

State of Alabama
Press Release: Alabama Department of Commerce

Exports of Alabama-built Vehicles Up 28%

Published: Sunday, July 03, 2011
From the bustling population centers of the Far East to the laid-back tropical locales of the Caribbean, Alabama-built vehicles are on the road.

SUVs, sedans, minivans and other rides produced in the state's three auto assembly plants also are popping up across the arid climates of Middle Eastern nations, as well as countries surrounding the South American rainforests.

Alabama's automakers -- Mercedes-Benz, Honda and Hyundai -- export their products to far-flung spots around the globe, and those numbers are rebounding in 2011 amid an overall industry recovery.

The value of vehicles exported from the state this year totaled $1.4 billion through April, a 28 percent improvement over last year, according to the latest data from the Alabama Development Office.

The luxury models made by Mercedes at its Tuscaloosa County plant represent the lion's share of the exports, said Hilda Lockhart, director of ADO's International Trade Division.

"I continue to be amazed that these cars are going to some countries where larger vehicles are not so easy to move about," she said, citing the limited infrastructure in developing areas and congestion in the fast-growing markets of China and India.

"The growth in the exports of vehicles -- and high-end cars -- gives a good indication that the global economy is improving," she added.

So far this year, Canada is the state's largest auto export market, followed by Germany, China, the United Kingdom and Mexico.

But that's only part of the story, as much smaller numbers of vehicles end up in dozens of scattered countries.

Among the current export markets are West Africa's Benin, New Caledonia in the South Pacific and conflict-scarred Libya.

Other markets are coming on strong, Lockhart said.

Vehicle exports to India, for instance, have risen more than 600 percent this year to $18.2 million. And in Chile, they have grown nearly 150 percent to $10.8 million.

Auto exports also are the key driver of Alabama's overall exports, which totaled $5.6 billion through April, up 18 percent from 2010.

Felyicia Jerald, spokeswoman for Mercedes' Alabama operations, said the top markets for the automaker's state-made models, besides the United States, are Germany, China, the United Kingdom and Canada.

"Others that fall somewhere in the top 10 depending on the model are Russia, India, Italy, Australia, the Ukraine and South Africa," she said.

The plant is the sole global source of the M-Class SUV, GL-Class full-sized SUV and R-Class crossover. About 60 percent of its output is exported, and that often includes obscure corners of the world.

In Africa, for instance, Mercedes has long been a favorite auto nameplate among the ruling classes, although such choices have caused controversy.

Two years ago, residents of Harare, the capital city of Zimbabwe, were outraged over a proposal to buy their mayor a $152,000 M-Class.

That price tag, about three times the SUV's starting price in the U.S., also reveals the extensive customization for some vehicles headed to foreign markets.

Mercedes doesn't advertise such adjustments, but it has been known to add armored plating and other extras, depending on the customer. Another key modification is right-hand drive for certain countries.

Meanwhile, other vehicles headed overseas go through subtle changes on Alabama's auto assembly lines.

At Hyundai's Montgomery plant, Sonata sedans and Elantra compacts set to be shipped to Canada get minor adjustments, including speedometers and odometers in kilometers, instead of miles, said spokesman Robert Burns.

Canada is the largest export market for the plant, with about 15 percent of its output sent there so far this year. The Elantra, redesigned late last year, was the automaker's top-selling vehicle in Canada in May.

"It really is a very popular vehicle in the Canadian market," Burns said.

The Montgomery plant also sends vehicles to Puerto Rico and Guam -- sometimes just a handful each month -- where they are sold at dealerships, or, in the case of Puerto Rico, bought by rental car agencies.

But since both markets are U.S. territories, they aren't counted in the state's export tally.

For Honda, exports comprise less than 10 percent of the output of the automaker's Lincoln plant, the sole global source of the Odyssey minivan, Pilot SUV and Ridgeline pickup. The vehicles are shipped primarily to the Middle East, South America and Central America.

But those incremental sales are profitable, said Honda spokesman Ed Miller, and they help raise the profile of the automaker and its products.

The Middle East has been a key growth area for Honda, as its overall exports to the region have increased some 200 percent.

"It's traditionally been a market where larger vehicles are predominate, and part of that is the price of fuel.¤.¤.gasoline is a whole lot cheaper in the Middle East," Miller said.

Middle Eastern buyers also are attracted to the utility of Honda's Alabama models.

"The Odyssey is primarily a people mover, the Pilot can do duty as a people mover and the Ridgeline can do a lot of heavy-duty chores," he said.

As for modifications on exported models, most of the changes are minor.

But one notable adjustment for the vehicles headed to Saudi Arabia is the lack of tinting on the windows, which is not allowed there.

As a company, Honda tailors models for individual markets, and the Odyssey, Pilot and Ridgeline are designed for the American market, Miller said.

"What we're really doing in these foreign markets is selling an American vehicle to the audience that wants it over there," he said. "We're exporting the good will of the country and Alabama around the world."

Alabama's auto exports
April 2011 YTD, $1.4 billion
April 2010 YTD, $1.1 billion

Top export markets for Alabama-built vehicles
United Kingdom

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