Automotive resource guide

Aut o m o t ive Reso urce
Guide

ACKNOWLEDGEMENT

The Automotive Resource Guide was made possible by:

Natasha Keylard, U.S. Commercial Service The Hague, the Netherlands
Eduard Roytberg, U.S. Export Assistance Center Ontario, CA
Joel Reynoso, U.S. Export Assistance Center Newark, NJ

For concept development & overall coordination.

The U.S. Commercial Service international staff worldwide

For their country assessments.

_____ ___________________________Automotive Resource Guide__________________________

Table of Contents
______________________________________________________________________________________________________

Introduction ………………………………………………………………………. 2
What can the Global Automotive Team do for you? …………………………….……. 3
How to use this guide ………………………………..………………………………………. 4
Sub-sector Matrix ………………………………..………………………………………. 5

Australia ………………………………………………………….……………. 7
Austria ………………………………………………………….……………. 9
Belgium ………………………………………………………….……………. 11
Brazil …………………………………………………………………….…. 13
Bulgaria ………………………………………………………………………. 16
Canada ………………………………………………………………………. 18
China ………………………………………………………………………. 21
Columbia ………………………………………………………………………. 23
Costa Rica ………………………………………………………………………. 26
Croatia ………………………………………………………………………. 28
Czech Republic ………………………………………………………………………. 29
Denmark ………………………………………………………………………. 31
Dominican Republic ………………………………………………………………………. 33
Ecuador ………………………………………………………………………. 35
El Salvador ………………………………………………………………………. 36
Finland ………………………………………………………………………. 38
France ………………………………………………………………………. 40
Germany ………………………………………………………………………. 42
Honduras ………………………………………………………………………. 50
Hungary ………………………………………………………………………. 53
India ………………………………………………………………………. 55
Israel ………………………………………………………………………. 57
Japan ………………………………………………………………………. 59
Jordan ………………………………………………………………………. 61
Kazakhstan ………………………………………………………………………. 64
South Korea ………………………………………………………………………. 66


Table of Contents
_____________________________________________________________________________________________________________

Kuwait ……………………………………………………………………. 68
Lebanon ……………………………………………………………………. 70
Malaysia ……………………………………………………………………. 71
Mexico ……………………………………………………………………. 72
Morocco ……………………………………………………………………. 75
Netherlands, The ……………………………………………………………………. 76
New Zealand ……………………………………………………………………. 78
Nigeria ……………………………………………………………………. 80
Pakistan ……………………………………………………………………. 82
Panama ……………………………………………………………………. 85
Philippines ……………………………………………………………………. 87
Poland ……………………………………………………………………. 90
Romania …………………………………………………………………….. 93
Russia …………………………………………………………………….. 95
Singapore …………………………………………………………………….. 98
Slovakia ………………………………..…………………………………… 101
South Africa ………………………………..…………………………………... 103
Spain …………………………………..………………………………...105
Sweden ……………………………………..……………………………...106
Switzerland ………………………………………..……………………………108
Taiwan ………………………………………..……………………………110
Thailand ………………………………………..……………………………111
Turkey ………………………………………..……………………………113
United Arab Emirates ………………………………………..……………………………116
United Kingdom ………………………………………..……………………………118
Uzbekistan ………………………………………..……………………………120
Venezuela ………………………………………..……………………………120
West Bank and Gaza ………………………………………..……………………………123
……
Key e-Resources ………………………..….…….…….……………………………124


Introduction
_______________________________________________________________________________________________________________

For quite a number of years, we have witnessed U.S. companies struggle with the identification of
promising export markets. It was difficult to determine which country may have potential for your product
or service. In fact, exporters were spending valuable company resources assessing markets that held
little promise. As a result, my colleagues and I worked together to create a solution – the Automotive
Resource Guide. We are proud to offer you the second edition of the Automotive Resource Guide, which
identifies markets where U.S. automotive products or services are likely to succeed. The guide offers
foreign market information and additional resources to help increase your international sales.

The Automotive Resource Guide was developed by the Global Automotive Team, a vital part of the
International Trade Administration's U.S. Commercial Service. We are dedicated to serving you, the U.S.
automotive industry. The Global Automotive Team is comprised of a network of domestic and
international automotive specialists, whose primary objective is to help both large and small automotive
firms expand into foreign markets. Our Team members are located in 102 offices throughout the United
States and in U.S. Embassies and Consulates in more than 80 countries across the globe.

Our goal is to promote U.S exports in projects that transcend geographical lines. We focus on the
changing world economy in an effort to get you involved in international opportunities before the
competition. We are well-connected and have the ability to open doors, as demonstrated by our ability to
get U.S. companies involvement in projects with major foreign OEMs, such as Renault-Nissan, Hyundai-
Kia and Volkswagen.

We do not play down the challenges facing the U.S. motor vehicle industry, the largest manufacturing
industry in the United States. We consciously focus on areas where we can make a meaningful
contribution because we view the industry as being dynamic and tremendously successful.

As we move forward, your feedback will become an important barometer for shaping our activities. If the
Automotive Resource Guide is useful to you, please share your experience with us and help us identify
areas of improvement by emailing us directly at Eduard.Roytberg@trade.gov or
Natasha.Keylard@trade.gov. As a government resource for U.S. companies, our team relies on your
comments and needs to hear whether we are serving you well.

We look forward to opening up markets on your behalf and delivering opportunities to your doorstep.

Sincerely,

Eduard Roytberg Natasha Keylard
Global Automotive Team Leader 2010-2011 Global Automotive Team Leader 2008-2009


What Can The Global Automotive Team Do For You?
______________________________________________________________________________________________________________

Members of the Global Automotive Team are your
primary export resource and should be your first
point of contact when you plan to expand Export Success Stories
internationally. Why should you work with the
Global Automotive Team?  Gold Eagle Company, a
manufacturer and distributor of
aftermarket fluids was put in
 Our Team of international trade specialists contact with a Dominican
provide export assistance by helping you distributor of engine lubricating oils
identify markets of opportunity and connecting when the foreign buyer required
you with qualified distributors and partners in our assistance in identifying U.S.
suppliers. This match was realized
foreign markets through domestic team member
Robin Mugford out of our office in
 We provide up-to-date market research Libertyville, Illinois, and our
produced by our overseas specialists on market international team member Isolde
conditions, industry-specific information, areas Frias out of our office in Santo
Domingo. The effort resulted in a
of growth and opportunity, local competition, sale worth over $48,000.
distribution channels, and more.
 A manufacturer of windshield wiper
 We disseminate trade leads at the request of systems and fractional horsepower
foreign buyers motors, used CS support to
expand their international sales
and marketing plans. Gail Snyder,
 We are present at a most large international our domestic Automotive Team
trade shows across the globe in an effort to member out of our office in
maximize your time at these events through Portland, Oregon, counseled
matchmaking and pre-show promotional company representatives on
Commercial Services programs,
campaigns to foreign buyers provided market research, and
gave them access to educational
 We offer market and issue-specific webinars programs. Company
with industry experts that you can participate in representatives attended an Export
without leaving your desk Strategies Seminar, which covered
marketing, distribution, finance,
and documentation to expand their
 We organize trade missions to markets that knowledge base. Trade Specialist
hold great opportunities Snyder also set up consultation
appointments for the manufacturer
 We maintain and build partnerships with to meet with staff in our offices in
Guadalajara. The company is now
industry associations to jointly promote your actively exporting to Mexico, a
interests value to date of approximately
$24,000. This client has since
broadened its S. America plans by
starting additional Commercial
Service programs.

www.USAutoTeam.org


How to Use This Guide
______________________________________________________________________________________________________________

While our economy may be taking a downturn, exports are booming. Many U.S. automotive firms, both
small and large, have been able to continue their success by looking at foreign buyers and overseas
partners. Through this Resource Guide, the U.S. Commercial Service is encouraging more U.S. firms to
take advantage of a weak dollar and a global demand for American expertise in the automotive sector to
explore foreign markets.

The Resource Guide is divided into main two sections, an automotive sub-sector matrix and a market
research section for each country. In the back of this book you will find a reference section that is
designed to provide additional sources of information for exporting generally.

The matrix provides ratings for countries in each of 15 automotive sub-sectors. It is intended to provide
the reader with a quick reference in understanding which of 15 automotive sub-sectors have the most
potential for success in a given market. Each sub-sector and market has a 1-4 rating according to the
opinion of our automotive commercial specialist. The numbers refer to the following.

1 A U.S. exporter has little or no probability of success in this market
2 There are more challenges than opportunities for a U.S. exporter in this market
3 There are more opportunities than challenges for a U.S. exporter in this market
4 A U.S. exporter has a very high probability of success in this market

A short market research section follows, authored by each automotive commercial specialist that further
explains opportunities or barriers within the markets indicated in the matrix.

The ratings in the sub-sector matrix and the market research represent the opinions of the commercial
specialists responsible for the automotive sector at U.S. embassies and consulates worldwide. You will
notice that the sub-sector categories are still quite broad and may not be applicable to specific products
within those sub-sectors. We encourage you to do further research to confirm that there is a market for
your product or service. There may be additional barriers to entry once a market is further explored,
such as political turmoil or a change in import duties since the date of this publication. While we
encourage you to use our expertise and services, there are other sources of information to help decide
if you are prepared to enter a foreign market. See our reference section for more information.

The U.S. Commercial Service is present in 80 countries; however we are not in all markets. Not all
countries are represented in the matrix or the market research section. Therefore, you should not
assume that there is no market for U.S. automotive products in countries not included in this guide. If
you are interested in a market that is not represented in the Resource Guide, contact the nearest local
U.S. trade specialist in one of our 102 offices in the U.S.

Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every
effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the
accuracy or completeness of information in this or any other United States government document. Readers are advised to
independently verify any information prior to reliance thereon. The information provided in this report does not constitute
legal advice. International copyright, U.S. Department of Commerce, 2009. All rights reserved outside of the United States.


_____ ___________________________Automotive Resource Guide__________________________ 5

Australia
Capital: Canberra
Population: 22 million
GDP*: $795 billion
Currency: Australian dollar
Language: English

Summary
Growth in Australia’s aftermarket has averaged in excess of 5% over the past ten years. According to the World
Trade Atlas 2008, the United States is the leading supplier, accounting for 20% of imports ($328 million), while
Japan is the second most important supplier; 17% market share ($290 million). Excellent opportunities exist in
Australia for U.S. exporters in the Automotive Industry.

Market Entry
The U.S.-Australia Free Trade Agreement (FTA) eliminated tariffs on 99% of U.S.
exports to Australia, which have increased 10.4% since the FTA entered into effect in
2005. Providing the products can be classified as automotive items of minimum 51%
U.S. content, they will not be subject to any customs tariffs under the Australia-U.S.
Free Trade Agreement. Documentation stating the Rules of Origin, however, should
accompany the shipment of goods.

Current Market Trends
The United States is currently the leading supplier of automotive products to Australia with $1.6 billion exported
from the United States to Australia in 2008. This represents 20% of the market. Market share is decreasing for
the United States, however, while increasing significantly for China, a popular trend experienced across the
developed world.
8708 Parts & Access For Motor Vehicles (Head 8701-8705)
U.S. Millions % Share % Change
Rank Country 2006 2007 2008 2006 2007 2008 - 08/07 -
--The World-- 1435.1 1548.8 1670.7 100 100 100 n/a
1 United States 326.2 366.2 328.5 23 24 20 -10
2 Japan 311.7 305.6 290.2 22 20 17 -5
3 China 103.6 140.0 176.6 7 9 11 26
4 Germany 139.6 137.3 146.5 10 9 9 7
5 Thailand 73.2 110.7 124.1 5 7 7 12

The economic crisis positively affects the Australian Automotive Aftermarket Industry as consumers opt to service
and improve their current motor vehicles.

Main Competitors
There are three automotive vehicle manufacturers that dominate the Australian automotive industry market share;
Toyota (20.7%), GM Holden (12.5%), and Ford (10.3%). All three companies have manufacturing facilities in
Australia. The Federal Chamber of Automotive Industries (FCAI) advises that the year-to-date 2009 market of
350,376 vehicles is behind the same period in 2008 by 19.2% or 83,778 vehicle sales.

Current Demand
Traditionally, replacement parts were a prominent part of the industry, and while they still remain a necessity,
replacement parts are continuing to be less important to the industry. The best prospects are in the specialty
equipment market and the performance sector for passenger vehicles. Additionally, the motorcycle market,
trucking industry and SUV market all offer fantastic opportunities for U.S. exporters.
The performance market in Australia is a niche; however, performance, racing and tuning businesses turnover
$390 million annually. This comprises 10% of the total independent automotive aftermarket, which is in turn a part
of Australia’s $5.3 billion accessories and parts industry.


The best prospects are engine modifications, turbos, superchargers, and brake and clutch improvements. An
interesting emerging market is the ‘green’ performance area, where customers buy products that enhance fuel
economy, while also improving performance. Parts and accessories for the SUV market, the trucking industry,
and motorcycles are proving increasingly popular. Research group IBIS has predicted that the motorcycle
industry will show some of the strongest growth in the automotive industry and grow by 8.9 percent to achieve
total revenue of $3.6 billion in 2010-2011.
In general, Australians always seek quality, unique, innovative, and/or environmentally-friendly products for the
automotive Industry.

Barriers

The Department of Infrastructure, Transport, Regional Development and Local
Government (www.infrastructure.gov.au) governs the Australian Design Rules
(ADRs). The ADRs are national standards for vehicle safety, anti-theft and emissions.
The ADRs are generally performance based and cover issues such as occupant
protection, structures, lighting, noise, engine exhaust emissions, braking and a range
of miscellaneous items. The current standards, the Third Edition ADRs, are
administered by the Australian Government under the Motor Vehicle Standards Act
1989. The Act requires all road vehicles, whether they are newly manufactured in
Australia or are imported as new or second hand vehicles, to comply with the relevant ADRs at the time of
manufacture and supply to the Australian market.

A Goods and Services Tax (GST, similar to VAT) of 10% is applied to all products and services sold in Australia.
The 10% GST is applicable to the entire landed cost of the goods,
i.e.- including insurance, shipping, etc. While the responsibility to pay GST to the Australian Taxation Office lies
with the supplier, the consumer ultimately bears the GST cost. The importer will pay the GST to the Australian
Customs Service (www.customs.gov.au).
Standards Australia (www.standards.org.au) is the nation’s peak non-government standards organization. The
Commonwealth Government put this organization in place to meet Australia’s need for contemporary,
internationally-aligned standards and related services.

Trade Events
AAAE
Melbourne, May 12-14, 2011
This will be the Inaugural Year for the USA Pavilion at this newly Certified Trade Fair. Registration for the USA
Pavilion ends on February 28th, 2011. For more information: http://www.buyusa.gov/auto/aaae.html

Available Market Research
Australia: Performance and Racing Equipment (June 2009)

U.S. Commercial Service Contact Information

Name: Melanie Heskin
Position: Commercial Specialist - Automotive
Email: melanie.heskin@trade.gov
Phone: +61 39 526 5924


Austria
Capital: Vienna
Population: 8.2 million
GDP*: $373.9 billion
Currency: Euro
Language: German

Summary
Austria, with a population of 8.2 million, is one of the most densely motorized countries in the world: In the year
2009, 6.6 million motor vehicles were registered, of which over 4.4 million were passenger cars, 387.972 were
commercial vehicles and 9,599 were buses.

There are two important characteristics to note about the Austrian fleet: 1) diesel engines dominate the market,
powering around 75% of the passenger vehicles, and 2) there are very few U.S. vehicles on the road here; less
than two percent.

The average age of an Austrian car is 8.9 years, a figure that has been rising in recent years. The average
lifespan of an Austrian passenger vehicle is 12 to 15 years. The average distance driven per vehicle and year is
estimated at around 13.500 kilometers, a figure which has been falling over the past years.

Market Entry
We at CS Vienna can help you enter the Austrian market. Here are our tips:

1. Price. With the Euro still high against the Dollar; your prices might be hard for European manufacturers to
beat. Investigate current price points before moving forward.

2. Fit. Make sure that your products make sense for the cars that are on the road in Austria, and that you have
taken care of all the necessary safety and marking requirements.

3. The right partner. Find a reliable local distributor who serves your target customer base, and make sure that
communications, orders, and deliveries are trouble-free.

Current market trends in the commercial vehicle sector are centered on saving fuel and making the best possible
use of time and vehicle capacity. Some of the best prospects in this sector are plastic bumpers and cabin parts,
aluminium wheels, aerodynamic body parts and spoilers, fuel-saving tires, brake and transmission parts, and on-
board electronics.

Market trends in the passenger vehicle sector are more difficult to pinpoint, but also tend toward smaller, lighter
vehicles and increasing fuel efficiency. Best prospects include aluminium wheels, fuel-saving tires, brake and
transmission parts, and on-board electronics, including navigation, theft, and entertainment systems.

Main Competitors
Most of the vehicles on the road in Austria are European. Market leaders in the private passenger vehicle sector
are VW, Ford (Germany), and Opel. Market leaders in the heavy duty sector are MAN, Mercedes and Volvo.
European (and especially German) producers hold the lion’s share of the Austrian automotive aftermarket. Here
is a list of some of the most successful companies according to product; the production location is in parenthesis:
1. Brakes, servo breaks and parts: TRW (USA), Honeywell (Germany), Brembo (Italy)
2. Gear boxes: ZF Friedrichshafen AG (Germany)
3. Clutches: Sachs (Germany), LUK (Germany)
4. Shock absorbers: Monroe (Belgium) [part of Tenneco], Sachs (Germany), Bilstein (Germany)
5. Mufflers & Exhaust Pipes: Woka (Belgium) [part of Tenneco) Bosal (Holland)
6. Body Parts: Vanwezel (Belgium)
7. Drive axles: GKN-Spidan (U.K.)


Current Demand
Demand for new automobiles has been stagnating over the past several years, culminating in a dramatic fall in
the last quarter of 2008. The rebate for retiring older vehicles offered by the government has worked to revive
new car registration numbers. However, the global recession is taking its toll on the Austrian automotive sector.
The fact that older cars are remaining in use even longer has certain positive implications for the aftermarket,
including boosting demand for brake and steering parts, as well as transmission parts and tires.

Barriers

The two most important market access issues for U.S. products have nothing to do with customs or duties or
taxes, but with marking and safety testing requirements, and the Austrian vehicle code. The question of marking
and safety testing is a complex one. In a nutshell, there are three categories of
products: 1) those for which a European law or directive has established a
harmonized minimum standard, 2) those for which there is no European standard and
thus by default the national standards apply, and 3) those for which no European or
national minimum requirements apply at all. For the supplier, the trick is figuring out
which category his product falls into. Products that do not fall within the scope of a
European standard must meet Austrian national standards. As a general rule,
Austrian standards are higher than European standards. This category of product is
the most difficult to get certified, partly because the most difficult to standardize
products are “left over” and have not yet been harmonized, and partly because the
Austrian bureaucracy is characterized by a frustrating lack of transparency.

Trade Events
Name of event: Autozum
Location: Salzburg
English language website: http://www.autozum.at/en/index.html
Description: Autozum is Austria’s only significant automotive aftermarket trade event, taking place every second
year in Salzburg. The next show is planned for January 2011.

Commercial and Heavy Duty Vehicles (2008)


Name: Marta Haustein
Position: Commercial Specialist
Email: marta.haustein@trade.gov
Phone: +43-131-339-2205


Belgium
Capital: Brussels (Bruxelles, Brussel)
GDP per capita: $36,265
Currency: Euro since January 1999
Languages: Dutch/French/German

Summary
The Belgian car industry has always been one of the main drivers of the national economy. While more than six
million vehicles (roughly one car for every two Belgians) are registered in Belgium with more than 500,000 new
registrations every year, Belgium represents a small market relative to the US. The most important consideration
for American exporters to keep in mind in creating auto-related goods for the European market is that the design
must fit European specifications and style.
Consideration must also be given to the size and structure of vendors in the market. Sales volumes and freight
terms often required by American suppliers can be obstacles to entering the Belgian market.
Belgium is often considered the home base of assemblers, manufacturers and importers of vehicles. Thanks to its
“open economy,” almost all foreign car makers are represented in Belgium. On an annual basis, about one million
cars and 90,000 commercial vehicles, buses and coaches are assembled in Belgium. The country’s assembly
industry includes Ford, Opel, Volvo and Audi and employs 60,000 direct employees. This production is valued at
$14.1 billion. In addition, more than 260 automotive suppliers employ 25,000 people. These companies are
active in industrial production, logistics, engineering, R&D, ICT, services, etc.

The Belgian car market has grown at a steady rate in the past 10 years. According to the Belgian Federal
Government there were 5.16 million cars in 2009, compared to 5.06 million the year before. This is an increase of
1.8%; 2006 saw an increase of 1.44 percent. Households average two-three cars each and family members are
spending more time in their cars, between commuting and vacationing, amounting to about one hour per day.
Overwhelmingly, Belgians prefer manual transmissions, which account for more than 90% of cars sold. Belgians
also prefer engines that have a lower consumption rate. Higher fuel efficiency of diesel engines and the lower
cost of diesel fuel drive demand for diesel engines. Diesels now represent more than 60% of all vehicles in
Belgium.
The size of cars being purchased is diversifying. Small family cars remain the most popular type of car in Belgium
(24%), followed by station wagons (14.3%), and small urban cars (10.4%).
There are only a few late model U.S. vehicles on the roads in Belgium. This is due mainly to the high fuel
consumption of most American models and the lack of diesel versions. In some cases, professional car dealers,
as well as individuals, travel to the U.S. to buy sport utility vehicles (SUV’s) or pick-up trucks because of their
typical American look. However, those numbers are still marginal.

Main Competitors
Auto-related imports to Belgium come from Germany (42%), France (30%), and the United Kingdom (1%).
Because of import duties ranging between 5-10%, European manufacturers have a price advantage over U.S.-
based manufacturers.
There are few large Belgian brand names in the auto accessory market, but there are strong European players.
Belgians are more familiar with European brands, due to their historical presence. However, American brands
have a positive image in Belgium and representatives in the industry believe that American products can sell well,
and should be better represented.

Current Demand
Despite the economic crisis, the interest or willingness to buy new and innovative products is still present
although less important. The key to successful accessory sales is an understanding of the style and needs of the
European driver. The young drivers’ market, as well as the two-wheeled motor vehicle market, appears to have
the greatest potential for growth in accessories. In addition, demand for security systems is also high and
evolving.


Barriers
In order to sell products in the Belgian market, U.S. exporters must meet the CE mark requirements applicable to
their goods. The CE mark certifies that the products have met the EU health, safety, and environmental
requirements. Once a manufacturer has earned a CE mark (some can self-certify, others require certifying
agents), it may affix the CE mark to its product. The product may then be marketed throughout the EU. See
http://www.export.gov/cemark/doc_ce_mark_main.asp for more information.
Packaging must be translated into French, Dutch and German. Non-metric measuring units, poor translations
and/or graphics often insufficiently address European cultural differences. Typically, U.S. exporters can entirely
miss the point by using Canadian French translations for material used in France and Belgium. Therefore, both
the advertising material and the retail packaging should always be the responsibility of the local importer.

Trade Events

AUTOTECHNICA SHOW
Next event: May 2012
Blvd. de la Woluwe 46, Box 9
B-1200 Brussels, Belgium
Contact: Mr. Klaus Van Cauwenberghe
Tel. 32/2/778-6200
Fax. 32/2/778-6222
http://www.autotechnica.be

Tools Equipment Show
January 30-31, 2011
Contact: Mr. Klaus Van Cauwenberghe
Tel. 32/2/778-6200
Fax. 32/2/778-6222
http://www.tools-tools.be
This is the only show in Belgium for automotive parts, accessories and repair equipment.

None currently available.


Name: Mr. Stephane P. Croigny
Email: stephane.croigny@trade.gov
Phone: +32 2 811 5086


Brazil
Capital: Brasília
GDP: 4.8%
Currency: Real
Language: Portuguese

Summary
For the Brazilian automotive industry, 2007 was a record-breaking year. The industry set an all-time high of 2.97
million cars, vans, buses, and trucks manufactured. Comprising 18 percent of the country's industrial production
and five percent of GDP, the growth in the auto industry contributed to Brazil's higher than expected GDP growth
of 5.4 percent last year. Local automakers predict production in 2008 will top 3.25 million vehicles and are
ramping up investments and hiring more workers to increase capacity.
Flex-fuel vehicles, which run on any combination of gasoline and ethanol, also broke records. Today, almost nine
out of ten new cars sold in the Brazilian market have flex-fuel engines. Brazil's stable macroeconomic picture,
higher household incomes, and readily available credit have stimulated domestic sales. However, Brazil's high
tax rate and rising wages for workers, as well as an appreciating currency, are areas of potential concern for the
industry.

Market Entry
The Brazilian government's five-year plan in 1956 to promote the country's industrialization led to the creation of
Brazil's modern auto industry. Fifty years later, Brazil is the world's seventh largest automobile manufacturer and
eighth largest consumer base for automobiles. The auto industry comprises approximately 18 percent of Brazil's
industrial output and accounts for five percent of GDP. Industry analysts expect Brazil this year to surpass
French production and the consumption levels of Great Britain and France.
Today, the Brazilian auto industry is a major driver of economic growth. Brazil is becoming an emerging market
leader for technology development because of its highly skilled and qualified engineers and relatively low labor
costs compared to developed countries. Brazil has the largest number of car assembly plants in the world,
manufacturing more than 30 brands. The auto sector has invested approximately $27.5 billion since 1994 to
expand plant and component manufacturing capacity and in new technology for developing new models.
Brazilian exports rose in value from $4 billion in 2002 to $13.2 billion in 2007. Globalization also has pushed the
industry to restructure its supply chain and product design processes. Innovative organizational designs, novel
production facility layouts, and efficient supply chain management make Brazil one of the most dynamic
automotive industries. General Motors (GM), Ford, Volkswagen, and Fiat all have flex-fuel development and
engineering facilities in Brazil. The Ford plant in Bahia and the GM plant in Rio Grande do Sul are considered the
most modern assembly plants in the world.

Sales of flex-fuel vehicles, which run on any combination of gasoline and ethanol, accounted for 85.6 percent of
new cars, or two million cars. In addition to flex-fuel vehicles, the GOB's policy of mandatory blending of gasoline
with 20 to 25 percent ethanol is also driving the success of Brazil's ethanol program. GM's Government Relations
Manager Pedro Bentancourt told Economic Officer that, as of March, 26 percent of the country's light vehicle fleet
is flex-fuel. This figure is expected to reach 50 percent by 2015 as heavy investments from the auto industry
have driven down the price of flex-fuel technology enabling manufacturers to offer these models at the same price
as gasoline-powered vehicles. Similarly, by mid-2008, the state of Sao Paulo expects to launch approximately 20
flex-fuel buses as an environmentally friendly pilot project.

Main Competitors
An increase in available credit, lower interest rates, and extended car loan maturities up to six years all
contributed to the boom in auto sales. Pablo Teruel from the Department of Statistics of the Brazilian Motor
Vehicle Manufacturers Association (ANFAVEA) told Economic officer that Brazil's rising employment and income
were partly responsible for sales expansion. Teruel also told Economic officer that he did not foresee any
changes for the sector from the Central Bank's capital requirements on leasing put in place in January because
auto companies finance their own leasing operations and therefore are not subject to the new reserve rules.
ANFAVEA is confident that auto sales will continue to grow. A major part of the nearly 86 percent growth in


leasing in 2007 went to the auto sector, and traditional financing for vehicles was also up 29 percent.ANFAVEA
reported that motor vehicle production (autos, trucks, and buses) and domestic and international sales all hit
record highs in 2007. Last year, the industry assembled 2.97 million cars, up 13.9 percent over 2006. Domestic
sales including imported vehicles climbed 27.8 percent, totaling 2.46 million. Imported vehicles accounted for
10.9 percent of total domestic sales. Fiat led Brazilian domestic market sales in 2007 with 523,180 cars, followed
by Volkswagen with 491,790, and GM with 444,904. At the end of 2007, the Brazilian automotive industry
employed 120,245 people, up 13.1 percent from 2006.
These upward trends have continued in early 2008. According to ANFAVEA's data for the first quarter of 2008,
total vehicle production was 783,000 cars, up 19.3 percent from the same period a year ago. Vehicle sales
reached 648,000, up 31.4 percent. At the end of March, the industry employed 124,200 people. According to a
recent local TV newscast, ANFAVEA President Jackson Schneider said that Brazil's auto industry is estimating
an output of approximately 3.2 million cars in 2008, up 8.9 percent from 2007.

Current Demand
Skyrocketing auto sales have left automakers unable to meet demand. Between February 2007 and March 2008,
auto companies were only able to meet 91.5 percent of demand. Schneider said at a press conference that the
wait for a new car is at least three months for some models, and as long as nine months for trucks. As a result,
automakers in Brazil have announced plans to invest USD 4.9 billion in 2008, more than double what they
invested in 2007 and also the largest amount they have ever allocated in one year. Brazilian subsidiaries of Fiat
and Ford have announced investments of USD 2.9 billion and USD 1.5 billion, respectively, through 2011.
Volkswagen's truck manufacturing division also confirmed USD 600 million in investments to expand production.
Most investments will be channeled to increase production capacity from 3.5 to 3.85 million cars this year and to
four million cars in 2009. Including Brazil's auto parts industry, total investments are expected to reach USD 20
billion by 2010.
The four largest auto manufacturers in Brazil, Fiat, Volkswagen, GM, and Ford, are hiring more workers to try to
meet the growing demand for new cars. GM has 22 percent of the Brazilian market and plans to hire 1,500
workers for its biggest plant in Sao Paulo, Brazil. GM Vice President in Brazil Jose Carlos Pinheiro Neto told the
press that first quarter sales exceeded expectations, climbing 30 percent to 117,687 cars. He said that the GM
plant in the Sao Paulo industrial region now has a total of 11,000 workers, which should help increase production
to 250,000 cars. GM also may invest USD one billion in Brazil and Argentina to introduce a new compact car.
Currently, Ford enjoys a stable market share of 12.5 percent and is ranked fourth in Brazilian auto sales. In the
first quarter of this year, Ford manufactured 37,854 cars, down 8.5 percent from the same period in 2007. Unlike
Ford Motor Company's global operations, Ford's Brazilian operations had registered profits until this year.

Barriers
Despite the booming domestic market, the appreciation of the Brazilian currency has reduced the auto industry's
global competitiveness. While the Brazilian auto industry broke records in 2007, total cars exported were down
6.6 percent from 2006. Pablo Teruel said that ANFAVEA does not anticipate export revenues this year to
surpass 2007. Nonetheless, export earnings in the first quarter of this year totaled USD 3.24 billion, up 13.1
percent compared to the same period a year ago. Although the Brazilian auto market is expected to set new
production and sales records this year, industry analysts point to Brazil's high tax burden, inadequate
infrastructure, and cumbersome bureaucracy, combined with the appreciation of the Brazilian currency, as
making Brazilian vehicles less competitive internationally. Several auto industry interlocutors told Economic
Officer that production costs in Argentina are lower and that Argentina is becoming an attractive alternative for
auto makers, especially given the duty-free access to the Brazilian market afforded to Mercosul countries.
Despite Argentina's current energy crisis, several automakers have announced investments in Argentina. For
example, Honda plans to invest USD 100 million to construct its first assembly plant in Argentina, both for the
Argentine market and as a platform to Brazil and Mexico. Fiat also announced plans to reactivate a plant in
Argentina that it had shut down in 2002. Renault also is examining the possibility of transferring production of its
low-end models to Argentina.


Trade Events
2010
RECAUFAIR TIRE SHOW - TIRE AND EQUIPMENT INTERNATIONAL FAIR AND CONVENTION
Expo Center Norte – Sao Paulo
http://www.recaufairpneushow.com.br

South America Trade Show (2009)


Name: Teresa Wagner – Commercial Specialist in Sao Paulo
Position: U.S. Commercial Service Sao Paulo, Brazil
Email: teresa.wagner@trade.gov
Phone: 55/11/5186-7177
Name: Genard Burity – Commercial Specialist in Rio de Janeiro
Position: U.S. Commercial Service in Rio de Janeiro
Email: genard.burity@trade.gov
Phone: 55/21/3823-2401
Name: Mauricio Vasconcelos, Commercial Specialist in Belo Horizonte
Position: U.S. Commercial Service in Belo Horizonte
Email: mauricio.vasconcelos@trade.gov
Phone: 55/31/3213-1573


Bulgaria
Capital: Sofia
GDP*: 49.8 billion
Currency: Euro
Language: Bulgarian

Summary

In 2007, Bulgaria entered into the European Union and into the U.S. - EU trading relationship. The signing of the
U.S. - Bulgarian Defense Cooperation Agreement provided further evidence of the deepening of the strategic
political and military partnership between Bulgaria and the United States. Ratification of the Double Taxation
Treaty and introduction of flat 10% tax in 2008 contributed to further optimism in the future bilateral business
relations between both countries.


The new cars market in Bulgaria until 2009 demonstrated stable upward trend as of 1996.
In 2009 as in many other countries, the financial crisis hit badly this market. The number of new cars sold in 2009
declined to 26 813 which is almost 53.7% compared to the new cars sold in 2008 amounting to 57 927.
The market leader in 2009 was Toyota with 2820 cars sold which is 44.5% decline compared to 2008, followed by
Peugeot with 2263 new cars sold, 8.80% market share and decline of 45.4%. Third in ranking was VW with 2251
new cars sold, 8.76% market share and 52.5% decline. Fourth was Opel with 2191 new cars sold, 8.52% market
share and 59.9% decline. The only car brand with positive upward trend in sales was
Land Rover ,which sold 231 cars which was a 29.8% increase compared to the sales
in 2008.
Most seriously affected was the market for heavy duty and professional vehicles,
busses and vans. In 2009 this market declined by 73% compared to 2008. The
leader in this market segment for 2008 and 2009 remained Mercedes with total
number of sales 479 and the decline was 66.8%. The least shrinking market segment
in Bulgaria in 2009 was the motorcycles and ATV market, which declined only by 25.9% and amounts to 488 pcs.
For the first half of 2010 Toyota remained the top selling brand with 893 vehicles sold, which comprised 10.38%
of the total vehicles market share in Bulgaria. Next in the ranking list are Ford with 857 cars sold with 9.96%
market share, Peugeot with 788 cars sold with 9,16% market share and VW with 736 cars sold with 8.55%
market share. The last on the 10-companies’ list of best-selling car brands in 2010 is Opel with 476 cars sold and
5.53% market share. The market for heavy duty and professional vehicles in 2010 declined by another 29%
compared to 2009 amounting to 351 vs. 498 for the same period in 2009. The motorcycles market declined by
27.6% compared to 2009.
Almost 18% of the cars registered in Bulgaria are older than 10 years. Since 2000 Bulgarian families prefer to buy
cars not older than 10 years. Now almost 70% of Bulgarian families own a car and almost 80% of the firms with
business activities have motor pools, which depending on their activities, consists of cars, vans, minibuses, jeeps
and light trucks.
The automotive aftermarket and collision repair car business is one of the fastest growing in Bulgaria. The growth
in numbers of European cars will lead to a need for more sophisticated service and car body repair equipment,
both mechanical and electronic, paint products and application methods at an affordable price. The official
distributors of all new car models maintain warranty service and repair stations within their company structures.
The new, sophisticated electronic car equipment requires special analyzers, testers and experts to deal with it.
Best sales prospects include consumables, including oil and air filters, wiper blades, rubber blades, hoses,
gaskets and rings, engine parts, brake parts, exhaust system parts, car body parts, accessories such as wheel
covers, car/truck bed covers, car batteries, exterior accessory lights, auto security products such as alarms,
steering wheel locks, service equipment for electronic diagnosis, monitoring, testing and analyzing, wheel
balancing, tire changing, oil changing, battery chargers, quick repair kits, tools, paints and auto cosmetics.



None currently available.

Name: Uliana Kanelli,
Phone: 359-2-939-5706
Email: uliana.kanelli@trade.gov


Canada
Capital: Ottawa
Population: 33.5 million (2009 estimate)
GDP*: $1.279 trillion (2009 estimate)
Currency: Canadian
Languages: English, French

Summary
Canada Motor Vehicle Sales 2008/2009 (Units)

2008 2009
Passenger vehicles* 894,506 747,671
Trucks* 779,639 737,185
Motorcycles** 89,390 64,087
Total Canadian Sales 1,763,535 1,548,943
* Source: Statistics Canada
** Source: Motorcycle and Moped Industry Council

Market Entry
Source: U.S. Census Bureau – U.S. International Trade Statistics
Exports to Canada Canada’s % of January 2008/2009 Change
for January 2009 World Totals (US (%)
($1,000) Exports)
Automobiles and Light Duty
Motor Vehicles, including
Chassis 287,035 21% -72%

Heavy Duty Trucks and Chassis 301,145 57% -40%

Motor Vehicle Parts 426,561 42% -46%

Motor Vehicle Gasoline Engines
and Engine Parts 158,940 61% -55%

Motor Vehicle Electric and
Electronic Equipment 73,706 33% -42%

Motor Vehicle Steering and
Suspension Components 26,950 55% -50%

Motor Vehicle Brake Systems 50,632 50% -38%
Motor Vehicle Transmissions
and Power Train Parts 124,580 57% -60%

Motorcycles, Bicycles, and Parts 32,471 22% -6%

After the United States, Canada represents the second largest automotive market in North America with more
than 1.64 million units sold in 2008. The inextricable relationship Canadian and U.S. production facilities have
forged over the years also makes Canada the largest industry trading partner for the United States. Despite the
North American automotive industry’s sharp decline in recent months, sales of new motor vehicles in Canada
rose 6.3 percent in March 2009 to 122,194 units: the largest monthly growth since January 2008. Further, the
number of new motor vehicles sold in March 2009 rose in all provinces with the most growth in Quebec, whose
sales rose 10.4 percent. For the month of March 2009, the U.S. Census Bureau calculated that roughly $660


million in automobile and light duty motor vehicles were exported to the Canadian market, representing 30
percent of total U.S. exports.

Main Competitors
While American automotive imports retain a majority in Canada, market trends indicate significant inroads for
Asian manufacturers – including aftermarket and component parts, in addition to passenger vehicles and trucks.

Current Demand
For the first quarter of 2009, monthly sales of new passenger vehicles in Canada indicate that the United States
lost approximately four percent of its market share to foreign competitors. Despite increased competition in the
passenger vehicle sector, the United States continued to maintain its dominance within the light and heavy-duty
truck market, retaining 85 percent of the Canadian market share.
Given the 50 million cars on Canada’s road and the maintenance they require, the best prospects in the
automotive sector for U.S. companies are in the aftermarket. In other words, while the auto sales market has
declined rapidly, the demand for maintenance continues to expand. Thus, the current slowdown in the auto sector
will not likely catch up to the aftermarket for a few years. Until then there will still be a strong demand for
aftermarket products and services.
On average, each car 12 years or older requires a minimum of $1000 in maintenance per year. This figure is
important because 43 percent of cars on Canadian roads are on average 15
years old. Much of the market is still in mechanically installed (MI) parts, but also
we are seeing a large increase in the Do-It-Yourself (DIY) purchases and
repairs.
The automotive aftermarket sector is the largest retail sector in Canada ahead of
clothing, food, furniture and pharmaceuticals. The sector encompasses
production, re-manufacturing, distribution and retailing of replacement parts,
tools, equipment, accessories, chemicals and production for fixing used cars.
The sector is estimated at over $19.35 billion.
The sector has been growing at a steady rate of 2-3 percent over the past four
years. This growth is expected to continue for a few more years despite the slowdown in the automotive market.
The Canadian market offers U.S. suppliers the best opportunities in this sector because of a strong trade
relationship and the largest market other than its own.

Trade Events
AutoMechanika Canada
Toronto
http://www.automechanikacanada.com
Automechanika is the only Canadian trade show showcasing North American aftermarket suppliers and retailers
(Automechanika replaced the Automotive Industries Association of Canada trade show).
Truck World: Canada’s National Truck Show
International Center, Toronto
www.truckworld.ca
Truck World is the annual meeting place for Canada’s truck industry. The show attracts new products, new ideas,
and new solutions within its 300,000 square feet of trucks, equipment and technology.
Ontario Transport Expo
Toronto
www.ote.ca
The Ontario Transport Expo is a trade show and conference that brings together buyers and sellers from the bus
transportation industry to facilitate the exploration of more efficient ways in which they can service their
transportation customers in the future.

Automotive Aftermarket Parts and Accessories/Service Equipment (2008)



Name: Madellon Lopes
Position: Senior Commercial Specialist
Email : madellon.lopes@trade.gov
Phone: + 1-416-595-5412 x227


China
Capital: Beijing
Population: 1.336.580.459 (by Sep. 2 ,2010 )
GDP*: $5,263 billion (2010 estimate)
Currency: Yuan
Language: Mandarin

Summary
China is now the second largest automotive market in the world, trailing only the United States and Europe.
China has about 6000 automotive enterprises, which are scattered in five sectors: motor vehicle manufacturing,
vehicle refitting, motorcycle production, auto engine production, and auto parts manufacturing. This includes
approximately 100 OEMs, with 40 producing passenger vehicles, and over 4000 registered auto
parts/accessories companies. All tiers of the industry are being driven by the booming sales of the OEM sector.
Nearly 80% of the revenue for the auto parts and accessories market is through new vehicle sales. However,
revenue from after market is increasing rapidly.

Statistics shows that China manufactures 13.791 million vehicles in 2010, 48.30% increased from last year
and became the number one in the world regarding the volume in number. It is forecasted that this number
will reach 16.00 million in 2010.

Importation for parts and components recovered quickly from 2008 when this industry was really down. The
importation volume for the first half year of 2010 is USD 12.72 billion, 90.65% increase compared with same
period of last year. Among this, imported engine was 487,400 valued 1.3 billion, with 88.24% increase in
dollar; parts, components and frame was USD10.4 billion with 90.32% increase; tiers for car and motorcycle
is 0.185 billion with 62.79% increase; all the rest was 0.813 billion with 110% increase.

Market Entry
China’s fulfillment of WTO requirements has helped drive new vehicle sales. As of July 1, 2006, China fulfilled its
WTO requirements by lowering import tariffs for auto parts and accessories to 10% and import tariffs for new
automobiles to 25%. The reduction of tariffs on automotive parts and China’s agreement to eliminate local
content requirements after WTO entry has placed domestic automotive parts manufacturers in direct competition
with their international counterparts.

Shanghai and its surrounding provinces (Zhejiang, Jiangsu, and Anhui) are the centers for component
manufacturing, representing around 44% of national production. Shanghai is home to Shanghai General Motors,
Delphi, Visteon, and other notable American automotive companies and, as such, provides a good starting point
for U.S. automotive component exporters to begin to explore the Chinese market. Other major automotive
centers in China include Guangzhou (South China), Chongqing (West China), and Changchun (North China).

Current Demand
The main goals for automotive components, parts, and accessories manufacturers are to improve technology and
quality and to develop design capability. Most of the domestic automotive parts manufacturers’ R&D capabilities
are limited due to the small scale of
their operations and a shortage of capital as compared to international companies. In the next five years, the
Chinese Government will continue to encourage foreign investment in automotive component development and
manufacturing. In the meantime, there is a growing market for imports and American products are generally
highly regarded by Chinese customers.


Best prospects:
• Engines for motor vehicles and motorcycles;
• Auto and motorcycle casting blanks;
• Key automotive parts and components including disc-type breaking
assembly, drive axle assembly, automatic transmission box,, engine
admission supercharger, engine displacement control device, electric
servo steering system, viscous continuous shaft device (for four-
wheel drive), air shock absorber, air suspension frame, hydraulic
tappet, and compound meter;
• Auto electronic devices and instruments (including control systems
for engine, chassis and vehicle body);
• Fuel cell technology;
• Automotive accessories;
• After market products
The reductions in automobile tariffs will make it much more cost effective for U.S. firms to export finished vehicles
to China and reduced tariffs on parts will allow companies to import essential components that cannot currently
be found domestically. Additionally, as China’s restrictions on trading and distribution are reduced, American
companies are gaining the right to distribute most products, including automobiles and related parts, in any part of
China. Previously, foreign companies could only distribute parts to one interior destination in China and could not
ship or distribute products between cities without employing a Chinese freight company.
The Chinese government has launched the “National Projects of Electric Vehicles,” that encourages the
development of environmentally friendly automobiles. So a U.S. company possessing clean energy parts and
technologies will have more opportunities in the Chinese market.

China: Auto Aftermarket (2009)

Name: Qiurong Zhang
Position: Commercial Assistant
Email: Qiurong.Zhang@trade.gov
Phone: +86-10+8529-6655


Colombia
Capital: Bogotá., D.C.
Population: 48.7 Million (e)
GDP*: $241,300 million
Currency: Peso, Colombiano
Language: Spanish

Summary
The automotive sector is the fourth most important industry in Colombia. The United States has traditionally been
Colombia’s major supplier of vehicles, automotive parts and accessories. This sector represented 8% of all
Colombian imports for the first semester of 2009. Colombia imported from the United States $11.3 billion
products in 2008.

After a sustained growth of 20% per year since 2001, the Colombian automotive sector has experienced a
significant setback in 2008. According to the Colombian Ministry of Commerce, Industry and Tourism, total sales
of this sector (local market and exports) dropped by 41% with a 40% drop for utility vehicles and trucks.
Domestic demand reduction and restrictions on Colombian exports to Venezuela and Equator were the major
factors.

In 2008, the Colombian local market experienced a 15% overall reduction. The Colombian ministry of
transportation imposed a reduction on truck licensing and a program to discard trucks over 20 years old until
2010. The output of this sector in the national industry lost 5%, from 41.5% in 2007 to 40% in 2008. A significant
factor was Venezuelan restrictions on imports from Colombia, reducing national exports to Venezuela by 64%,
which greatly affected the Colombian automotive industrial production and national employment rate.

In 2009, it was projected that sales of imported of vehicles would drop by 18% from 2008, from 139,554 units sold
in 2008 to 114,480 units in 2009. During the first quarter of 2009, the market remained stagnant, only tackling
large dealer inventories. The automotive sector is gaining pace and reacting more dynamically in the second
quarter of 2009, boosted by new production and assembly lines and a stronger demand for auto parts.

Market Entry
The following guidelines are recommended for Market Entry:

• Secure an agent, representative, or distributor in Colombia, which requires a contract that meets the
provisions of the Colombian Commercial Code.
• Focus on formality, personal relationships and trust when negotiating agreements and contracts.
• Perform direct marketing and personal visits to potential buyers supported by Internet communications,
printing and distribution of materials to prospective customers, which are essential.
• Keep good after-sales service arrangements, which are important in Colombia, not only in the original
buying decision, but also in maintaining the sales relationship.
• Consider the product’s quality, financing, and price, supported by extensive advertising campaigns, which
play an important role in a Colombians’ buying decision.

According to a 2009 market forecast by Econometria S.A., the Colombian market will sell 180,000 units in 2009,
or 18% below 2008 sales. On top of export restrictions to Venezuela, exports to Ecuador will basically be banned
as a result of Ecuadorian policies over politics with the Colombian Government. Venezuela and Ecuador are the
main destinations for Colombian automotive industry exports. This loss should affect the Colombian
unemployment rate as the sector generated 2.5% employment in 2008 and 2.6% of the industrial output.
Econometria S.A. concluded that production in 2009 would experience a 38% reduction from 2008. By May
2009, 14,146 new vehicles were sold against 14,500 units sold on average during the past six months, confirming
a downward trend in the market. The first quarter of 2009 showed a significant change in trends among imported
vehicles, local production (47%), and cars and utility vehicles (68%) breakdown compared to the respective
breakdown (46% and 69%) in 2008. Taxis, vans, and commercial vehicle sales were stable. In contrast,
merchandise vehicles sales dropped significantly during this time frame. During the first semester of 2009, 1,200


pick-ups and 600 freight vehicles were sold from 1,600 pick-ups and 1,000 freight vehicles sold during the second
quarter of 2008.

Main Competitors
Approximately 49 brands and some 249 models are found in the market. In 2008, the following motor vehicle
brands competed very actively in the Colombian import market: Chevrolet, Hyundai, Ford, Nissan, Skoda,
Mitsubishi, Volkswagen, Kia, Toyota, Peugeot, Renault, Daihatsu, Honda, Citroen, Dacia, International,BMW,
Mercedes-Benz, Dina, Renault, Kenworth, Mack, Dodge, Freightliner, Petteril, Audi, Agrale, Daihatsu, Samsung,
Subaru, Nissan, Isuzu, Hino and Volvo.

Current Demand
In general, the Colombian automotive parts and accessories sector reflects the economic state of the nation as
well as the motor vehicles manufacturing/assembly sector. About 38% of all Colombia’s exports feed the U.S.
market. Because of the 2008 global economic crisis and lower import demand from the United States,
Colombia’s economy has stalled in 2008 and during the first quarter of 2009. However, analysts expect an
improvement due to President Uribe’s economic policy, a stronger demand in China and Brazil for Colombian
products and services, higher raw materials value, and a favorable U.S. Colombian pesos exchange rate.

Barriers
Since 1990, Colombia has lowered and simplified its import tariffs. Import duties are quoted ad-valorem on the
Cost Insurance Freight value of shipments. All duties (with few exceptions) have been consolidated into four tariff
levels: a) 5 percent for raw materials, intermediate and capital goods not produced in Colombia, b) 10 percent
and 15 percent for goods in the above categories but produced and registered in Colombia, c) 20 percent for
finished consumer goods, and d) the exceptions, such as import duties for motor vehicles which remain at 35
percent, and some agricultural products which fall under a variable import duty system (price band).
These tariff levels are in line with Decision 370 of the Andean Community (formerly “Andean Pact”) Agreement,
which the governments of Bolivia, Colombia, Ecuador, Peru, and Venezuela approved in 1994. This Decision,
known as the Common External Tariff (CET), was adopted by Colombia in 1995 through Decree 205. Under
Decision 370, Andean Community countries assign a CET for imports coming from third countries, and while
gradually eliminating duties on products manufactured and imported from within the region. Venezuela left the
Andean Community in 2006, but indicated in 2007 that it may rejoin the Andean Community in the near future.

Trade Events
Name of event: Expopartes Trade Show
Location: Bogota, Colombia
English language website: N/A – Spanish Site http://www.asopartes.com/web/directorio/expopartes/
Description: This is an event that takes place every two years in Bogota, Colombia. This year it took place in June
2009; this is retail aftermarket source for parts, accessories and service equipment. Special show sections
include Machine Shop; Paint, Body & Equipment; Tool & Equipment; Medium & Heavy Duty Truck; SUV and
Vehicle Technology.


Colombia Automotive Sector Overview (2009)


Name: Ricardo Roldan
Email: Ricardo.Roldan@trade.gov
Phone: 571-383-2731


Costa Rica
Capital: San José
Population: 4,509,290 (2009, CR Census Bureau)
GDP (PPP): $48 billion (2009 estimate)
Currency: Costa Rican colón (Exch. Rate 500-600 per 1 USD)
Language: Spanish

Summary
Total Market Size Total Local Productions Total Exports Total Imports Imports from the U.S.
(2009) (2009) (2009) (2009) (2009)

144.5 40 35.7 140.2 37.4
Data provided in US$ millions. The above statistics are based upon industry sources and are unofficial estimates.
https://www.hacienda.go.cr/msib21.

Local production is limited to small electrical and metal parts, batteries, electrical copper cable, hydraulic seals,
filters (air/gasoline), steel leaf springs, aluminium and steel wheels, windshields, carpets, hoses, mufflers, bus
bodies, and tires.
Total imports in this sector are expected to increase in 2010 by 2 percent over the previous year to about US$143
million.

The consensus within the local automotive parts industry is that despite the economic crisis that affected Costa Rica
during 2009, the sector is expected to grow at an annual rate of 2-4 percent from 2010-2012. The surge in imports of
used, low-cost vehicles from Asian countries during the last four years led to an increase in auto parts imports from
China and Korea, which reduced U.S. market share. As a result, industry sources indicate that the U.S. share of the
import market is expected to improve only slightly from 2010-2012. The U.S. market share for automotive parts for
2009 was estimated at 26.7 percent.

Main Competitors
Major U.S. competitors in this sector are Japan, South Korea, Brazil, Taiwan, and France.

Current Demand
Many of the cars in Costa Rican roads are imported as “used” from the United States, due to high taxes on new
cars. For that reason, Costa Rican importers of automotive parts and accessories purchase their products in the
U.S., although a significant portion of these items is not of U.S. origin.
According to several Costa Rican importers of automotive parts, good sales opportunities continue for virtually all
categories of products in this sector. High quality, durability, availability and an assortment of vehicle parts, fast
delivery, and favorable prices are the main factors for increasing U.S. sales of these products.
Under DR-CAFTA, U.S. suppliers should be well positioned to expand their market share for automotive parts.
CAFTA-DR better positions U.S. exporters to take advantage of this expanding market. Current import taxes for
automotive parts vary from 0 to 14 percent, depending on the product. Most of these import taxes will disappear
immediately with the approval of the CAFTA-DR approval.*

Resources
Costa Rican Association of Importers of Automotive Parts (AIPA): aipacr@racsa.co.cr
Costa Rican Importers of Used Vehicles –CCA: carballomotor@gmail.com
Costa Rican Association of Importers of Vehicles –AIVEMA: aivema@racsa.co.cr
Costa Rican Customs Directorate, Ministry of Finance: https://www.hacienda.go.cr/msib21
*U.S. Commercial Service, Senior Commercial Specialist – Victor.Cambronero@trade.gov

Automotive: Parts/Accessories/Service, CAFTA-DR (Jul 2007)


Name: Roy Fernandez
Email: Roy,Fernandez@trade.gov
Phone: + 506 2519-2000


Croatia
Capital: Zagreb
GDP (2008): $69.34 billion
Currency: Croatian kuna
Language: Croatian

Summary
During the first 7 months of 2009, automobile sales in Croatia dropped by more than 48 percent. There were
29,999 newly registered personal vehicles, compared to 58,268 that were registered in the same period last year.
The total number of registered vehicles in Croatia is approximately 2 million, of which 1.5 million are personal
vehicles.

Opel is still the most popular car brand in Croatia, with 3,360 vehicles (an 11.2 percent market share) sold during
the first 7 months of 2009. It is followed by Volkswagen and Renault with 2.879 and 2.649 vehicles sold,
th
respectively. Ford is the highest-ranked U.S. car brand (1,326 vehicles sold; the 5 most popular car brand in
Croatia, primarily thanks to the Ford Focus).

The recession has hit the car imports pretty hard, affecting the used cars market as well. The only brands/models
that registered sales growth compared to last year were Lancia, Dacia and Mercedes Smart.

Almost 50 percent of the passenger vehicles registered in Croatia are older than 10 years. There is no data on
the spare parts market in Croatia, but an average private vehicle owner spends approximately $5,500 per year on
car-related expenses, which includes gas for 13,000 kilometers, highway tolls, registration, technical inspection,
maintenance and spares parts.

Trade Events
Zagreb Auto Show
March 18-28, 2010
Venue: Zagreb Fairgrounds
URL: http://www.zv.hr/sajmovi/163/index_en.html
In 2008, the Auto Show hosted 51 automobile brands (348 models) and 35 motorcycle brands
(180 models), with numerous premieres and concepts. It is probably the most popular show in Zagreb.


2008-2009 Automotive Resource Guide


Name: Miroslav Nikolac
Position: Trade Specialist
Email: miroslav.nikolac@trade.gov
Phone: +385 1 661 2026


Czech Republic
Capital: Prague
GDP 2009: $180 billion
Currency: Czech Crown (CZK)
Language: Czech

Summary
Due to massive foreign direct investments in the last two decades, the Czech Republic has become the major car
manufacturer in the Central/Eastern European region (CEE). Leading Czech automotive companies are SKODA
AUTO/Volkswagen, Toyota-Peugeot-Citroen (TPCA), Hyundai, Tatra and Avia (trucks), Iveco and SOR (buses),
and Zetor (tractors). While in its entirety CEE’s automotive production has represented roughly 10% of global
personal car production and 5% of utility vehicle production, the Czech vehicle production is as follows below:

Production of Vehicles
2008 2009 1Q 2010
Skoda Auto / Volkswagen 603,981 627,722 165,612
Toyota-Peugeot-Citroen (TPCA) 324,289 331,631 88,963
Hyundai *) 12,050 114,664 41,233
Others 10,232 8,000 1,500
Total 948,128 1,074,017 295,808

Although the financial crisis hit the Czech automotive industry hard at the end of 2008, production of new
passenger cars rose to all-time-record high of 979,085 units in 2009. This is a 4.12 percent increase from 2008.
The Czech automotive industry capitalized on higher demand for cheaper and smaller cars in the European
Union, which car manufacturers in the Czech Republic specialize in. In addition to new car manufacturing,
production of automotive parts and components plays significant role and represents almost 50% of the sector.
This area was hit by the crisis the most and the market has faced severe reductions.

Market Entry
Excellent opportunities exist for U.S. automotive suppliers interested in selling parts to local auto plants or to the
aftermarket. However, tapping into local supply chains can be both a costly and time consuming process.

Finding a good local partner is the key to successful entry into the Czech market. The quickest way into the
market is to find a distributor with an existing distribution network which may welcome a new U.S. product that
supplements an existing line. The best distributors work closely with their foreign suppliers to develop strategies
tailored to the nuances of the local market, drawing on the distributor’s knowledge of local pricing strategies,
promotion techniques, and competition. In most cases, one distributor can provide coverage throughout the
entire country for a related line of products.

Larger U.S. firms might want to consider establishing joint manufacturing facilities in the Czech Republic to
provide Just-In-Time (JIT) inventory to large clients in the Czech Republic, or neighboring Germany, Poland, and
Slovakia.
The U.S. Commercial Service at the U.S. Embassy in Prague helps American companies explore business
opportunities here. Due to the importance of building person-to-person relationships in this market, we
recommend that U.S. executives visit Prague themselves, using the Commercial Service's Gold Key Service or
joining a trade mission. Executives may wish to combine their first visit to Prague with introductory visits to other
nearby countries in the Central European region, such as Slovakia, Poland, or Hungary. Please contact us for
more information.

Current Market Trends / Current Demand

SKODA AUTO’s goals are to produce 1 million cars in 2012 and to double its current production to 1.5 million by
the year 2018. Both TPCA and Hyundai have planned production increases in 2009. However, the ongoing crisis
has put all these plans on hold indefinitely.


Barriers
There are no trade restrictions on imports of cars and automotive components from the United States, other than
import duties. However, U.S. imports face strong competition from imports from the other European Union
countries since automotive components produced in the EU can be imported into the Czech Republic duty-free.
Import duties on automotive components have been generally low, ranging from 3.0% - 6.3%. Some foreign
auto-parts producers use this advantage and import components into the Czech Republic from their European
production sites.

American exporters must be aware that each new type of imported product is subject to certification for quality
and safety in conformity with the relevant EU regulations. The certification process requires that a sample from
the planned import batch of the product be tested and approved by a notified body anywhere in the EU.

Trade Events
AUTOTEC BRNO - INTERNATIONAL MOTOR SHOW

June 2011, Brno
Web: www.bvv.cz/autosalon, E-mail: autosalon@bvv.cz
Central Europe’s most prestigious automotive event for
years, AUTOTEC 2010, innovations in the production of
trucks and commercial vehicles, trailers, parts and service
technology. It is listed by O.I.C.A (the International
Organization of Car Producers) among major world
exhibitions.

Automotive Sector Analysis (2010)


Name: Zdenek Svoboda
Email: Zdenek.Svoboda@trade.gov
Phone: +420 257 022 323


Denmark
Capital: Copenhagen
Population: 5,263,327 (2009 estimate) 5.5 million
GDP*: $344.49 billion
Currency: Danish Kronor DKK
Language: Danish

Summary
Due to heavy taxation on new vehicles (up to 180%), Denmark has traditionally had an older car fleet compared
to other Western European markets. The economic boom leading up to the financial crisis somewhat altered this
image, but consumers have once again grown reluctant to purchase new vehicles. Sales of new passenger
vehicles, light and heavy trucks have dropped dramatically over the past year by as much as 50-70%.

This pattern of an aging car fleet, however, provides opportunities for exporters of spare parts as well as
aftermarket accessories.

Market Entry
It is recommended that the Danish market be entered through a Danish or Nordic distributor who knows the
business environment and the distribution channels.

In April 2007, the Danish government introduced a change in the tariff system for automotives. Tariff rates were
changed in favor of environmentally friendly cars. This has lead to considerate discounts on cars that run more
miles per gallon, increasing the demand for these. Nothing indicates for this trend to lose pace. Diesel cars have,
due to a good mix of fuel efficiency and more powerful engine, become more popular in Denmark.

The industry expects a lot from electric cars, both new and fitted. New legislation is still in the making to make
these cars a real and economically viable option for the masses. However, many eco-friendly consumers will go
to great lengths to get their hands on an electric car, and exporters are trying to feed this demand.

Main Competitors
Denmark enjoys competition from the same brands as present in most of Europe, with brands from Asia, Europe
and the United States.

Within spare parts, OEM producers gain large profits. Aftermarket spare parts are also available and are sold
through some retail channels as well as directly from some repair shops.

American products are generally perceived well, and as they are often competitive they should have a chance on
the market.

Current Demand
Sales of new conventional vehicles are practically at a stand-still. This trend will end with the financial crisis.

The combination of very high disposable income and a very low Dollar rate lead to large imports of classic
American cars, trucks and motorcycles. Due to the current economic climate, there is now a heavy overflow of
these vehicles in the Danish market.

Considering the average age of Danish vehicles and the reluctance to purchase new cars there is an ongoing
demand for aftermarket products and services e.g. spare parts and accessories like ICS solutions.
American automotive products are generally perceived well and there are many opportunities for exporters of
high-quality, innovative and price competitive products and services.


Barriers
One of the benefits of working with a distributor in Denmark is their guidance through the potential maze of import
regulations. These regulations, whilst not overwhelming, can be a barrier if U.S. companies attempt the direct to
end-user route.

Import duty tariffs for vehicle equipment (not cars) are generally low and in-line with EU averages. Once cleared
by customs, goods may move freely within the EU. In addition to import duty, all goods are subject to a 25
percent VAT (Value Added Tax) calculated on the landed (c.i.f) cost plus the duty. VAT applies on a
nondiscriminatory basis to all goods, whether imported or locally produced.

Trade Events
No major trade shows in 2009. One large show has been cancelled due to current financial climate.
Name of event: Biler I Bella
Location: Copenhagen
English language website: www.bileribella.dk/ (Danish only)
Description: One of Denmark’s only major automotive trade shows. Bi-annual. Next show will be March 21-23
2010.

No current research available


Name: Peter Strandby
Email: Peter.Strandby@trade.gov
Phone: (45) 3341 7117


Dominican Republic
Capital: Santo Domingo
GDP: $79.65 billion (2009 estimate, CIA World Factbook)
Currency: Dominican Peso
Language: Spanish

Summary
The Dominican Republic (D.R.) is completely dependent on imports of vehicles, automotive spare parts and
accessories. Domestic production of automotive spare parts is limited to batteries and only accounts for two
percent of the total market demand for this product. Japanese vehicles enjoy the most advantageous situation
and dominate the Dominican market in each segment. Financial considerations (price and long-term and low
financing terms), fuel-efficiency, availability of spare parts, quality and a good performance record are the key
factors taken in consideration by Dominicans when purchasing a vehicle.

Market Entry
The best way to introduce a foreign company in the Dominican market is thorough local importers and
distributors. The general import climate in the Dominican Republic is very favorable. The dollar exchange rate is
responsive to market forces and imports can obtain hard currency easily. There are no restrictions for
importation of vehicles and automotive products into the Dominican Republic. However, the law forbids the
importation of used vehicles that are older than five years.

The Dominican Republic - Central American Free Trade Agreement (DR-CAFTA) provides competitive
advantages to American exports to the Dominican Republic because the agreement allows significant reduction
of import duties. As a result of DR-CAFTA, American exports of automotive products to the Dominican Republic
have increased an average of 15 percent.

Main Competitors

Japanese and other Asian products account for most of the imports due to the significant car population
imported from Japan. However, the situation is shifting slowly because of DR-CAFTA. Now that American
vehicles are entering the market duty free, their presence is increasing and the demand for spare parts is also
increasing. Shorter delivery time due to proximity to the U.S. is another advantage for American products in this
market. In addition, the U.S. supplies approximately 75 percent of the total market for large passenger
transportation buses. Also, parts for European and Japanese brands often come through the United States. The
same must be said of the parts for Japanese brands manufactured in the United States.

Current Demand

The market for new automotive spare parts is expected to continue growing over
the next two years due to the DR-CAFTA, especially within the "universal" spare
parts subsector (those that can be used for any car brand: batteries, fuses,
filters, suspension shock absorbers, etc.). This is the best subsector for U.S.
automotive products and one of the best prospects for U.S. goods in the
Dominican market.

Another factor that contributes to a steady increase in the importation of
batteries (especially from U.S.) is their multi-usage. It is estimated that at least
25 percent of the imported batteries are being used in inverters. For years, the
Dominican Republic has suffered severe energy problems that lead to regular
blackouts. Every business has a back-up generator (sometimes two), and 35
percent of the Dominican private residences have an electrical inverter to help them cope with the energy
deficiency. Inverters use from two to twelve batteries depending on their capacity. There is also a significant
market for used automotive spare parts. Of this, 80 percent is dedicated to motor engines and transmissions.
Low incomes of the majority of Dominicans are one of the reasons why most car owners (especially those
dedicated to public transportation) are forced to buy used spare parts.


Name: Isolda Frias
Position: Commercial Advisor
Email: Isolda.Frias@trade.gov
Phone: 809 227-2121 ext. 226


Ecuador
Capital: Quito
Population: 14,257,281 (2010 estimate)
GDP*: $52.5 billion (2009)
GDP/capita: $8,280
Currency: US Dollar
Language: Spanish

Summary
Ecuadorian imports show that the United States continues to be the major source for automotive parts and
accessories in 2009. U.S. market share in the automotive sector has been on average 26% during the last five
years.

Imports of parts and accessories have closely followed the growth trends for
the Ecuadorian vehicle fleet over the years. Following this tendency, the
market for parts and accessories is set to grow in the future, and since the
vehicle fleet has an average age of nine years it is probable that parts and
accessories demand will tend to grow faster than the vehicle fleet.

Market Entry
The Ecuadorian market for automotive parts and accessories is complex due to the number and variety of the
participants. The easiest and fastest way U.S. firms can access to the Ecuadorian Market is through local
representatives (agents) or distributors. There are several automotive parts that require a standards certificate
issued by the Ecuadorian Standards Institute (INEN). In some instances it can be difficult to obtain this certificate;
mainly due to different requirements between the standards systems in both countries (i.e. an optional standard in
the U.S. can be mandatory in Ecuador).

Main Competitors
Competitors include Colombia, Brazil, Japan, as well as many Asian countries.
Name: Andres Gonzalez
Email: Andres.Gonzalez@trade.gov
Phone: +011 (593-2) 398-5000 EXT. 5394


El Salvador
Capital: San Salvador
GDP*: $21.1 billion (2009)
Currency: US Dollar
Language: Spanish

Summary
El Salvador is net importer of all type of vehicles and of almost all the related parts and accessories for their
performance/maintenance.
There are approximately 655,000 vehicles registered in the country. 49% of total registered vehicles are
concentrated in the Department of San Salvador.
The market for vehicles decreased by 60% in 2009, compared with 2008. In 2007 16,924 new cars were sold,
when in 2008 that number went down to 14,355, and in 2009 to 6,744. Regardless the fact that vehicle imports
decreased, when comparing total importation of parts from 2007 to 2008 there was a 17% increase in imports. In
2008, 30% of imported parts and accessories were of US origin.

The market for auto parts is divided in three: the private sector, the public transportation companies, and the
government. Auto repair shops have an important role in decision making for purchasing parts and accessories
for their clients in any of the above three categories of end users.
The private sector includes all the consumers that provide maintenance to their vehicles as well as private
companies that need their fleet working in the best shape possible. The public transportation companies own
6,680 buses, from which 1,604 have more than 15 years of intense public transportation service. Buses are old
and require repair in order to continue providing the much-needed service. All parts to keep the public
transportation fleet working are imported. According to the Vice Minister of Transportation, 80% of the Salvadoran
population uses this public transportation service.
For accessories “Tuning” is always on fashion and tuning followers exhibit their vehicles in San Salvador as well
as in the rest of country, by organizing tours to different cities called “Speedfests”. Additionally, the annual local
trade show called Auto Expo, to be held this year on November 2010, puts together all vehicle related sectors
and auto fanatics and presents to the general public the new auto trends and fashions. U.S. companies exhibit at
Auto Expo through their local authorized representative.
Another reason why this sector is an excellent business opportunity is that Salvadoran vehicles deteriorate faster
and need more parts in order to maintain active use. This is due to poor maintenance of streets, increasing traffic,
disorganized public transportation, use of old vehicles, and importation of used vehicles. Currently, 90% of used
vehicles purchased in El Salvador are imported from the United States and are bought directly from salvaged car
auctions to be repaired locally and then sold. These cars require continuous maintenance and replacement
services. Mechanic and repair shops purchase parts and accessories from local automobile parts importers, as
well as automotive equipment usually imported directly for use in their shops. In comparison to 2008, the demand
for used imported vehicles has decreased by 60%, mainly as a result of the current economic crisis.
There are four associations that represent the interests of the automotive sector: 1- Salvadoran Association of
Auto Parts Importers, 2- the Salvadoran Association of Distributors of Vehicles, 3- the Salvadoran Association of
Importers of Used Vehicles, and 4- Association of Auto Repair Shops.

Market Entry
Importers, distributors, and end users are receptive to U.S. auto parts and accessories due to the products’
quality and warranty, and geographic proximity. Nevertheless, the industry is extremely price oriented and this
means there is strong competition in sales of parts and accessories from other countries like China, Japan,
Taiwan, and Brazil.

Main Competitors
Chinese, Brazilian, Japanese and Korean parts are sold in the country.


Current Demand
There is no significant automotive parts and accessories production in the
Salvadoran economy and thus, almost all parts are imported. The U.S.
Central America Free Trade Agreement (CAFTA), implemented in El
Salvador on March 1, 2006, provides a broader opportunity for the U.S.
industry, since import tariffs for parts under SAC 8708 were automatically
reduced to zero after CAFTA implementation. For Vehicle Accessories under
SAC 8714, 57% of product categories already had 0% tariff and 14% of
product categories became 0% after having a 5% tariff. The remaining
product categories will be decreasing in tariff rates in the following 9 years. Also, American auto brands have
been steadily increasing their units in the market over the past several years, and spares are needed.
Salvadorans recognize the value of quality parts made in the U.S.

Country Commercial Guide, Chapter 4: Leading Sectors for U.S. Export and Investment (2010)

Name: Cecilia Avila
Email: Cecilia.Avila@trade.gov
Phone: +503-2501-3227


Finland
Capital: Helsinki
GDP: $238 billion
Currency: Euro
Language: Finnish (91.5%) and Swedish (5.5%)

Summary

Finland, with a population of 5.3 million, had a total of about 2.8 million passenger cars in 2009. In 2009, 90,574
new passenger cars were registered. According to statistics from 2008, 6,539 cars were directly imported from
the United States. However, the total number of U.S. passenger cars in the market is considerably higher due to
U.S. car manufacturers’ imports from the European Union (EU) area. Vehicles equipped with catalytic converters
and other low emission vehicles made up 67 percent of all automobiles and 72 percent of passenger cars.
According to local sources, passenger car sales in Finland are expected to decline somewhat in 2010 due to
global economic downturn.

Number of automobiles in use 2009 in Finland
2009 2008 Change %

Passenger cars 2 758 291 2 682 831 2,8

328 962 315 275 4,3
Vans

110 638 105 106 5,3
Trucks

12 974 12 230 6,1
Buses

12 821 13 030 -1,6
Other vehicles

Total 3 223 686 3 128 472 3,0

Source: Statistics Finland/TraFI

Market Entry
The technical requirements in EU regulations make it challenging to import non-EU vehicles into
Finland. In Finland, the “single approval” is the only way to enter the market. However, it is time and money
consuming, due to the fact that many technical tests are required to prove that the vehicle meets EU
requirements. The requirements inside “single approval” vary country by country in the EU. In Finland, EU
approval is always mandatory for some vehicle parts, such as lights. For more information, please visit TraFI’s
website http://www.ake.fi/AKE_EN/

The most important factors for choosing and buying a new car for Finns are driving characteristics, appearance,
durability, driving comfort, standard of equipment, and collision safety. Due to weather conditions, the best sales
prospects for automotive parts and accessories are all kinds of devices that improve traffic safety.

The sales of original equipment manufacturers’ (OEM’s) automotive parts and accessories is closely related to
the sales of automobiles of these manufacturers. Since the United States market share of new cars sold in
Finland is not significant, the same applies to automotive parts and accessories.


Main Competitors
U.S. suppliers generally face strong competition from European suppliers. In 2008, Germany was Finland’s
number one supplier of passenger cars (24 percent), followed by the United Kingdom (20 percent), France (8.5
percent) and Japan (8.4 percent).

Current Demand
Currently, imports of automobiles from the United States are about 3-4 percent of total imports. U.S.-made
products, such as steering systems, brake systems and parts, transmission systems, chassis and body parts
have some sales potential in Finland. Also alloy wheels, accessories, chemicals and lubricants have market
potential in Finland.

As the market is developing, local experts mostly agree that the next products with
increasing demand in Finland will be ATV (All-Terrain-Vehicle) aftermarket
products. At the moment, there are only a handful of dealers who sell ATV
equipment and supplies. Sales of products such as winches, tires and rims, and
spare parts and supplies are expected to increase in the years to come.

Trade Events

Helsinki Motor Show
Date: 2010 – Exact dates to be decided
Helsinki Exhibition and Convention Center
English language website: http://www.finnexpo.fi/helsinkimotorshow/default.asp?code_language=en
Description: Finland’s largest automobile and automotive accessories exhibition

Electric Motor Show 2010
September 10-12, 2010
Helsinki Exhibition and Convention Center
http://www.finnexpo.fi/exhibition.asp?Id=1837&code_language=en
Description: Electric Motor Show 2010 event presents the latest electric cars and motorcycles, as well as electric
scooters, bicycles and electric micro cars.


Name: Tarja Kunnas
E-mail: Tarja.Kunnas@trade.gov
Phone: +359-9-616 25345


France
Capital: Paris
Population: 65,073,482
GDP*: $2.9 trillion
Currency: Euro
Language: French

Summary

2008 2009* 2010*
Total Market Size 34,285 27,428 27,428
Total Local Production 35,742 28,593 28,593
Total Exports 28,497 22,797 22,797
Total Imports 27,040 21,632 21,632
Imports from the U.S. 809 797 797
Exchange rate: USD 1.00 Euro 0.7 Euro 0.7 Euro 0.7*
(Figures in USD millions: * estimated figures)
Source: FIEV (French Vehicle Suppliers Association)

France is the fourth largest European automotive market after Germany, the U.K. and Italy, with 2,050,283
new registered passenger vehicles and 5,393,000 second hand passenger vehicles in 2008. France is facing a
most difficult year due to the economic crisis that has hit the worldwide automotive industry. The entire French
automotive business chain suffered essentially because of the decrease in passenger vehicles production, which
plunged 15.3% in 2008 to 2.5 million vehicles (instead of 2.9 million in 2007).

French automotive parts suppliers’ sales totaled approximately USD 34.2 billion in 2008, which
represented a decrease of 12.1% compared with 2007. Professionals within the industry estimate a turnover
decrease of 20% to 25% for 2009. The drop in production and demand for passenger cars in France will also
affect automotive parts suppliers in 2010. Estimates for 2010 are difficult to establish but figures should be similar
to 2009. The industry is still very prudent as incentives (which help boost sales of small and green vehicles) will
not be renewed in 2010.

The main categories of automotive parts included in these figures are: power train equipment (41.9%), vehicle
interiors (29.6%), tire-to-road link components (13.7%), body components (11.5%) and equipment for
measurements, checks, diagnostics and repairs (3.3%). This equipment is sold to the OEM market (Original
Equipment Manufacturers) and the aftermarket, which includes the OES (Original Equipment Suppliers) and the
IAM markets (Independent Market).

OEM auto parts sales reached approximately USD 28.2 billion, a 12.6% decrease compared to 2007. On the
other hand, automotive parts suppliers’ sales to the aftermarket (OES + IAM) decreased by 9.5% to
approximately USD 6 billion in 2008.

France lost 7,000 automotive workers in 2008 for a total of 107,000 employees.

The automotive parts market in France is dominated by big multinational firms, many of them American with
French or European operations. The FIEV (The French Vehicle Equipment Industries Association) regroups the
main parts and equipment suppliers in France. Large U.S. suppliers are already present in France and are doing
well. Among the twenty top suppliers, eight are American (Delphi, Visteon, Johnson Controls, Lear, TRW
Automotive, Dana, Arvin Meritor, Federal Mogul). There is little or no room for mid-sized exporters in this very
closed environment, where competitive requirements, transportation costs, etc., make it very difficult for firms not
physically established here to sell their products to OEM and OES. U.S. industry generally supplies the French
market from its European subsidiaries or via local joint ventures.

Direct imports from North America decreased in 2008 to 797 million dollars. The trend is still to source in Asia, the
Middle East and North African countries.


The FIEV, the French Vehicle Suppliers Association, has mapped the evolution of the supply chain, and it is
obvious that French manufacturers encourage their key suppliers to co-locate in manufacturing plants adjacent to
the in-country assembly operations, or in European countries close by.

Most of the larger vehicle manufacturers have rationalized their suppliers’ base of components and sub-
assemblies and have stopped manufacturing parts in-house wherever possible. The trend is toward Tier One
suppliers that provide complete sub-assemblies of parts sourced from the variety of Tier Two and Tier Three
component manufacturers. Key suppliers are gaining greater competence in modules, systems, and even
complete vehicle manufacture and have to meet the highest standards to be able to compete in this industry.

Current Demand

Opportunities for U.S. suppliers will be on highly technological products or those that are innovative in the context
of the environment or security and safety. On-board communication tools are enjoying good growth.

Trade Events/Associations

Equip Auto 2011-Trade Show – October 2011
Website: http://www.equipauto.com

French Vehicle Equipment Industries Association
Website: http://www.fiev.fr

French Association of Automotive Independent Distributors
Website: http://feda.fr

The Automotive Parts & Equipment aftermarket Distribution Networks in France – 2010
Overview of the Electrical Vehicles Market in France - 2010


Name: Stephanie Pencole
Position: Commercial Service, Trade Specialist
Email: Stephanie.Pencole@Trade.gov
Phone: + 33-1 43 12 71 38


GERMANY
Capital: Berlin
GDP*: $2.81 trillion
Currency: Euro
Language: German

Summary
German original equipment (OE) and automobile manufacturers are very receptive to U.S. products and U.S.
manufacturers of automotive parts and services will find ample opportunities in the German market, if they take
into account that Germany abides by strict environmental policies and safety standards.
With more than 46 million passenger vehicles and over 3 million heavy trucks on the roads, Germany is the
largest market in the EU for automotive products. In Western Europe, German manufacturers account for 47
percent of all of the vehicles sold, and worldwide, for close to 20 percent. The German automotive industry
employs 750,000 employees and, with sales of Euro 290 billion, accounts for 20 percent of Germany’s economy
and has the highest percentage of exports. Every seventh job in Germany is dependent on the automotive
industry.
Because the German automobile industry is so important, the present economic turndown is causing
considerable difficulties with a decrease in exports of 42 percent (3 of 4 vehicles manufactured in Germany are
exported). This massive decrease in exports severely impacts not only vehicle manufacturers, but also
automotive suppliers and all of the related industries; steel, plastics, electronics and chemicals. For 2009, it is
expected that 25 percent of German suppliers will incur considerable losses and that almost 20 percent will go
out of business (200 of 1,000 German suppliers) within the next two years.
On the domestic side, the German government is subsidizing the purchase of new vehicles by offering money to
scrap vehicles which are more than 9 years old. As a result, new registrations in Germany have risen by 40
percent in the first months of 2009. Despite this present increase, the German Automotive Industry Association
(VDA) expects only 2.9 million new domestic registrations by the end of 2009, against 3.1 million registrations in
2008.
As almost 17% of all German automobile exports are sold in the United States and in addition, German
manufacturers maintain large manufacturing facilities in the U.S., major U.S. automotive component and
equipment suppliers are in an ideal position to increase their sales to German manufacturers. In 2008, German
automobile plants in the United States increased their sales to Latin America by 8 percent and to Brazil by 6
percent.
German automobile manufacturers are cutting costs by replacing many of their European suppliers with U.S.
suppliers, both for their U.S. and other global plants. For this reason, U.S. automotive parts manufacturers are
well placed to supply German plants in both the United States and around the world. BMW, for instance,
recently announced that it intends to double its purchasing within NAFTA to Euro five billion per year. BMW and
Daimler already work together on purchasing certain equipment and hope, until 2012, to save Euro four billion
through mutual purchasing. They recently announced that in 2008, this way, they saved three times more than
by buying alone over the last years. However, they both agree that they can only mutually purchase up to 10
percent of their total, otherwise the individual brands/designs would start to suffer.
Since 2007, U.S. manufacturers have increased their efforts to acquire German automotive original equipment
(OE) suppliers. At the same time, as German vehicle manufacturers continue to demand lower prices from parts
suppliers, many German suppliers will be forced to merge or go bankrupt. Since, November 2008, over 50
German suppliers have filed insolvency. For this reason, and as an average vehicle uses more than six thousand
parts and one missing part can shut down production completely, the trend is to again use multiple suppliers,
rather than just one or two suppliers as has been the case over the last years.
In 2008, higher fuel prices forced vehicle manufacturers to move towards manufacturing alternative fuel powered
vehicles. Although German manufacturers already offer 80 models in Germany which use less than 5 liters per
100 kilometers, and 336 models which use less than 6.5 liters per 100 km, the German automotive industry is
focusing on the production of electric vehicles. U.S. automotive electric component manufacturers are well
placed to take advantage of the trend to “green” power.


Market Entry
Participation by U.S. companies in German trade shows is one of the best means of finding customers in
Germany and throughout Europe. U.S. manufacturers not yet represented in the European market, or those who
wish to present new products, should consider exhibiting at international German trade fairs.
U.S. exporters must comply with EU and national legislation when it concern type approvals of vehicles and parts.
Technical Standards
The huge differences in technical standards between vehicles sold in the United States and those sold in the EU,
whether built by German or U.S. manufacturers, have long been cause for controversy. The cost of designing the
same vehicle, but having to build in different systems, such as lighting or emission systems for the different
markets, have often led to unnecessarily high costs. Taking into account that EU and U.S. manufacturers
produce 43 percent of the world’s vehicles (24.4 million), it is important that technical standards be simplified
between the two areas. For this reason, in April 2007, the U.S. Government and the EU Commission created the
“Transatlantic Economic Council (TEC)”, and are now working closely together to create a transatlantic “level
playing field”.
In this context, the German Automobile Association (VDA) – www.vda.de and the U.S. Motor and Equipment
Manufacturers Association – www.mema.org are working closely with their members, and with each other, to
minimize the complexity of standards.
Technical standards are defined, maintained and approved by:
DIN Deutsches Institut fuer Normung e.V.
(German Institute for Standards)
Internet: http://www.din.de/cmd?level=tpl-home&languageid=en

For a fee, English translations of standards are available from Beuth Verlag GmbH (Beuth Publishing), at the
same address.
Testing Requirements for Manufacturers of OEM Parts, After-Market Parts and Accessories
U.S. Manufacturers can contact CS Frankfurt for a list of individual companies/agencies in Germany
(complete addresses) that certify products to the following standards:

ISO/TS 16949
QS. 9000
VDA 6.x

For further information on trade regulations and standards, please see the Country Commercial Guide for
Germany, which can be accessed through the National Trade Data Base (NTDB) of the U.S. Department
of Commerce.

Labeling
According to Regulation Kfz-GVO 1400/2002, “original replacement parts” are defined as parts manufactured by
the parts supplier, regardless of whether they are sold through the automobile manufacturer-approved distributors
or on the open market. Previously, replacement parts built by the same supplier but not sold through approved
distributors were identified as “identical parts.” This legislation will be in place until 2010.

Customs Duties
Customs duties for automotive parts and accessories average approximately five percent. No customs duties are
levied on imports from European Union (EU) countries. An import turnover tax of 19% is currently applied, which
in turn is passed on to the final customer as a value-added tax (VAT). VAT also applies equally to European and
German suppliers. Trade restrictions or other non-tariff barriers (such as quotas) do not exist, but all equipment
has to comply with German (and/or European) safety regulations and technical standards. The metric system of
weights and measures is standard in Germany.

Certification
German standards for safety of equipment are set by over 200 technical standards and regulations.
Important conformity requirements are tested by the TUEV Rheinland Group, which provides international
certification for machinery, including ISO services. Its North American offices can be accessed online at
http://www.us.tuv.com. The German agency responsible for standardization, the Deutsches Institut fuer
Normung e.V. provides an online directory at http://www2.din.de/index.php?lang=en .


Technical regulations for industrial vehicles are harmonized on the basis of an agreement reached by the UN
economic commission in 1958. All automobiles and parts must be marked with an international compliance mark,
which consists of a circle with the letter “E” and the number of the appropriate country (1 for Germany). A list of
technical requirements can be found in German on the website
http://www.bmvbs.de/Verkehr/Strasse-,1446/KfZ-technische-Vorschriften.htm.

Disposal Requirements
Vehicles and components on the German market are subject to the “German Ordinance on the Transfer,
Collection and Environmentally Sound Disposal of “end-of-life” Vehicles,” also called AltfahrzeugV (abbreviation
for Altfahrzeug-Verordnung). According to this ordinance, all vehicle manufacturers and component
manufacturers may not put materials or components on the market if they contain lead, mercury, cadmium, or
hexavalent chrome. In addition, they are subject to coding standards as outlined by the European Commission in
Article 8, Paragraph 2 of Directive 2000/53/EC. This paragraph concerns itself with identification of components
and materials that are suitable for reuse or recycling. Finally, manufacturers of vehicles and component are
required to provide information on the dismantling, storage and testing of reusable components to accredited
dismantling facilities without prejudice to commercial and industrial confidentiality. The full text of Altfahrzeug V is
available in English at
http://www.bmu.de/files/pdfs/allgemein/application/pdf/vehicles_vo.pdf

In addition, as of January 2009, a 2,500 euro automobile disposal ruling is in effect in Germany (known as
Abwrackpraemie). Anyone participating in the “clunker ruling” must be the registered driver of the old vehicle for
at least one year. The “clunker” automobile must also be a minimum of nine years old and the new vehicle must
comply with the euro 4 carbon dioxide emission standards. The ruling is expected to be in place until the end of
2009, in order to boost the economy and reduce layoffs in the automobile sector.

Tuning, customizing
Customizing cars remains a popular trend in Germany. The following models are customized most often in
Germany: BMW, Fiat, Ford, Honda, Mercedes, Mini, Seat, Suzuki, Toyota and Volkswagen. The Essen Motor
Show remains the main show for Northern Germany, Netherlands and Belgium. However, the new “Tuning World
Bodensee”, which takes place in Friedrichshafen on Lake Constance (Switzerland is just across the border), is
rapidly increasing in importance for German and Swiss tuners and customizing companies. A good reason is that
it takes place at the beginning of May and international car clubs gather around Friedrichshafen to meet and
camp out and, at the same time, to hold their own events parallel to the show. (See below for details on both
shows.)

As car customizing continues to grow in Germany, opportunities exist for U.S. manufacturers of high quality and
price competitive audio equipment (HS-852721910, HS-852721990); Alloy wheels (HS-870870500), wooden
trimmings (HS-442010190), seat covers (HS-630493000) and other interior and exterior car accessories for
European and Asian cars. In this area, U.S. manufacturers face tough competition from German and Asian
manufacturers. Increasingly, many customizing and tuning products are sold by international manufacturers via
websites.
Micro technology
The further rapid development of micro technology is revolutionizing the electronics sector, providing micro-
sensors and motors for a huge number of applications, such as in lighting systems (both interior and exterior),
airbags and other safety applications. In addition, micro camera systems complete with motors and sensors have
been developed to assist drivers in a possibly dangerous situation (such as braking in fog/lane change, driver
drowsiness, etc.).

The increase in use of a multitude of sensors and motors means that the use of EDS (electronic distribution
systems/cables) is also on the increase, with a luxury German vehicle now needing up to 2,000 meters of cabling.
Alternative materials
Alternative energy has always been a major theme for manufacturers and suppliers in Europe and all agree that
in order to combat fuel consumption less steel/weight will be used in the future. Aluminum and magnesium will
play a larger role, as will plastics and elastomers. Whereas aluminum, magnesium and plastics are used for 15%
of parts at the moment, BASF estimates that by 2010, plastic parts will account for 20% and in some cases even
25% of materials used.


Main Competitors

U.S. suppliers generally face strong competition from European and Asian suppliers. Nevertheless, Germany
remains the major market for U.S. automotive exports.

Current Demand
Figures show that strong exports consist of original parts and systems (OE), as well as aftermarket parts and
accessories. A high volume of automotive exports are made up of the following products: gasoline engines and
parts, seating and interior trim, transmission and power train components, suspension parts, lighting equipment,
metal stampings, air-conditioning parts, tires and chemicals. It is also expected that exports of OE infrared blind-
spot detectors, radar enhanced cruise control (HS-903289900), and head up display of speed/distance will
increase in the near future.

Ongoing discussions on declining sources of fossil fuels, increasing energy costs, and the environmental
damages caused by CO2-emissions have led to increased worldwide research and development (R&D) of
vehicles that use a minimum amount of fuel. One third of all of the automobiles that are produced in the EU are
made by German manufacturers and the automotive market is the most important sector for the German
economy. Germany, therefore, has taken an international lead in the effort to reduce CO2 emissions and the
German R&D sector is rapidly developing alternative drive systems, such as electric motors, fuel cells and hybrid
technology.

The demand for such technologies is enormous. Studies show that approximately 29% of German consumers
state that environmental sustainability is important for their next car purchase (see figure 1).

While traffic volumes in Germany are continuously growing, the transport sector is facing the major challenge of
trying to cut CO2 emissions and reduce its dependency on oil, while also safeguarding a high level of mobility.

Current negotiations in the EU regarding climate protection and CO2-emission targets for the automotive industry
have prompted the German government to introduce tax incentives for vehicles with low CO2 emissions. German
manufacturers need to drastically step up their efforts to meet the target value of 130 gram CO2 emission per
kilometer by 2012. The current average fleet value for German automobiles is presently at 173 g CO2/km. (see
figure 2)

In response to the recent financial crisis, the German federal government introduced the so called
“Umweltprämie” (“clunker” scrapping incentive) in order to support the automotive industry and to reduce the
number of old cars on the road with high fuel consumption. Car buyers who scrap their old cars, which must be at
least nine years old, qualify for a EUR 2,500 bonus to put towards a new vehicle. As a result, sales of hybrid drive
vehicles have increased considerably since the end of 2008.

Replacement parts continue to make up approximately 60% of the aftercare and accessories market, with more
than EUR 43 billion in sales. In this sector, brake pads, electrical systems, exhaust and motor parts are most
frequently replaced or repaired, making up 49% of all replacements and repairs (see chart below). Brake systems
and transmissions were the parts experiencing the highest growth rates in value terms in 2006. As the electrical
content of cars increases, the frequency and value of repairs in this segment will continue to increase rapidly.

In the aftermarket segment, more than half of all maintenance and repair services is now electrical. The
availability and accessibility to technical information is a major issue to the aftermarket. High-tech automotive
development is expected to increase rapidly in the coming years, making OE technical information, universal
testing and diagnostic equipment, software, tools and training a critical element to repair workshops.

Barriers
A major barrier to U.S. imports is the German approval and certification of automotive products. CS Frankfurt can
supply a separate report on the topic of German approval and certification for U.S. products.


Trade Events
Over 90% of products and technologies are introduced into the German market via trade fairs.
Participation by U.S. companies in German trade shows is one of the best means of finding global customers.
U.S. manufacturers not yet represented in the European market, or those who wish to present new products,
should consider taking full advantage of the business opportunities presented at the international German trade
fairs. The U.S. Commercial Service in Germany provides counseling, market research, and other support
services to U.S. exhibitors before, during and after the show. Details of U.S. pavilions at these trade fairs can be
obtained from CS Frankfurt. Relevant fairs are listed below:

Event: AUTOMECHANIKA
Site: Frankfurt
Dates: September 14-19, 2010
Internet: http://automechanika.messefrankfurt.com/frankfurt/en/home.html
E-mail: info@messefrankfurt.de

or, contact in the United States
Messe Frankfurt, Inc.
Ms. Brigdett Ferris
International Sales and Marketing Manager
1600 Parkwood Circle
Suite 615
Atlanta, Georgia 30339
Telephone: (770) 984-8016 Ext. 426
Telefax: (770) 984-8023
E-mail: brigdett.ferris@usa.messefrankfurt.com
th
The 20 Automechanika in 2008 featured 4,471 exhibitors,
including over 180 from the United States, on 300,000
square meters of exhibition area, which attracted over
161,000 trade visitors from 80 countries. Automechankia is
the world's largest trade fair for automotive parts &
equipment and workshop equipment & services. Since
2002, Automechankia also showcases OE parts and
systems. The trade fair is held every other year,
alternating with the IAA trade fair (see below). The fair
consists mainly of buyers from international wholesalers
and distributors.

In mutual cooperation with the major U.S. associations, CS Frankfurt provides pre-show support and product
promotion for U.S. manufacturers to the European press, as well as hands-on support at five major U.S.
pavilions.

Event: Z - Die Zuliefermesse (The Subcontracting Fair)
Site: Leipzig
Dates: March1-4, 2011
E-mail: info@leipziger-messe.de
Internet: www.zuliefermesse.de

CS Frankfurt recruits and organizes a U.S. pavilion at this fair. For further information please contact CS
Frankfurt (contact information follows at the end of this report).

The fair is for Tier One, Tier Two and Tier Three automotive parts manufacturers and systems suppliers. It also
features machine tools. This fair is not for aftermarket products or accessories.

In 2009, The "ZulieferMesse and Mechatronix (Z)” and “Intec Messe” combined featured 1320 exhibitors from 28
countries. The conventions spread over an area of 60,000 square meters, which attracted more than 20,200
industry visitors. "Z" is for the automotive supplier and machine tool sector and is very specific, showcasing
original automotive parts, equipment and systems (OE products only). Part of the fair is dedicated to the
automotive machine tool sector.


Event: Testing + Engine Expo
Site: Stuttgart
Dates: June 22-24, 2010
E-Mail: info@ukintpress.com
Internet: www.engine-expo.com

At this very specialized niche event in 2009, more than 350 exhibitors displayed products. This event features
engines and OE testing equipment. In 2009, the event covered a total exhibition area of 18,000 square meters.
Over 11,000 businessmen attended the fair, a high percentage of them from foreign countries. The testing event
concentrates on all types of equipment that could be possibly used in OE vehicle testing. This event does not
cover or include aftermarket test equipment.

The engine expo deals only with parts and equipment that make up an engine.

Event: IAA (International Automobile Exhibition)
Site: Frankfurt
Dates: September 17-27, 2009
Internet: www.vda.de or www.iaa.de

or, contact in the United States:

Motor Vehicle Manufacturers Association
Att. Mr. Evers
300 New Center Bldg.
Detroit, MI 48202
Telephone: (313) 872-4311
Telefax: (313) 872-5400

In 2007, a total of 1,081 exhibitors (42 % from foreign countries) displayed their products in ten halls. Total
exhibition area covered 169,495 square meters. Nearly one million people visited the show. More than 62
percent came from 125 foreign countries.

Most of the consumers visit the ground floors of all of the major halls, where the IAA showcases new passenger
vehicles (88 new car premiers in 2007) as well as tuned and customized vehicles.

Of the industry visitors, 26% are from automobile manufacturers and 28% come from parts and equipment
manufacturers. These mainly visit the exhibits in the floors above, where manufacturers display OE and
equipment, as well as aftermarket parts and accessories. According to the VDA, 25% of the industry visitors are
decision makers. Purchasing personnel are hard to find at the stands, as booth staff are normally from the sales
or press department. The show is ideal for U.S. manufacturers that wish to promote/launch a new product,
especially those seeking visibility with consumers.

Event: IAA NUTZFAHRZEUGE - Heavy duty vehicle exhibition
Site: Hanover
Dates: September 23 – 30, 2010
Internet: www.vda.de

or, contact in the United States:

Motor Vehicle Manufacturers Association
Att. Mr. Evers
300 New Center Bldg.
Detroit, MI 48202
Telephone: (313) 872-4311
Telefax: (313) 872-5400

In 2008, a total of over 2,000 exhibitors from 110 countries displayed their products at the Hannover truck show.
The total exhibition area was more than 188,578 square meters.


The IAA Nutzfahrzeuge fair exhibits manufacturing trucks & bodies, buses and trailers. IAA also showcases
accessories and devices for transport. In addition, exhibitors include logistics and transport companies dealing
with freight by land and rail.

Event: International Supplier Fair (IZB) – automotive original equipment (OE)
Site: Wolfsburg
Dates: September 29 – Oct. 1, 2010
Internet: www.izb-online.com

In 2008, more than over 680 manufacturers from 22 countries displayed their products at the International
Suppliers Fair, held for the fifth time at Volkswagen headquarters in Wolfsburg. The total exhibition area was
more than 188,578 square meters, spread out through 6 halls.

The original conception of the IZB, was that suppliers would come to exhibit their products in Wolfsburg, to give
the Volkswagen purchasing department the opportunity to examine OE products on one spot, at the same time.
In the meantime, the event has become so international that purchasing personnel from around the world come,
in order to examine the latest developments and technology. As Volkswagen is about to start production at its
new factory in Tennessee, North America has been chosen as “Partnerland” for the 2010 event.

Core themes, in addition to traditional automotive OE products, are electrical components, mechatronics, joining
and bonding technology; metal and lightweight body construction, plastics, interiors, modules, chemical products,
powertrain control, power plant, chassis, development, IT service providers, and finance.

Event: Tuning World Bodensee
Site: Friedrichshafen
Dates: May 13-16, 2010
Organizer: Messe Friedrichshafen
E-mail: tuning@messe-fn.de
Internet: www.tuningworldbodensee.de

The “Tuning World Bodensee” is an interactive meeting of the industry, a focal point for associations,
wholesalers, retailers, tuning clubs and race organizers. Held in May, the tuning world descends on
Friedrichshafen, camping out, sleeping in their vehicles/trailers, or staying in picturesque hotels on Lake
Constance. The show is rapidly increasing in size, having first been held in 2003.

In 2009, “Tuning World” featured more than 220 exhibitors (“hardcore”), on almost 80,000 square meters of
exhibition area and attracted almost 107,500 visitors from all over Europe. This trade fair is one of Europe’s most
attractive tuning shows; members from 154 private clubs displayed their vehicles and staged a continuous
succession of tuning/customizing events and rock concerts. The show is not only a meeting point for
wholesalers; it also serves as a major sales outlet to the general public, with many booths presenting their latest
tuning systems and accessories for sale.

Event: Essen Motor Show
Site: Essen
Dates: Nov. 27 to December 05, 2010
Nov. 26 to December 04, 2011
Organizer: Messe Essen GmbH
E-mail: info@messe-essen.de
Internet: www.essen-motorshow.de

In 2009, the Essen Motor Show featured more than 600 exhibitors, on over 50,000 square meters of exhibition
area. It attracted 346,800 trade visitors, most of them from Europe. CS Frankfurt has organized pavilions at this
show a number of times. However, the show is heavily consumer orientated towards younger people.

The market for original components and systems (August 2009)
The market for Hybrid, electric and fuel cell vehicles (August 2009)



Name: Paul R. Warren-Smith
Position: Senior Automotive Specialist
Email: Paul.Warren-Smith@trade.gov
Phone: +49-69-7535-3153


Honduras
Capital: Tegucigalpa
GDP*: $32.5 billion (2009 estimate)
Currency: Lempira (LPS)
Language: Spanish

Summary
Market demand for U.S. products in the automotive parts and service equipment sector look promising, with an
expected growth rate of 15 percent over the next three years. An aging car population continues to fuel demand
for automotive parts and accessories in Honduras. An estimated 70 percent of the total vehicle population,
registered at 852,604 units in 2008, is at least 5 years old and in need of constant repairs. According to industry
sources, the global slowdown has reached Honduras, and is having a negative impact on domestic demand for
new vehicles. The total vehicle population, however, could double in the next 5 years, and the distances traveled
should also increase due to an accelerated urban expansion. The total Honduran market for automobile parts,
accessories and service equipment is estimated at $517.3 million in 2009.

2007 2008 2009 (estimated)
Total Market Size 393.8 449.8 517.3
Total Local Production N/A N/A N/A
Total Exports N/A N/A N/A
Total Imports 393.8 449.8 517.3
Imports from the U.S. 283.4 249.5 286.8
(Sources: USDOC/OTII and SIECA. Data in USD Millions).

Market Entry
Many Honduran firms have enjoyed longstanding relationships with U.S. suppliers and the high receptivity to U.S.
products is reinforced by the geographical proximity of the two countries. The duty assessed by the Honduran
government at the time of customs clearance ranges from 0 to 15 percent for most items. With the
implementation of the Central American Free Trade Agreement (CAFTA-DR), about 80 percent of U.S goods now
enter the region duty-free, and U.S. suppliers are well positioned to expand their market share in the automotive
parts and service equipment sector.

For marketing purposes, Honduras can be divided into two regions: the North Coast, including San Pedro Sula,
the country’s commercial and industrial capital; and the Central region, where Tegucigalpa, the political capital
and largest city, is located. Tegucigalpa and San Pedro Sula are the major distribution centers for imported
goods. The most common way to distribute automotive parts and service equipment in the local market is
through direct importers, who also act as specialized retailers. A single distributor or representative is generally
sufficient to cover all of Honduras.

Honduras, located in the heart of Latin America, is only at a 2-hour flight from several U.S. gateway cities and 48
to 72 hours by sea. With the lowest logistical costs in the region, Honduras serves as a distribution platform for
the rest of Central America. Puerto Cortés, the largest deep-water port in the region, is the first port in Latin
America to qualify under both the Megaports and Container Security Initiatives (CSI), which now make
approximately 90 percent of all transatlantic and transpacific cargo imported into the U.S. subject to prescreening
prior to import.

Price is among the most important selling factors in Honduras, followed by quality, availability of parts, and
delivery time. In many cases, Honduran business people buy directly from the source if they feel that the cost-
savings is sufficiently advantageous. The local banking system is traditionally conservative and generally
extends only limited amounts of credit, though looser monetary policies and increased competition from regional
and international banks including HSBC and Citigroup led to an expansion of consumer credit in 2007. U.S.
exporters that offer attractive financing terms, low prices, warranty, and excellent customer service on sales to
Honduran traders have the best chance of gaining market share.


Despite harsh economic conditions, industry contacts perceive this sector as a growing market. The higher cost
of purchasing a new vehicle, for example, forces owners to maintain their old automobiles and buy parts and
accessories more frequently. Public service transportation units represent one of the major end-users of
automotive parts and accessories in Honduras. Most of the urban transportation fleets use buses of low
operational quality, which are 80 percent obsolete. The replacement needs for urban buses alone is estimated at
over $60 million. According to the National Statistics Bureau, buses and other passenger transportation vehicles
report an average annual growth of 2,500 units.
There are more than 300 retailers of automotive parts and accessories in Honduras who buy directly from
overseas or through local distributors. Japanese cars and light trucks dominate the market but parts are often
purchased through the United States. American-made pickups, SUVs, heavy trucks and buses have stronger
shares of the local market. Recent tariff changes for automotive vehicles include the elimination of a
disadvantage to U.S. vehicles vs. Japanese models, as Honduras rescinded the tariff based on engine size.
According to the “Regulation of Hazardous Gas Emissions of Automotive Vehicles” enacted in 2001, aimed at
reducing the increasing air pollution levels generated by tailpipe emissions in the major cities of Honduras, all
passenger motor vehicles need to be fitted with an emissions control system or catalytic converter. This
important regulatory measure, coupled with the growing demand for effective emissions control devices, should
positively influence the demand for automotive parts and accessories through local repair shop services.

Main Competitors
Honduras has no local production of automotive parts & accessories. The United States is one of the major
suppliers in this sector, along with Japan, Taiwan, Korea, China, Brazil, Mexico, Germany and the U.K.
Japanese vehicle brands constitute about 70 percent of the total car population. In recent years, however, the
Honduran market has seen the introduction of several major American automotive brands, creating stronger
competition for suppliers from other countries.

Current Demand

In general, most automotive aftermarket products and
service equipment are expected to offer good sales
opportunities in the Honduran market. Particularly
promising products include:
All types of engine spare parts
- Electrical and brake system components
- transmission and suspension parts
- tires; wheels
- bumpers; spoilers; tail lights
- mobile electronics; alarms; sound systems
- repair shop, paint, tools & equipment
- emission control equipment
- batteries
- automotive accessories

Barriers
Recent tariff changes involving the removal of a complete ban on the importation of used automobiles and
passenger motor vehicles of more than 10 and 13 years old, respectively, is expected to increase the used
vehicle population in Honduras (former import regulation was 7 and 10 years old).

Trade Events
There are no locally held automotive shows in Honduras. The Commercial Service Office in Tegucigalpa
annually recruits and leads a delegation of Honduran automotive aftermarket leaders to the Automotive
Aftermarket Industry Week (SEMA/AAPEX) show in Las Vegas, Nevada, the most important retail and specialty
automotive aftermarket trade event in the U.S. For more information on this International Buyer Program, please
visit www.aaiwshow.com


Automotive Parts and Service Equipment Overview – Honduras, August 2009.


Name: Rossana Lobo
Email: Rossana.Lobo@trade.gov
Phone: + (504) 236-9320, ext. 4842


Hungary
Capital: Budapest
GDP (PPP): $207.9 billion (2010)
Currency: Hungarian Forint
Language: Hungarian

Summary
Hungary is home to a large automotive components industry as well as some assembly plants. The market for
automobiles in Hungary has robustly expanded since the mid-1990s, helped by the rise of personal disposable
income and the easing of available credit. There are currently 3.5 million passenger cars in Hungary with an
average age of ten years (8 years in the capital city of Budapest), so there is still a large growth opportunity in the
replacement of the old vehicles. Although sales have dropped sharply in the past months due to the global
financial crisis, in the medium term, demand for less expensive small, compact cars looks promising. The
automotive after-market also remains interesting for U.S. manufacturers.

Market Entry
With Hungary’s accession to the European Union (EU) on May 1, 2004, Hungary adopted the EU’s common
external tariff (CXT) rates. Tariff assessment and all other customs procedures take place at the first port of entry
into the EU. However, Hungary still collects the Value Added Tax (VAT) on all goods with Hungary as a final
destination. VAT is now 25 percent on most products and services.

For cars, a Registration Tax and Environmental Product Fee also has to be paid. The amount of the Registration
Tax depends on the environmental ranking of the car, the engine size, the type of fuel and the age of the car.
The Environmental Product Fee (Green Tax) is applied on the production, sale, importation or intra-EU
acquisition of certain items, such as lubricating oils, tires, cooling equipment and refrigerants, batteries, electric
appliances and electronic equipment.

The vehicle manufacturing sector became a vital source of FDI for the Hungarian economy at the beginning of the
1990s. The market, including the production of motor vehicles, associated parts, trailers and other transport
vehicles, shares nearly 25% of the industrial output. A network of suppliers and components manufacturers has
also developed and continues to expand, servicing the domestic market as well as the automotive industries on
the neighbouring markets. Suppliers from the EU, the US and Japan have also established operations in
Hungary, and thus Hungary became home to large automotive assembly plants such as Audi, Opel and Suzuki.
Mercedes-Benz is in the middle of establishing a factory here in Kecskemet where the production of Mercedes A
class vehicles will start early 2011.

The Hungarian automotive sector is now facing one of the most serious downturns among all industries in view of
the global financial crisis. Even in 2010 there was a 20 percent decline in new car sales, despite the fact that
sales figures were boosted by foreign buyers availing of subsidies. Purchases by foreign buyers from countries
where governments are offering citizens subsidies to trade in their old cars for new ones accounted for as much
as 80% of all new car purchases at some dealerships (The scrapping schemes favour small, fuel-efficient cars
and many Western-European dealers soon ran out of stock of certain models). It is expected that 50,000 cars
and 10,000-11,000 small commercial vehicles will be sold in Hungary this year.

Main Competitors
Foreign-owned domestic manufacturers dominate sales in the Hungarian automotive industry and about 95% of
the cars produced in Hungary are exported. On the market of passenger cars the former leader Suzuki was
overtaken by Ford (15%), followed by VW Group Skoda (12%) and by Opel (10%).
* Ford also leads the light commercial vehicle market with Ford Transit, tailed by VW Transporter and Fiat Caddy.


Current Demand
There are 3.5 million cars registered in Hungary, a number which has
continuously increased in the past years. However, ownership still remains
well below the levels of EU27 countries. Hungary is considered a one-car
market, with most households keeping a single car to serve the needs of the
entire family. Small and medium-sized cars dominate sales. Eighty percent of
cars sold in Hungary are either in the compact class, or in the lower medium
class, making these the fastest-growing segment of the sector over the past
few years. Suzuki was a market leader from 1994 until 2008, when Ford took
over the leading position in the passenger cars subsector. Growth in the
premium segment is fuelled mainly by increasing demand for sports utility
vehicles (SUVs).

Less expensive, gasoline engines dominate the market: While in Western
Europe about half of all passenger vehicles are diesel powered, in Hungary this share is only about twenty
percent.

There are roughly 11.8 thousand motorcycles in Hungary and mopeds account for about 40% of the market. The
leading brand is Honda, followed by Suzuki. The average age of motor vehicles in Hungary is eight year and is
predicted to remain far above the EU average, ensuring strong demand for spares and maintenance services.
Performance and tuning parts make up a growing, but still relatively small part of aftermarket sales.

Practically all of the major international oil and gas manufacturers - such as MOL, Agip, ÖMV, Avia, Shell, Lukoil
- own and control filling stations in Hungary selling their own automotive maintenance products. Engine oil is the
largest segment in the lubricants market followed by gear and hydraulic oil.

Barriers
Products have to comply with European safety regulations and technical standards.
The metric system of weights and measures is standard in Hungary.

Trade Events
Automobile 2011
Budapest, October 27-30, 2011
http://www.automobil.hungexpo.hu/&_nyelv_=en
The bi-annual fair presents the full range of the vehicle maintenance industry's garage industry products, parts
and accessories together with its servicing, fitting, repair and remanufacturing technologies.


Name: Csilla Viragos
Email: csilla.viragos@trade.gov
Phone: +36-1-475-4250


India
Capital: New Delhi
Population: 1.16 billion (May 2009 estimate)
GDP*: $1.16 trillion
Currency: Indian Rupees
Language: Hindi, English

Summary

The Indian automotive industry is on a fast track for growth. India is emerging as the world’s fastest growing
passenger car market, second largest two-wheeler, and fifth largest commercial vehicle manufacturing center in
the world. India produced 1.8 million passenger cars and 417,126 commercial vehicles, and 8.4 million two-
wheelers (motor cycles and scooters) during the fiscal year ended with March 2009. Major international
automobile companies including Ford, General Motors, Hyundai, Suzuki, Mitsubishi, Toyota, BMW, Nissan,
Renault, and Volkswagen maintain manufacturing facilities in India and compete with home grown companies
such as Tata Motors and the Mahindra group. The Government of India’s Automotive Mission Plan 2006-2016
(AMP) envisions India as the destination of choice for the design and manufacture of automobiles and auto
components by 2016. The AMP projected that the sales revenue of the Indian automobile industry will reach
$122-159 billion by 2016 from $34 billion in 2006.

Market Entry
The Government of India (GOI) allows the imports of automobile and components, production machinery,
Computerized Numerically Controlled (CNC) machinery, tools and dies without government approvals and on
payment of applicable customs duty. The GOI also allows licensing arrangements and joint venture opportunities
in this sector. Foreign investment up to 100% is allowed in the automotive industry sector.

The Indian automobile industry is a mature industry segment with several MNCs competing with local companies.
The Indian automobile market is set to expand exponentially in the next 5-10 years, given the strong growth in
demand. McKinsey projected that the Indian middle class will reach 550 million by 2025, from the present 200
million growing middle class with strong purchasing power, signaling a sustained growth for the automobile
sector. Realizing a strong latent potential, international automobile manufacturers are finalizing major new
investment plans. These include: Ford $500 million, Ashok Leyland-Nissan $500 million, Nissan-Renault $1
billion, VW (put in U.S. $$), Honda $250 million, and Tata Motors $240 million.

The Indian automotive components industry, with over 500 local firms in the organized sector, is a mature
segment manufacturing a range of products for both domestic and export markets. The Indian auto components
industry sector has been recording an average annual growth of over 20% in the past years. With the current
recession and reduced automobile sales, growth was reduced to 8-9% through March 2009. An estimated 80-85
percent (pick either % or percent and stick with it) of the auto parts ventures are ISO 9000 certified, and some
have received the Deming Award, the highest TQM award for quality. The Indian auto component sector reached
a sales turnover of $18 billion in FY 2008 (ended in March 2008), including exports of $3.6 billion and imports of
$4.9 billion. According to a McKinsey study, the Indian auto components sector has a potential to reach $40
billion by 2016.

Main Competitors
International players compete with Indian automobile manufacturers in the passenger cars and commercial
vehicle space. Ashok Leyland, Mahindra & Mahindra, and Tata Motors are the major home grown companies
that compete aggressively in the passenger cars and commercial vehicle segment. Indian automobile
components ventures compete with international leaders such as Delphi, Visteon, and Bosch. Indian companies
have formed joint ventures with leading foreign companies to manufacture components locally. Global
automobile manufacturers including Ford, General Motors, and Toyota have set up their international purchasing
offices in India to source components for their global operations. India is also fast becoming the global hub for
automotive R&D center. General Motors, Daimler Chrysler, Bosch, Suzuki, and Johnsons Control, among others,
have set up their development center in India.


Current Demand
The market is so large and diverse that a large number of players can be absorbed to accommodate buyer
needs. The auto component sector not only has global players looking to invest and expand but leading domestic
component companies are also pumping in huge sums into expanding operations. An auto park is coming up
near Hyderabad with investments worth over $ 409.30 million from around 34 automotive ancillary units. This is in
addition to a $245.59 million Greenfield project being set up by MLR Motors near the park. To cater to these
upcoming investments and projects, all technology focused products for the OEM segment is expected to be in
great demand in the country.

Indian automobile companies are also looking for products and technologies to improve fuel efficiency and
emission standards. Emission norms of the Indian automobile
sector will be on par with the Euro norms by 2010, requiring Indian
cars to employ the latest technologies to meet the stringent
standards. The GOI is considering implementing tough safety and
security norms for vehicles by 2010, leading to opportunities for
safety products such as car protection during collision, etc. O nce
go vern m ent init iat ives o n vehicle safet y regulat io n s are
im plem ent ed, rapid gr o wt h in t he safet y elect r o nics segm ent
is also t o b e ex pect ed, o ffering o ppo rt unit ies fo r U. S. safet y
syst em m anufact urers. The electric and hybrid vehicle market is
another segment offering opportunities for the U.S. suppliers.

The aftermarket is not well organized and aftermarket companies
are scattered throughout the country. They are usually small-sized
traders selling products to end users and retail customers. Major trading companies import products from
neighboring countries and distribute them to the retail segment. The Indian aftermarket companies deal with a
range of automotive products manufactured in the country and/or imported from neighboring countries in the
region. Price, rather than performance, is the major factor in retail purchase decisions. India is an extremely
price sensitive market. There will be opportunities in the aftermarket segment if the U.S. companies adjust their
price accordingly.

Trade Events
th
Name of event: 10 Auto Expo
Location: New Delhi
English language website: http://www.autoexpo.in/
th
Description: 10 Auto Expo is India’s largest automobile and components exhibition to be held in New Delhi,
January 5-11, 2010. Industry leaders and decision makers will attend the exhibition and seminar.

India: Opportunities in Indian Auto Components Sector (June 2009)
India: Automotive Electronics Market (July 2007)


Name: R. Swaminathan
Email: swaminathan.ramakrishnan@trade.gov
Phone: + (91-44) 28574477


Israel
Capital: Jerusalem
GDP*: $ 215 billion
Currency: New Israeli Shekel (NIS)
Language: Hebrew

Summary

In 2009, 172,715 new vehicles were imported to Israel worth approximately US$2 billion. Of the 2.5 million cars,
3.7% are made in the United States and the balance from Europe (45.9%) and Asia (50.4%) - Japan 39.1% and
South Korea 11.3%. The five top brands are Mazda, Hyundai, Toyota, Chevrolet (Korea), Ford (EU). In 2009,
total imports of aftermarket products amounted to $325 million, of which $22 million was from the U.S. and the
bulk of the balance from Germany ($49 million), Japan ($35 million) and Asia ($42 million). The automotive
aftermarket sector in Israel consists of original equipment manufacturers (OEM) parts and their substitutes. In
Israel there are presently between 600–700 importers of aftermarket products and around 20 local manufacturers
of aftermarket parts and accessories.

American spare parts are recognized for their high quality although in recent years Israel has progressively
adopted European standards for vehicles as the bulk of cars being imported are from Europe and the Far East.
Taxes in Israel are among the highest in the world, which industry sources blame as the main factor preventing
the car market from reaching its potential. Discounting taxes, car prices in Israel were among the lowest in the
world, up to 40% less than in Europe. In 2010, the Ministry of Transport & Safety will introduce new legislation,
which will allow the parallel importation of vehicles by either individuals or newly appointed distributors who must
meet stringent requirements. Personal car imports account for only 2% of all car imports, but nearly 25% of luxury
car imports (mostly from the USA) costing more than NIS 200,000 (USD$54K). Moreover, Japanese and
European models, which are made in the USA according to American standards, will now be allowed into the
country.

Market Entry

Partnering up with a reputable local representative who has excellent contacts in the industry, proven reliability,
loyalty, technical suitability and after-sales service capability is a key factor to success in selling and maintaining
a continued presence in the Israeli market. U.S. companies need to be aggressive in their pursuit of business
opportunities and maintain an active in-country presence.

The most common approach used by exporters is to obtain a local importer/distributor. Distributors will import on
their own account, carry sufficient stock to satisfy ongoing demand or to use for demonstration, maintain their
own sales organization, supply spare parts and maintain a service division, if applicable.


Israel's Green Tax reform went into effect on August 2, 2009. The reform sets tax incentives aimed at reducing
vehicular air pollution. The reform comes in the wake of the recommendations of a Green Tax Committee, which
included representatives of the Ministries of Finance, Transportation, National Infrastructure and Environmental
Protection.

The tax reform largely relates to changes in purchase taxes imposed on new motor vehicles weighing less than
3.5 tons. For the first time, tax rates on vehicles will be linked to the level of pollution emitted by these vehicles.
Relatively clean vehicles will enjoy a significant tax benefit and lower sales prices while polluting vehicles will cost
more in the wake of the reform.

The tax group of each vehicle model is based on the following:

1. Air pollution testing of each car model before it is approved for use in Israel, or in Europe or in the United
States. The test results provide information on the following pollutant emissions: carbon monoxide (CO),
hydrocarbons (HC), nitrogen oxide (NOx), particulates (PM) and carbon dioxide (CO2).


2. Factoring of the emission data of each model by means of a "green grade." The grades are divided into 15
groups of pollution that form the basis for tax credits, with group 1 representing the cleanest vehicle group
and group 15 the most polluting. Setting the tax benefit for each group according to its pollution level. The tax
benefit is granted after uniform taxing of all vehicles at a rate of 90% (except hybrid cars and electric cars).
The rate of benefit ranges from 15,000 shekels ($3,950) for relatively clean vehicles to 0 shekels for the most
polluting group.

The new tax structure will make cleaner and smaller cars less expensive by thousands of shekels, while the cost
of polluting cars will increase significantly in order to incentivize the public to purchase more environment friendly
cars. Taxes will go down for most of the smaller family cars that cost up to 120,000 shekels ($31,600), the benefit
of which, the Taxation Department. Hope will flow to the consumer.

Main Competitors

The majority of cars in Israel are from Europe and the Far East. Israelis in general and leasing companies, in
particular, that are the main buyers, prefer compact, reliable and fuel efficient vehicles. With it has come a flood of
Asian made aftermarket products, which are far cheaper than American and European products. Historically
these products were far more inferior but over the years their quality has greatly improved making it more difficult
for American products to compete in this very price sensitive market.

Current Demand

Israeli importers are always on the lookout for quality products at competitive prices – usually in that order.
Market demand is greatest for the following products:

• Car security and anti-theft devices: anti-theft electronic systems, locking devices
• Car body: bumpers, radiator grills, hood and trunk lids, wings, front and rear lamps (i.e., the parts most
vulnerable in car accidents)
• Service parts: disc brake pads, shock absorbers, front
suspension parts, filters for oil and lubrication, air conditioning
parts
• Replacement service parts: tires, fan belts, water hoses, water
pumps, brake components, engine and transmission
components, electrical components, undercarriage items that
need replacing at the end of the warranty period
• Vehicle accessories: car care products, polish, wax, upholstery
spray
• Water-coolants (Glycol) for radiators
• Electronic accessories: TV screens for the rear seats, GPS systems, sound systems etc.
• Universal lubricants: well-known brand names of high-grade oils, lubricating, glycol, wax. The market
demands well-known brand names

Barriers

All US-made vehicles entering Israel must be retrofitted with EU standard headlights. CS Israel and the DOT are
currently working with the Ministry of Transport to find a technical solution which will allow the use of both
systems in Israel.


Name: Alan Wielunski
Email: alan.wielunski@trade.gov
Phone: +972-3-519-7390


Japan
Capital: Tokyo
Population: 127 million (2010 estimate provided by CIA Factbook)
GDP*: $5.068 trillion (2009 estimate provided by CIA Factbook)
Currency: Yen
Language: Japanese

Summary

The automobile industry is Japan’s primary manufacturing sector. Global demand for Japanese autos is virtually
certain to grow in the long term on the basis of existing sales networks and future technologies, with emerging
economies holding the best growth prospects. Due to the current global economic slowdown, sales of
automobiles and auto parts have temporarily dropped precipitously, and as Japan’s traditional purchasing
practices are forced to evolve as a result, opportunities for U.S. auto parts manufacturers to conduct business
with Japanese auto manufacturers are increasing. Key areas of current market trends include modularization,
environmental technologies (including electric and hybrid systems), and safety. U.S. auto parts manufacturers
with state-of-the-art technologies in the areas of “next-generation” transportation systems, transportation safety,
traffic accident reduction, theft-resistance, and electronic components should consider entering this market.

Market Entry

Japanese auto manufacturers have maintained “keiretsu relationships” under which they dealt almost exclusively
with other Japanese auto manufacturers by building close personal and business relationships. On one hand,
this competition-free keiretsu transaction was the source of cost competitiveness of the Japanese auto
manufacturers, while it has gradually revealed its own downside. In order to survive global competition and a
high Yen rate firms have been expanding toward a more keiretsu-free procurement environment. This may
enable U.S. auto parts manufacturers to enter the market.


The Japanese government demands for improved environmental performance and safety. This has impacted the
auto and auto parts industry in significant ways, as illustrated by increasing cases of specification changes in
auto-parts materials.
Modularization: Modularization enables auto manufacturers to streamline assembly lines, reduce assembling
man-hours, and speed up auto production. This occurs when auto parts manufacturers, referred to as “Tier 1”
suppliers; take over the work of parts assembly previously performed by auto manufacturers themselves.
Modularized parts are delivered to auto manufacturers.
Environmental technologies: Changing consumer awareness and regulatory pressures all point to the need for
new ways of building and operating automobiles. The need to ensure sustainable growth is accelerating demand
for new power development and recycling technologies. Automobiles will be forced to meet increasing demands
for exhaust gas reduction, fuel performance enhancement, noise reduction, resource-conservation, and
recyclability.
Safety: Automakers are under pressure to upgrade the strength of outer panels, equip vehicles with multiple air-
bags to protect drivers, passengers, and even pets; enhance accident-preventing technologies and reduce
congestion while decreasing the distance between vehicles at high speeds. The Japanese government has
organized an Active Safety Vehicle (ASV) promotion deliberation system aimed at developing safer vehicles by
upgrading the sophistication of automotive functions with the use of electronics technology, and reducing human
error and misjudgment in driving. Electronic control technology is an indispensable factor in ASV and, as the
technology progresses; electronics-related industries can expect to enjoy a substantial increase in demand.

Main Competitors

Japanese auto manufacturers are Daihatsu Motor Co., Ltd., Fuji Heavy Industries Ltd., Hino Motors, Ltd., Honda
Motor Co., Ltd., Isuzu Motors Limited, Mazda Motor Corporation, Mitsubishi Fuso Truck and Bus Corporation,
Mitsubishi Motors Corporation, Nissan Diesel Motor Co., Ltd., Nissan Motor Co., Ltd., Suzuki Motor Corporation,
and Toyota Motor Corporation. The leading Japanese auto parts manufacturers or “Tier 1” suppliers are: Aisin
AW Co., Ltd., Aisin Seiki Co., Ltd., Calsonic Kansei Corporation, Denso Corporation, Jatco Ltd., Koyo Co., Ltd.,


NOK Corporation, NSK Ltd., NTN Corporation, Sumitomo Wiring Systems, Ltd., Tokai Rika Co., Toyoda Gosei
Co., Ltd., and Yazaki Corporation. There are countless “Tier 2” and “Tier 3” suppliers in Japan who are
specialized in their forte.

Current Demand

Japanese auto parts manufacturers are required as never before to compete on cost, develop differentiating
products (including modularizing and designing capabilities), and upgrade the operating efficiency of their
domestic production base.
Japanese auto manufacturers are proceeding with the research and
development of the Next Generation Vehicles (NGV) such as Electric
Vehicle (EV), Plug-in Hybrid Car (pHV), Hybrid Car, Hydrogen
Vehicle, Fuel Cell (FC) Vehicle, Clean Diesel Vehicle, and
Compressed Natural Gas (CNG) Vehicle.
Intelligent Transport Safety (ITS) uses cutting-edge information and
communications technologies to network data between people,
roads, and vehicles to reduce road congestion, accidents and
improve traffic flow. The Japanese government has been promoting
ITS development and announced ITS development guidelines to
achieve progress in three basic areas: safety and security, fuel
efficiency and environmental protection, and comfort and
convenience. Current R&D is focused on fuel conservation driving
control technology, autonomous driving control technology, driving
situational recognition, position recognition technology, and inter-
vehicle communication technology.
The development of EV and ITS, combined with emerging safety and environmental requirements, is forecast to
further accelerate the computerization of automobiles. The proportion of electrical components in the cost of
manufacturing is rising.

Barriers

There are no specific obstacles for U.S. auto and auto parts manufacturers to conduct business in Japan.

Trade Events

Tokyo Motor Show
Location: Makuhari Messe, Chiba Prefecture
Website: http://www.tokyo-motorshow.com/en/index.html

Tokyo Auto Salon
Location: Makuhari Messe, Chiba Prefecture
Website: http://www.e-autosalon.net/tokyo/english/index.php


Automotive Parts Industry (2009), Auto Parts in Central Japan (2009)


Name: Sayoko Koto
Email: Sayoko.Koto@trade.gov
Phone: +81-3-3224-5079


Jordan
Capital: Amman
GDP*: $2,700
Currency: Jordanian Dinar (JD)
Languages: Arabic & English

Summary
Jordan’s population is 5.6 million, with approximately750,000 registered vehicles, resulting in a car-to-inhabitant
ratio in Jordan of 0.13 (this is not a ratio). Cars in Jordan are predominantly small cars with engine sizes less
than two liters; however, recently there has been a growing market for SUVs, and mini-vans.
The total annual market for auto repair and maintenance equipment in the past two years is worth nearly $13
million and is supplied almost entirely by imports, of which the United States has an estimated 15 percent market
share. The end user market includes more than 1,300 licensed and accredited repair shops (mainly independent
garages, tire specialty service stations, machine shops, etc.), 33 authorized new-car dealers that also provide
garage services, and 150 authorized auto-parts import shops. Other end users include garage and repair shops
that are not registered, used car show rooms estimated at 1,200, and an estimated 1,400 used parts importers.
The used car market share is continuously increasing. Although used cars must pass inspections prior to entry to
Jordan, there are no requirements for secondhand cars to pass any inspection before they can be re-sold within
the Kingdom. The dealer usually inspects secondhand cars re-sold by the authorized dealers as a result of trade-
ins; however, the majority of second-hand cars are traded between car dealers and/or individuals who usually
select a garage or shop of their preference to conduct such inspection.

Market Entry
Generally speaking, the Jordanian market is very favorable towards imports, especially those from the United
States. There are no particular restrictions or barriers to imports of U.S. products. The U.S.-Jordan Free Trade
Agreement (FTA), which entered into force in 2001, will eventually eliminate duties and commercial barriers to
bilateral trade in goods and services originating in the United States and Jordan.
U.S. companies interested in entering the Jordanian market are advised to establish business agreements with
local representatives. Local distributors usually use Letters of Credit (L/C) when dealing with foreign suppliers of
equipment. A grace period of 30 to 90 days is granted to local distributors to settle their accounts.
In order to take advantage of the benefits for U.S. goods under the FTA, U.S. exporters need to understand how
to determine that their goods are originating or qualify for preferential duty treatment under the U.S.-Jordan FTA
Rules of Origin, and specifically claim FTA treatment for each qualified shipment. See www.ustr.gov for more
information.

There are 755,5 (up to the end of 2006) motor vehicles registered in Jordan for a little over 5.6 million people.
This puts the vehicle-percapita ratio in Jordan at 0.13 (not a ratio). Jordanians tend to keep their cars for longer
periods than Europeans and Americans. Given the high fuel prices, Jordanians also prefer compact vehicles;
however, minivans and SUVs are gaining in popularity. Labor costs are relatively low in Jordan; therefore, labor
saving equipment does not have a significant advantage over other types of equipment, except in improving
efficiency.
The market for air-conditioning maintenance and repair equipment is growing significantly. Five years ago, fewer
than 10% (stick with % or percent throughout report to be consistent) of the cars in Jordan had standard air-
conditioning. Today, that number has jumped to over 50%. Other best prospects are electronic diagnostic
devices. Car dealers are also a primary source for car maintenance services, followed by independent garages
and service stations. Potential end users that are accredited and registered at the Jordan Vocational Corporation
and their estimated numbers are as follows:
New Car Authorized Dealers 33
Used and New Car showrooms 1200
Tire authorized importers (dealers) 28
Authorized auto-part importers 150


Auto-part distributors 3000
Used auto-parts importers 1400
Garages 1300
There is a demand for distortion measuring equipment especially in the newer bodywork repair shops, with the
conventional body shops having to compete with the newer and better equipped authorized dealers,. Laser
distortion measuring devices, preloaded with the specs of vehicles common to the local demand, can sell well if
properly marketed.
The big governmental entities that own large fleets of vehicles and equipment such as the Armed Forces, the
Ministry of Public Works, the Ministry of Water and Irrigation, and the large municipalities (such as Amman and
Zarqa), usually have central workshops for the maintenance and repair of such vehicles. Such entities are also
potential end users of garage and service equipment, especially for the larger sized vehicles (e.g., trucks and
construction vehicles)

Main Competitors
Below is a list for some of the main types of equipment utilized in the car service industry, which is expected to be
in demand due to the continued growth in the Jordanian market:
HS 8203-8205 Hand tools and the like (screwdrivers, clamps, etc)
HS 84254 Lifts, jacks, and hoist equipment
HS 84152 AC testing equipment for vehicles
HS 9027 Gas and smoke detection equipment
HS 9030 Equipment for measuring voltage, electricity, resistance, etc.
HS 9031-9032 Other checking and diagnostics equipment
The average value of imported garage equipment and tools in the last year were estimated at nearly $13 million.
Asian and European products have the biggest market shares for these products. The biggest U.S. market share
is in diagnostics and lifting equipment.

Current Demand
The various types of garage equipment in Jordan can be categorized into the following main categories:
• Hand tools and the like (screwdrivers, clamps, etc)
• Lifts, jacks, and hoist equipment
• AC testing equipment for vehicles
• Gas and smoke detection equipment
• Equipment for measuring voltage, electricity, resistance, etc.
• Other checking and diagnostics equipment
The above categories were mainly identified based on the value of imports
over the past two years. However, some equipment that had relatively low
value of imports is believed to have good future potential. This is
especially true with the advancement in the car manufacturing industry
and the more extensive use of electronics and high tech systems in cars
today. Although a good proportion of garage shops in Jordan are
traditional and old fashioned, this trend in the car manufacturing industry
warrants that such garages utilize sophisticated and modern equipment.
With awareness and regulation on environmental issues increasing, the
market for environmentally-friendly equipment is growing accordingly.
Garage equipment sold in Jordan is almost exclusively metric. Gauges
indicate grams, liters, Newton’s meter, atmospheres, etc. Fittings and connectors are also metric. Electric tools
sold in Jordan must be 230 volts with a 50 MHz frequency

Barriers
Jordan restricts used tires from being imported.


Trade Events
Name of event: Jordan Motor show 2009
Location: Amman
English language website: http://www.ifpjordan.com/exhibition_overview.php?id=108
Description: The Jordan Motor show 2009 will offer exhibitors an exceptional opportunity to meet buyers and
decision makers from Jordan and the region in a professionally organized setting. Since many Iraqi
businesspeople – including auto importers - have a base in the Jordanian capital Amman, the Jordan Motor show
2009 will allow participants unique access to Jordan’s Iraq-bound auto re-export market. The show will see a
series of world debuts and interesting announcements.


No current research available.

Name:
Fareedon Hartoqa
Email: Fareedon.Hartoqa@trade.gov
Phone: +962 6 590-6053


Kazakhstan
Capital: Astana
GDP*: 61,155$ billion (2007 estimate)
Currency: Tenge
Language: Kazakh

Summary
Kazakhstan’s car market has been rapidly growing since the country’s independence and currently presents good
sales opportunities for U.S. suppliers of used and new cars and service equipment. Car supplies from the U.S.
grew sharply in 2007 due to the introduction of new legislation banning imports of right-hand drive cars from
Japan and the strengthening of the Euro relative to the dollar.

The passenger car market has been rapidly growing since the independence of Kazakhstan. After years of
uneven growth ranging between 20-60% a year, the market totaled 2.6 million vehicles in 2007. According to the
Road Police Department under the Ministry of Interior Affairs, the number of vehicles on Kazakhstan’s roads is
projected to increase to 4.5 million vehicles by 2012.

In 2007, Kazakhstan imported 310,000 passenger cars, including over 31,000 new cars sold through official
dealers. This represents a 53% increase in the new car market from 2006, when official dealers sold 20,000 cars.
Official dealers expect only moderate market growth in 2008, up to 35,000-40,000 cars, as a result of the ongoing
liquidity crisis in Kazakhstan. Also, the sales process will change slightly, as clients that use to purchase high-end
expensive cars will partially move to the mid-priced automotive segment.

In addition, Kazakhstan’s market is now much better protected against gray market dealers who reportedly sold
less than 7,000 new cars in 2007, which represents a great improvement from previous years when the gray
market accounted for 70% of all sales of new cars. Official dealers have expanded their distribution and
showroom network and upgraded service facilities, and now Kazakhstani buyers tend to choose official dealers
over the gray market.

Used cars account for almost 90% of current imports, with 70% of cars older than seven years. Kazakhstan has
recently banned imports of cars older than ten years and there are expectations that the import regime will be
further tightened and imports of cars over seven years old will be limited (but no official announcements have yet
been made).

Market Entry
New-to-market suppliers interested in the market should find capable agents or distributors who are
knowledgeable about both importing and distribution. Local dealers have expressed interest and a willingness to
act as agents and/or distributors for American exporters of used and new cars. However, they note that a
potential U.S. supplier must be competitive to succeed in this market.

Main Competitors
Until 2001, most cars were imported from Russia and Germany. From 2002-2006, the majority of imports from
Japan were from new and used cars. While traffic moves on the right-hand side of the road, there were no laws
against vehicles with right-mounted steering wheels, so used Japanese cars with right-hand steering were very
popular with Kazakhstani buyers. In January 2007, Kazakhstan banned imports of vehicles with right-mounted
steering wheels, though previously imported right-wheeled cars can be used without limits. Currently most car
imports come from the U.S., Germany, Eastern Europe and the UAE.

Currently, the top ten best selling brands in Kazakhstan include Toyota, Mazda, Daewoo, Nissan, Volkswagen,
Ford, Opel, Audi, BMW, and Mercedes-Benz. Car dealers note a sharp decrease in sales of BMWs and
Mercedes-Benz as a result of the growing Euro-dollar disparity.

There are 11 official dealers representing over 40 car brands in Kazakhstan. The key players are Astana Motors
with 33% market share, Mercur Auto with 28% share, Toyota Center Zhetysu with 20%, and Bibek Auto with 8%.


Astana Motors represents seven brands, including Toyota, Hyundai, Subaru, Mitsubishi, Honda and BMW.
Mercur Auto represents over ten brands, including UzDaewoo, VW, Ford, Audi, Volvo, Porsche, and Land Rover.
Toyota Center Zhetysu – Toyota and Bipek Auto – Russian-made cars and locally assembled Chevy Niva,
Scoda, and Chevrolet.

Current Demand
Automobile dealers are seeking to diversify and expand models represented, and have expressed growing
interest in dealing U.S.-manufactured cars. The strengthening of the Euro relative to the dollar has created more
favorable conditions to introduce new U.S. brands in Kazakhstan. Currently, the U.S. brands actively represented
by official dealers are Chrysler-Jeep-Dodge (from a VA-based dealer) and Ford. There is a limited number of GM
vehicles (including Hummers) sold through the gray market, and likewise various models of Cadillac can be seen
on the streets (the Escalade being the most popular). From discussions with Kazakhstani dealers, there may be
many others companies authorized to sell in Kazakhstan, but which do not have the resources or interest to do
so.

Trade Events

Trade Promotion Opportunities Auto World Astana 2008
April 24-26, 2008, Astana
http://www.autoworld.kz/en/2008/)

Transit Kazakhstan 2008
May 28–29, 2008, Astana
http://www.exhibitions.kz

Auto Show 2008
October 23-26, 2008, Almaty.
Type: The largest event in Kazakhstan’s car market.
http://www.exhibitions.kz

Kazakhstan: Car Market Overview (Apr 2008)

Name: Oxana Parshina
Email: Oxana.Parshina@trade.gov
Phone: + 7 (727) 250-4850


South Korea
Capital: Seoul
Population: 48.51 million (July 2009 est.)
GDP*: USD 1.34 trillion (2009 est.)
Currency: Won
Language: Korean

Summary
Overview Korea’s automotive parts and accessories market

2007 2008 2009(E)
Total Market Size 48,078 39,857 36,387
Total Local Production 53,968 45,079 38,907
Total Exports 9,925 9,570 7,204
Total Imports 4,036 4,348 4,684
(Unit: USD million)(Source: The above statistics are unofficial estimates based upon Korea Automotive Industry Cooperative
Association reports)
[USD1= 930 Won (2007), 1,100 Won (2008), 1,277 Won (2009)]

In 2009, Korea manufactured 3.5 million automotive vehicles, making it the fifth largest car manufacturer in the
world after China, Japan, the U.S., and Germany. The total size of the automotive parts market was estimated at
USD 36 billion in 2009, 24 percent drop from 2007, largely due to the depreciation of Korean won (KRW). The
OEM market segment accounted for about 94 percent of total market demand and the aftermarket approximately
represented remaining 6 percent.

Market Entry

U.S. suppliers need to be aware of the competition, and offer products with technological advantages that the
competition does not have. They also need to educate end-users about the advanced features of their products.
It is strongly recommended to partner with a qualified and capable Korean distributor who maintains its existing
sales network to serve end-users. Exhibiting at local automotive trade shows can be a useful platform to explore
the market and gain exposure to end-users.

Tapping into the Hyundai and Kia plants in the U.S. and U.S. parts suppliers with a manufacturing base in Korea
is highly recommended to gain access to the Korean OEM market. Most of the major auto parts suppliers have a
manufacturing base in Korea, which include Delphi, Visteon, TRW, Johnson Automotive Controls, etc.

For the aftermarket, U.S. companies are recommended to supply through existing channels that include OEM’s
after-sales service networks, automotive service franchises, independent auto service shops, etc.


In the era of global competition in the automotive industry, Korean OEMs are expected to expand global
outsourcing practices for the procurement of parts and accessories. Industry sources predict that the launch of
Hyundai Motors’ manufacturing plant in Alabama and Kia Motors’ Georgia plant will accelerate this trend.

Main Competitors
Total market size decreased to USD 36 billion in 2009 from 39 billion in 2008. However, the imports increased to
USD 4.6 billion, 16 % increase, despite the steep KRW depreciation against USD in 2008.
Domestic Korean suppliers and transplants of non-Korean part suppliers in Korea are dominant in the Korean
market with their established business with OEMs.


Current Demand
For OEM:
- Leading-edge engine design, engine control units (ECU), electronic engine parts
- Advanced core parts, including automatic transmissions, anti-lock brake
systems and air bags
- Hybrid car, fuel cell cars, and other low-emission related technologies

For the aftermarket:
- Replacement parts
- Spark plugs
- Ignition cables
- Timing belts
- Wiper blades
- High-end car audio systems and components
- High-performance automotive chemicals, such as wax and rust-proofing solutions, and Accessories like window
films.

Barriers
Korea has very rigid automotive safety and pollution control standards. Finished automotive products that are
being widely used in other advanced countries are often times found to be not in conformity with Korean
regulations. The import tariff for most automotive parts is 8%.

Trade Events
Name of event: Korea Auto parts & Auto-related Industry Show (KOAA Show 2010)
Location: Ilsan, Korea
English language website: www.koaashow.com
Description: KOAA Show is Korea’s largest annual automotive trade show, attracting 330 exhibitors including 93
exhibitors from 16 countries, and 22,000 buyers in 2008. KOAA features engine systems, power train,
suspension, steering, body and exterior, interior and HVAC, chemicals, tuning equipment, etc.

Korea: Automotive Aftermarket (2008)


Name: YoungWan Park
Email: youngwan.park@trade.gov
Phone: +82-2-397-4164


Kuwait

Capital: Kuwait City
GDP*: $ 116 billion
Currency: Kuwaiti dinar
Language: Kuwaiti

Summary
The State of Kuwait is a significant importer of new and used American automobiles. The low-cost of fuel and
consumer preference feed the demand for new and large-sized automobiles. This country of 3.4 million people
purchases between 50,000 and 70,000 cars per year. Of those, Kuwaiti consumers buy about 1,500 GM full-size
Sports Utility Vehicles (SUVs), while other U.S., European and Japanese SUVs share the new and used car
market. In addition to SUVs, Kuwait is an excellent market for high-end luxury automobiles. With U.S.
automobile exports valued at $540 million, this is the single largest niche for U.S. exporters in the Kuwait
consumer market. Due to the economic slump, according to one source, it is estimated that auto and auto parts
dealers will decrease by 10% compared to 2008. The penetration of U.S. vehicles is higher in Kuwait than in
other GCC (spell out) countries. The United States is a major source for auto parts for European and Asian
vehicles as well as U.S ones.

Large sized SUVs with heavy-duty shock absorbers, transmissions, cooling and air conditioning systems and tires
which meet extreme temperatures and road conditions are best prospects. Luxury automobile manufacturers will
also find an excellent market in Kuwait. Given Kuwait’s leading position in supply chain and logistics services to
Iraq and Afghanistan, companies such as does not exist any longer Mercedes and Freightliner are selling large
volumes of trucks to serve logistics companies serving U.S. and coalition forces in the region. Most auto dealers
note that the utility vehicle market is showing tremendous volume growth. The low price of gasoline, between
$1.00-1.20 per gallon, propels sales for SUVs and other large engine/gas hungry vehicles that consume a lot of
fuel.
The State of Kuwait is a significant importer of new and used American automobiles. The low-cost of fuel and
consumer preference feed the demand for new and large-sized automobiles. This country of 3.4 million people
purchases between 50,000 and 70,000 cars per year. Of those, Kuwaiti consumers buy about 1,500 GM full-size
Sports Utility Vehicles (SUVs), while other U.S., European and Japanese SUVs share the new and used car
market. In addition to SUVs, Kuwait is an excellent market for high-end luxury automobiles. With U.S.
automobile exports valued at $540 million, this is the single largest niche for U.S. exporters in the Kuwait
consumer market. Due to the economic slump, according to one source, it is estimated that auto and auto parts
dealers will decrease by 10% compared to 2008. The penetration of U.S. vehicles is higher in Kuwait than in
other GCC countries. The United States is a major source for auto parts for European and Asian vehicles as well
as U.S ones.

Selling Factors/Techniques
Once an U.S. firm appoints a manufacturer’s representative or agent, he expects, and should, receive the
principal’s full support with respect to literature, technical information and advertisement materials. Possible
public sector buyers and potential private sector importers should receive product catalogs and other literature
clearly displaying the name and address of the local representative or distributor. A common and highly effective
support practice is to invite the representative or agent to the principal’s country every year for annual sales and
technical support meetings and training. Both agents and, if possible, their principals, should periodically visit
existing and new customers since the importance of personal contact in Kuwait cannot be overemphasized.
U.S. exporters often fail to win or keep contracts in Kuwait because they fail to listen to or get to know their
customer well enough. In order to be competitive in the local market, the key selling factors in Kuwait include
price, quality, effective and convenient after-sale service and support, payment terms, discounting, and
commitment to the business relationship. Payment installment plans and discounts are common marketing tools
in a market that exhibits a highly price-driven demand.


Marketing schemes vary and include offering commercial discounts, sales, free service for equipment purchased
over a limited offer period, give-aways, warranties, trade-in opportunity and promotional events. For consumer
products, Kuwait inaugurated a local shopping festival called “Hala Febrayer” (Welcome February). Special
offers and promotional campaigns are common during this period, with hotels and other entertainment centers
offering special rates and deals to attract shoppers from the region. Companies are reminded that all sales
discounts require prior approval of the Ministry of Commerce and Industry.

Exhibitions in Kuwait are local and regional in nature. The best attended shows are Bahrain, Jordan or UAE.
The support of a local representative or agent will go a long way in establishing a presence for the U.S partner.
Participating alongside your representative makes good business sense. American Business Council of Kuwait,
supported by the Commercial Service, will sponsor a “Brands USA” Trade Show in March 2010 to introduce new
U.S. products to Kuwait.

Pricing
Pricing
As a key selling factor in Kuwait, payment installment plans and discounts are common marketing tools in this
market. Until you know your client, we recommend cash advance or Letters of Credit. Marketing schemes
include commercial discounts, sales, free service for equipment purchased over a limited offer period, give-away,
warranties, trade-in opportunity and promotional events.

Trade Fair
The Kuwait International Fair hosts an automobile exhibition with the next show in 2010. Information can be found
at www.kif.org.
The largest Gulf auto show is in Dubai. For more information visit: http://www.dubaimotorshow.com.

Distribution and Sales Channels

Marketing of most foreign products in Kuwait is through local agents or
distributors. Depending on the location, type of product and after market
support that may be required, most U.S. companies will work through an
agent or representative who would have access to a distribution network
and have a customer support operation in place. Commission-based
representatives/agents, on the other hand, periodically visit their
customers with their foreign principals to maintain vital personal contact.
For direct support of U.S. interests in Kuwait, please contact any of the
Commercial Specialists located at the U.S. Embassy in Kuwait.
http://www.buyusa.gov/kuwait/en/contact_kuwait.html.

Imports
Most products imported into Kuwait from a non-GCC member state will be assessed a duty of 5%. This will need
to be included in any pricing calculation. There is no Value Added Tax. In addition to the CIF price quotation plus
import duty, U.S. exporters should be mindful of the Kuwaiti agent’s commission (often between 5-15%), other
transportation costs, and any installation costs or training that may be part of the agreed upon terms of delivery.
Most U.S. exporters find Kuwait a more expensive export destination than expected.


Name: Xavier Muthu
Email: Xavier.Muthu@trade.gov
Phone: (965) 2259-1456


Lebanon
Capital: Beirut
GDP*: 35 billion (2009)
Currency: Lebanese pound
Language: Arabic

Summary
Lebanese Automotive Sector
Overview

2007 2008 2009 (to Oct 31)
Total Market Size 929 1,638 1,528
Total Local Production 0 0 0
Total Exports 29 49 80
Total Imports 958 1,687 1,608
Imports from the U.S. 155 279 248
Figures are in millions of dollars and based on Lebanese Customs statistics – Section 17 / Chapter 87

The Lebanese market of approximately 1.7 million vehicles witnessed an increase of 12 percent in 2009
compared to 2008, with a total import value of $1,608 million. This growth is mainly attributed to the weakness of
the dollar in relation to Euro. U.S. market share reached 16 percent in 2009.

Market Entry
The Lebanese Car Importers Association co-organizes the Motor Show, a bi-annual trade fair for the automotive
industry in Lebanon. The Motor Show presents significant opportunities for U.S. companies to introduce their
products and services to the Lebanese market.

Current Demand
Demand for Sport Utility Vehicles (SUVs) in Lebanon has been growing.
According to private sector sources, around 10 percent of cars imported
into Lebanon are SUVs. This percentage is expected to increase due to
their heavy duty performance and poor road conditions throughout the
country. Lebanese prefer American SUVs over other SUVs because of
their competitive price, high quality, and long record of success in the
market. Moreover, demand for U.S. automotive products such as brakes,
clutches, engine lubricants, and safety accessories are increasing
because they have demonstrated quality advantage over foreign
competitors.

Trade Events

Lebanon Motor Show 2009

Name: Naaman Tayyar
Email: Naaman.Tayyar@trade.gov
Phone: +961-4-544860


Malaysia
Capital: Kuala Lumpur
GDP*: $227 billion (2009 figures)
Currency: Ringgit
Language: Malay

Summary
There is almost no bilateral trade in automobiles between U.S. and Malaysia. The U.S. exports effectively zero
cars to Malaysia, and it also imports zero cars from Malaysia.. The total industry volume (TIV) of motor vehicles
sold in Malaysia for the year 2009 registered 536,905 units against 548,115 units registered in 2008 a slight dip
due to the global recession. However, the Malaysian Automotive Association (MAA) has forecasted its 2010 total
industry volume (TIV) at 570,000 units based on sales performance of 301,077 units until June 2010. Passenger
vehicle sales in 2009 totaled 486,342 units -- represents 91% share of the TIV in 2009.

U.S. investments in the Malaysian automotive industry are relatively small. Ford had a joint venture plant in
Malaysia that assembled Ford cars and also other makes such as BMW and Mazda. However, Ford has recently
sold the entire equity to its local partner. Delphi Automotive Systems and TRW Automotive have a plant each in
Malaysia. Delphi manufactures wire harness, and TRW manufactures steering gear and suspension parts. Ford
Malaysia has been selling a few thousand (annually) Ford motor vehicles (CBUs from Philippines, and CKD
packs from Japan and Thailand) in Malaysia in the last few years. Hicomobil Sdn Bhd, which imports and
distributes Chevrolet cars, has been selling a few thousand (annually) CBUs of Chevrolets imported from
Thailand and South Korea in the last few years.

Market Entry
Local manufacturers Proton (established in 1983 and produced its first car in 1985) and Perodua (established in
1993 and produced its first car in 1994) have dominated the Malaysian car market for more than 10 years.
Currently, the two companies, along with foreign makers that assemble their vehicles here, account for 90
percent of the cars sold in Malaysia. Besides Proton and Perodua, national cars currently also include Naza
group’s Naza Ria and Naza Citra and Inokom’s Atos.

Main Competitors
Malaysia is the only country in Southeast Asia producing its own cars, but its policy of protecting the national
carmakers (Proton and Perodua) has discouraged foreign car manufacturers to set up plants in the country.
However, as stated in the National Automotive Policy (unveiled in March 2006), the Malaysian government wants
the local car industry to have two strong national car-makers in Proton and Perodua, complemented by a number
of foreign vehicle manufacturers (potentially with local joint-venture partners) who would upscale their assembly
operations and at the same time rationalize the models assembled, to drive sustainable industry linkage.

Current Demand
There are opportunities for U.S. companies with technology and expertise to help local manufacturers Proton and
Perodua to upscale their assembly operations and rationalize the models assembled.

Market Research

No current research available


Name: Randall Liew
Email: randall.liew@trade.gov
Phone: +60 (3) 2168 4825


Mexico
Capital: Mexico D.F. (Mexico City)
Population: 105 million (2008 estimate)
GDP*: US$ Billion: 190.7 (2007 estimate)
Currency: Pesos
Language: Spanish

Summary
Between 2006 and 2007, the Mexican auto parts industry and vehicle production and assembly reached record
production levels even after signs of economic slowdown in the principal export market in the United States.


As a result of new investments in their assembly lines and the launching of innovative vehicle platforms, Ford,
Volkswagen, and Nissan significantly increased their production. General Motors announced that they will start
operations of their new plant in the city of San Luis Potosi in the month of April with a production of 30
automobiles per hour and could be increased to 60 units per hour by the end of 2008.
The city of Aguascalientes will be the headquarters of a plant to be built by European investors to produce hybrid
and fully electric ecological cars for the Mexican and U.S. markets. This provides an extraordinary opportunity for
further growth for U.S. first and second tier suppliers, and especially for providers of raw materials, technological
advancement, parts, machinery, and consumable supplies.
In the production of new automotive parts, assembly plants are now requiring that their suppliers be as close as
possible to them in order to reduce inventory volumes and to facilitate just-in-time delivery during the assembly
process. This shift in production areas has forced many U.S. first- and second-tier suppliers to move to these new
areas so that they can produce at lower costs, reduce freight and handling expenses, and deliver parts and
components very quickly in a JIT program.
This trend opens a new field of opportunity to U.S. suppliers of production machinery and equipment, materials,
pre-assembled components, molds and tooling, cutting tools and chemicals, automation process equipment, raw
materials, engineering and design, and in many cases, finished parts and accessories sold through local
representatives or distributors.

Market Entry

On August 25, 2005, the Mexican government began allowing the importation of used vehicles into Mexico for
use by the importer. The move came four years ahead of the 2009 date originally agreed upon under NAFTA,
However, the imports of used vehicles are subject to a new decree, which became effective in February 2008.
For more details on the contents of the decree, NAFTA and other regulations related to the imports of used cars
into Mexico, please contact Ernesto de Keratry. These new regulations opened a tremendous amount of
opportunities for U.S. auto parts manufacturers and distributors to enter the Mexican market.

Current Demand
Best Prospects
The replacement market for standard auto parts will remain in place so long as vehicles continue to be sold;
therefore, many of such products remain best prospects for exporters to Mexico. Yet overall, the more
technologically advanced and value-enhancing products will prevail as the Mexican economy continues to
strengthen in its current fashion. Due to these changing consumer preferences and the position in which a high
cost, capital intensive producer, like the U.S., is placed, the best prospects for U.S. exporters of auto parts to the
Mexican market are as follows (listed alphabetically):
Air conditioning parts and accessories: In the first quarter of 2007, Mexico imported 87.2% more automotive air
conditioning parts and accessories compared to the same quarter in 2006. The U.S. posted a 117.8% increase in
export sales to Mexico in the same time period. A similar pattern has been seen in each of the last three years.
Due to this unprecedented growth, air conditioning parts and accessories appear to be an US$85 million a year
industry for 2007.


Brake systems: This is an US$867.5 million import market. In 2006, nearly 22% of these imports came in the form
of disk brake systems, an example of a more sophisticated product within this genre. The United States provides
69.2% of Mexico’s imported disc brakes, of which Mexico imported 15% more last year.

Engine replacement parts (rings, pistons, carburetor parts, fuel injection, etc.): This ever-needed and reliable
sector creates demand for its parts that corresponds with the demand of vehicles. So long as consumers continue
to buy cars, these products will remain integral to the auto parts & supplies industry. Last year, the driving force
behind these replacement parts – larger piston engines – created export sales to Mexico from foreign countries
worth over US$1.34 billion, 74% of which came from U.S. exporters (an 87.4% annual increase). This indicates a
tremendous, growing market that continually needs maintenance. In addition to engine parts, both replacement
and original input products for electrical systems and transmissions pose good opportunity for U.S. exporters.
GPS systems and accessories: With a similar logic to that of providing hybrid vehicle accessories, GPS
navigational equipment is an automotive item that will become commonplace in Mexico in the near future.
Fortunately for vendors, such systems and their accessories can be sold both pre and post market. All that
impedes growth is the lack of fuller navigational information technology. Once this information technology
becomes adequately gathered, one should expect to see these products in higher end car almost immediately.
Hybrid vehicle accessories/inputs: Mexico is following the same trend that the United States has set. According to
JD Power and Associates, hybrid vehicles will comprise 5% to 10% of the automobile market in the U.S. by
20158. Who is to say that Mexico would not follow suit? There is already a long waiting list to buy the Toyota Prius
in Mexico and both Honda and Ford have recently introduced hybrid alternatives to the Mexican market9.
Additionally, the Mexican government is offering incentives to definitive (versus temporary) importers – and, in
turn, to consumers – of hybrids. As of the fiscal year 2007, the tax applied to imported vehicles with combustion
engines, which is normally 2.6% of the automobile’s value, has been lowered to a mere 0.16% for hybrids9.
Polishing waxes & paintjob restoration: With a growing concern for cosmetic design of their automobiles,
Mexicans are more and more eager to purchase products and services that aesthetically improve their cars,
trucks and SUVs. Something as simple as maintaining a paintjob through the use of car wax has seen
remarkable returns. The U.S. only continues to increases its 94% share in the US$56.8 million a year import
market of polishing wax products. The product that enhances these cosmetics (i.e. paint, wax, etc.) and the
manner in which it maintains, restores or improves the look of a vehicle (i.e. the service) are both emergent
markets that warrant attention from exporters.
Rims and tires: Tireless wheels (more commonly known as rims) posted US$109.4 million in export sales to
Mexico in 2006, 65.75% of which came from the United States. Mexico imported nearly 20% more rims in 2006
than in 2005. In 2006, Mexico imported US$548.4 million worth of new motorcar tires. During 2006, the near 25%
export sales growth of tires from the U.S. coincided nicely with the entire Mexican import market’s 23% growth.
As with rims, American manufacturers benefit from the majority of these import sales transactions in Mexico.
Sophisticated alarm systems (e.g. vehicle tracking systems): Considering the 13% upsurge in vehicle thefts in
Mexico during the first quarter of 2007 (compared to the same period in 2006)9, consumers are increasingly
seeking out alarm systems that work more effectively than what is currently
available. Last year, 54% of the US$9 million in vehicle alarm systems that
Mexico imported arrived from the U.S. In this same time frame, this import
market grew 34.2% and U.S. exports to Mexico increased 47.8%.
Sound equipment: Radio receivers for vehicles (most often with CD or mp3
capabilities) alone generated US$361.6 million worth of exports from foreign
producers to Mexico. The U.S. sold US$227.7 million of these exports. Other
increasingly popular car audio equipment, such as woofers, amps and
speakers, are not included in this figure and they all pose great growth potential for firms supplying such
products.
Suspension systems: The U.S. maintains seven times the export sales to Mexico than its closest competition in
this category (Japan). The $36 million in suspension systems that Mexicans imported during 2006 is 91.4%
greater than the value imported throughout 2004. As suspension systems’ technical capabilities improve, so do
prospects of selling such products to the Mexican market.


Trade Shows
PAACE Automechanika
Centro Banamex, Mexico City
July 9 - 11, 2008
http://www.paaceautomechanika.com

Mexico: The Automotive Sector Misses the Growing Market of Auto Parts (2009)

Border Trade Initiative: Opportunities and Challenges. - Automotive Industry (2009)

Resources and Key Contacts

State of Jalisco Autoparts Distributors Association: http://www.rujac.com
The National Association of the Manufacturers of Buses, Trucks and Tractor Trailers:
http://www.expotransporteanpact.com.mx
National Autoparts Industry Association: http://www.ina.com.mx
Mexican Association of Automobile Distributors: http://www.amda.org.mx
Mexican Association of Automotive Industries: http://www.amia.com.mx
National Association of Bus and Cargo Tucks Producers: http://www.anpact.com.mx
National Chamber of Cargo Transports: http://www.canacar.com.mx

Commercial Service Contact Information

Name: Monica Martinez
Email: Monica.Martinez@trade.gov
Phone: + 52-81-8343-4450, 8345-2120, ext. 496


Morocco
Capital: Rabat
Currency: Moroccan dirham
Language: Arabic

Summary
Morocco was generally not an attractive market for U.S. Automotive products. This is gradually changing with the
arrival of Renault Nissan, which is building a large production plant in Tangiers.

The Renault-Nissan Alliance is continuing to spread its global tire tracks as it signs an agreement for
manufacturing facilities in Morocco. The Franco-Japanese Alliance already has an assembly plant in Rosslyn,
South Africa, among other places, and this new agreement signals its intention to increase sales and output
dramatically in the next few years. Renault started building the complex earlier this year in Tangiers.

The manufacturing site is currently producing 30,000 vehicles per year and has the capacity to produce 400,000
vehicles per annum by 2010. A number of vehicle derivatives from Logan's B0 Platform and Nissan's LCVs will be
manufactured through the facility.

Current Demand
Renault-Nissan requires 60% to be sourced in Morocco as part of the Alliance's
local integration strategy. Local sourcing is targeted to increase to 80%. As it
stands, current Moroccan suppliers are unable to deliver all the required vehicle
part quality level. Therefore, Renault / Nissan is looking for Tier 1 and 2 suppliers
to expand their presence to Morocco. Tier 3 suppliers are encouraged to explore
JV or other types of business relationships with local suppliers. The first requests
for quotations are expected to be released shortly.


Name: Thanae Bennani
Email: Thanae.Bennani@trade.gov
Phone: + 212-22-26-45-50


The Netherlands
Capital: Amsterdam
GDP*: $629 billion
Currency: Euro
Language: Dutch

Summary
The Netherlands abides by strict policies environmental and safety standards. U.S. products taking these
measures into account will find ample opportunities on the Dutch Market, which is dominated by imports. With
more than 7.7 million passenger vehicles or 4.4 per capita (2009), the Netherlands is the seventh largest
automotive market in Europe and the Dutch are very receptive to U.S. products.

Dutch Motor Vehicle Sales 2008-2010

2010 (Jan – Sep) 2009 2008
Passenger vehicles 345,300 387,699 499,980
Light commercial vehicles 35,025 51,286 84,659
Trucks >3.5 tons 6,872 12,922 19,497
Motorcycles 10,399 14,319 15,391

Safety and environmental concerns drive many decisions behind mobility in The Netherlands. As such, the Dutch
government promotes the use of environment-friendly vehicles with tax breaks, subsidies and other incentives.
Technologies to reduce harmful emission enjoy positive attention.

There is a growing interest in electric vehicles, including passenger cars, trucks, busses, special vehicles and
motorbikes, which offer many “green” opportunities in the Netherlands. In fact, the purchase of green passenger
cars tripled in 2009 as compared to 2007. Sustainable mobility or the development of hybrid, economical and
clean freight vehicles is also high on the agenda. The government would like to have a sustainable fleet of
vehicles that use renewable fuels, and accordingly, is taking on the role of launching customer. Although the
government aims for one million electric passenger cars on the road by 2025, the national industry association
has a more conservative estimate of 400,000 vehicles.

In addition, the Dutch government aims for a broader national network of pumps for alternative fuels (natural gas,
bio-fuel, and eventually hydrogen). To realize this, it has allocated almost 3.6 million euros (or $4.8 million) in
subsidies to add new filling stations to accommodate green gas, ethanol (E85) and biodiesel (B30). The bulk of
the subsidy will be invested in 53 filling stations for green gas. It will also be necessary to conduct research into
the possibility of a so-called smart grid electricity network for plug-in hybrids and cars that run entirely on
electricity. A full description of Dutch government subsidies to support and promote electric mobility and its
required infrastructure is available in the market report listed below.

As The Netherlands becomes more densely populated and the roads more congested, transportation
by motorbikes and motor scooters are becoming increasingly popular in the Netherlands in all age groups. One
does not require a driver’s license, only a certificate. It is a practical, handy and affordable means of moving
quickly through congested traffic. Parking costs and availability is rarely an issue while use, maintenance and
acquisition costs are relative low. Top brands sold in 2009 include: Microcar, Ligier, Aixam, JDM, Mega,
Chaternet, Bellier, Casalini, and Crecav Spa. Electric motorbikes and motor scooters are gaining ground in the
Netherlands.

Last but not least, car customizing continues to be popular. The Dutch regulations on specialty equipment and
customized cars are a grey area. Authorities tend to be tolerant towards customized cars as long as vehicles do
not jeopardize the safety of others.


Market Entry
As a member of the European Union, both EU and national legislation apply.

Main Competitors
U.S. suppliers generally will face strong competition from European suppliers.

Current Demand
In a market where interest in car customizing continues to grow, opportunities
exist for U.S. manufacturers of high quality and price competitive audio
equipment (HS-852721910, HS-852721990); Alloy wheels (HS-870870500),
wooden trimmings (HS-442010190), seat covers (HS-630493000) and other
interior and exterior car accessories for European cars.

Customizing cars remains a hot trend. The following models are customized most
often in the Netherlands: Alfa Romeo, Audi, BMW, Chrysler, Citroën, Daewoo,
Fiat, Ford, Honda, Hyundai, Kia, Lexus, Mazda, Mercedes, Mini, Mitsubishi,
Nissan, Opel, Peugeot, Renault, Rover, Seat, Škoda, Smart, Subaru, Suzuki,
Toyota, Volkswagen and Volvo.

Alarm systems also continue to be a booming market. In the short term a dramatic increase is expected in the
use of computers, software, data storage on diskettes, in-car navigation, electronic maps (CD-ROM), infrared
blind-spot detectors, radar enhanced cruise control (HS-903289900), and head up display of speed/distance.

In addition, the aftermarket expects half of all maintenance and repair services to be of an electronic nature in
2011. A quarter of the universal garages will not be capable of performing the required work on cars older than
three years. The availability and accessibility to technical information is a major issue to the aftermarket. The
rate of technological advancement in passenger cars and trucks is expected to increase over the coming years,
making good accessibility to technical information, universal testing and diagnostic equipment, software, tools
and training a critical element to companies in the automotive industry.

Trade Shows
ReMaTec
June 19 - 21 2011
Venue: Amsterdam RAI
Type: Targets the International remanufacturing industry
URL: http://www.rematecnews.com


Assessment of Opportunities for Electric Vehicles, Parts and Systems in the Netherlands (2010)


Name: Natasha Keylard
Email: Natasha.Keylard@trade.gov
Phone: +31-70-3102417


New Zealand
Capital: Wellington
Population: 4.3 million people
GDP*: 128.500 billion
Currency: New Zealand Dollar
Language: English

Summary
Repair work and vehicle maintenance spur New Zealand’s aftermarket automotive parts and accessories sales.
For the year ending May 2009, automotive repair and services increased 3.1%. However, vehicle sales, auto
electrical sales, tire sales and smash repairs fell in demand. (Source: Statistics New Zealand) New Zealand’s
economy is in a recession.

With the exception of some local assembly of trucks, buses and kitset cars, New Zealand imports most of its
motor vehicles. The national fleet consists of approximately four million vehicles, of which approximately 2.8
million vehicles are passenger vehicles. (Source: Land Transport Safety Authority, June 30, 2007). New and
pre-used vehicles from Japan are a significant part of the national registered fleet.

New Zealand is a right-hand drive nation. New Zealanders drive on the left-hand side of the road -- the steering
wheel fits on the right-hand side of the vehicle. Petrol vehicles dominate the national fleet.

Fuel efficiency and safety features are important to local vehicle users. Inspections are annually undertaken on
on-road vehicles for safety compliance.

Improved environmental performance is intrinsic to New Zealand’s clean, green, international image. New
Zealand’s demand for environmentally friendly “green technologies” comes partly in response to New Zealand’s
commitment under the Kyoto Protocol to reduce greenhouse gas emissions. On September 10, 2008, the New
Zealand Government passed legislation to introduce The New Zealand Emissions Trading Scheme (NZ ETS),
which places a price on greenhouse gas emissions covering a range of sectors in the economy including
transport. The NZ ETS was originally scheduled to be phased-in between 2008 and 2013, but due to the
economic downturn the transition is under review. Putting a price on emissions will change investment and
consumption patterns, leading to greater investment in environmentally friendly technologies by the transport
sector.

Main Competitors
A combination of local component manufacturers and importers supply automotive parts and accessories for the
New Zealand market. Japan is the leading import source securing 20% market share in 2008, followed by
Australia (14% market share), China (13% market share) and the United States (12% market share). In 2008,
New Zealand’s imports of automotive parts and accessory totaled $565.3 million – an increase of 5.7% on the
previous year. (Source: Statistics New Zealand)

The domestic sector is a significant supplier of auto products. When the last motor assembly plant closed in New
Zealand in 1999, the automotive component industry developed export markets in order to remain profitable.
Automotive exports from New Zealand for the year ending December 2008 totaled $101 million. Approximately
half of New Zealand’s automotive exports depart for Australia. New Zealand’s core capability lies in the
manufacture of original equipment and spare parts.

Current Demand
New Zealand’s demand for automotive parts and accessories imports fell 31% between January and May 2009
reflecting challenges in the local vehicle industry. (Source: Statistics New Zealand) Economists suggest New
Zealand’s economy shows some signs of improvement. Repairs and maintenance will continue to spur demand
for the remainder of 2009.


Barriers
 The Land Transport Safety Authority offers information on vehicle standards through its website:
www.ltsa.govt.nz
 The majority of goods now imported into New Zealand are tariff-free. New Zealand Customs offers a working
tariff online: http://www.customs.govt.nz/library/working+tariff+of+new+zealand
 All goods imported into New Zealand are liable for a 12.5% Goods and Services Tax (GST).
 There are no importing licensing requirements.
 Products may comply under Consumer Guarantees Act, 1993 and Fair Trading Act, 1996

Trade Events
Name of event: Speed show 2009
Location: Auckland
English language website: www.speedshow.co.nz
Description: New Zealand’s premier automotive event with displays and
exhibits featuring all genres of motorsport and competition; the finest new
cars and performance models from some of the world’s greatest
manufacturers; motorcycles of every form – new, vintage, competitive and
street; and Speed show 4 Kids, a dedicated kids fun interactive area.

Commercial Services Contact Information
Name: Janet Coulthart
Email: Janet.Coulthart@trade.gov
Phone: 64 (4) 462-6002


Nigeria
Capital: Abuja
GDP*: $339 billion (2009 estimate)
Currency: Naira
Languages: English (national), Ibo, Yoruba and Hausa (ethnic)

Summary
The Nigerian market for cars and trucks has grown significantly in the past 20 years, averaging an estimated 10%
annually. In the car category, Japanese brands hold a major share reaching up to 60% while American brands
account for less than 5%. However, the United States generally controls the used car market with up to 60% of all
used car imports. Used truck imports are also a growing phenomenon with the United States significantly leading.
Used cars entering Nigeria must not be more than 5 years old except for trucks and buses which have no age
restrictions. The import tariff is for automobiles generally is 30%.

Market Entry

The best way for U.S. manufacturers and suppliers to penetrate the Nigerian market is to combine the benefits of
the network services and programs of U.S. Export Assistance Centers (USEACs,
http://www.export.gov/comm_svc/eac.html.) with the extensive knowledge, industry contacts and services of the
U.S. Commercial Service at the U.S. Consulate General in Lagos, Nigeria (http://www.buyusa.gov/nigeria).
Seeking the assistance of a USEAC before exploring an opportunity in this market is encouraged.

Nigeria is the largest market for used cars, trucks and spare parts in sub Saharan Africa. With an estimated per
capita GDP of just over $400, new cars are beyond the reach of a vast majority of the population. Low household
incomes have thus given rise to the demand for used automobiles. Imported used cars and used spare parts
popularly known as “Tokunbo”, have recorded significant sales since the 1980s. In 2009, for example, Tokunbo
cars accounted for about 80% of all used car import. Economic improvements, which Nigeria has recorded since
it returned to democracy in 1999, have slightly raised the purchasing power of especially the middle class so that
they can now afford new vehicles. However, demand for used automobiles, especially Japanese brands imported
from the United States, still remains high. Cars U.S. imported cars are considered to be well maintained, of good
quality, cheaper in terms of price and loaded with extra features like leather seats, air-conditioning, security and
navigational instruments, sound system and others. The long standing ban by the Nigerian government on the
importation of cars above five years old has not stopped, but has only encouraged smuggling of cars much older
than 5 years into Nigeria from bordering countries like Benin Republic and Togo.
The Nigerian trucking industry also shows a promising outlook. The collapse of the Nigerian rail system and the
increasing need to move goods nationwide has made road haulage indispensable. Transportation by road now
accounts for more than 80% of all haulage activities. This trend is expected to continue unless the effort of the
Nigerian government to rehabilitate the country’s ailing railway infrastructure begins to yield results. Demand for
trucks and accessories has risen significantly because shipping, warehousing and logistics, manufacturing and
petroleum products marketing companies in Nigeria now outsource their transport activities to haulage services
providers.. Nigeria is now a big export destination for new and used trucks and truck accessories, with used
trucks accounting for more than 70% of total demand. American brands, especially the Mack, are mostly
preferred because of their ruggedness and reliability.

Main Competitors
Major competitors to U.S. used car and truck imports include China and European countries like Germany and
Belgium.

Current Demands

Demand for used cars and parts is estimated to account for about 70% of total demand for new and used cars
while used trucks and parts are responsible for more than 60% of imports.


Barriers

Used cars that are more than 5 years old are not allowed into Nigeria. However, there are no age restrictions on
buses and trucks. All vehicles entering Nigeria must be left hand drive. Tariff on automobiles are as follows: cars
30%, buses 15% and trucks 30%.

Trade Events

Currently no trade events are scheduled.



U.S. Commercial Service Contact
Name: Chamberlain Eke
Email: chamberlain.eke@trade.gov
Phone: 234-1-4603400 ext. 3414


Pakistan
Capital: Islamabad
Population: 170 Millions
GDP*: US$ 162 billion
Currency: Rupee
Language: Urdu, English

Summary
Pakistan is a promising market for automobiles and accessories, offering exceptionally good sales opportunities
for U.S. exporters of used cars, busses and heavy trucks. During recent years, the country has seen drastic
changes in this sector because the local government has allowed the import of used/refurbished vehicles, and
has exempted buses in CKD (completely knocked down) condition from customs duty. The automotive industry
demonstrated a very impressive growth rate of 50 percent during the past fiscal year. A corresponding increase in
the number of banks and financial institutions willing to extend credit to the public has strengthened the
performance of this sector.

Pakistan has a growing market for automobiles and accessories (including tractors), offering exceptionally good
sales opportunities for U.S. exporters in the car, bus and heavy truck segments. The total number of vehicles in
Pakistan is over 5 million units. The annual demand is approximately 300,000 units with total imports worth USD
300 million. The local production of aftermarket automotive parts and accessories is around USD 850 million.
Four hundred manufacturers of automotive parts and accessories support 32 automobile manufacturing and
assembly facilities in Pakistan. Only five of these automobile manufacturers, produce/assemble buses and trucks.

The vehicle industry demonstrated a very impressive growth rate of over 50 percent during the past fiscal year,
mainly due to the increase in demand and the availability of consumer credit and low interest rate loans. The
Government of Pakistan (GOP) encourages local franchisees to introduce more buses on city routes by providing
4 percent loans for bus purchases. The government also gives 10 percent rebate of custom duties for the import
of public transport vehicles. The GOP has exempted buses in Completely Knocked Down (CKD) condition from
customs duty irrespective of whether they run on Compressed Natural Gas (CNG) or diesel fuel. The Small and
Medium Enterprises Development Authority (SMEDA) monitors the import, resale and transfer of vehicles
imported under this customs duty exemption. The general tariff regime is 20 percent on CKD buses and trucks;
60 percent on Completely Built Units (CBU) trucks and 20 percent on CBU buses.

Buses using Compressed Natural Gas (CNG) are particularly in demand, as the GOP applies the National
Environmental Quality Standards related to air, water, and noise pollution to the vehicle industry. Recently, the
government has made tremendous progress in promoting CNG usage by setting up filling stations, converting
petrol-run vehicles, and providing incentives to entrepreneurs.

As a result, more than 265,000 vehicles have already been converted to CNG and the clean fuel has gained
instant popularity. Pakistan has become the third largest CNG (for autos) user in the world after Argentina and
Brazil.

Market Entry
Manufacturers and assemblers of buses and trucks should consider entering this market. For U.S. companies
interested in selling automobiles in Pakistan, the best strategy is either to find a local partner to act as the sole
distributor/agent or to register and establish a representative office in Pakistan. Pakistan has a sophisticated and
regulated banking industry with both state-owned and private banks offering a full range of financial services
including trade financing
Additionally, incentives from the government that include zero duty on imported components used in the
manufacture of products for re-export and emphasis on the training and development of human resources has
paved the way for manufacturers to align themselves with their foreign counterpart and pursue joint
manufacturing and value addition.


Current Demand
The following list includes the products that demonstrate good sales prospects due to their increased market
size and demand.
HS Code Description
8704 Buses - Motor vehicles for transport of passengers
8705 Trucks - Motor vehicles for transport of goods
8706 Special purpose motor vehicles
9503100000 CNG conversion kits and CNG filling station equipment
8409914000 Parts for spark-ignition internal combustion piston engines for use in motor buses or
trucks
8409994000 Parts for compression-ignition internal combustion piston engines (diesel) for use in road

8708295070 tractors, motor buses, automobiles or trucks
8708390000 Parts and accessories, nesoi, of bodies (including cabs) of heading 8701 to 8705
8708401000 Brakes and servo-brakes and parts, of motor vehicles of headings 8701 to 8705

Trade Shows

MTAP 2010
6th International Machine Tools & Automation Exhibition Incorporating Automotive Technology
November 11–13, 2010
http://www.machinetoolpakistan.com/

AUTO ASIA
7th
International Exhibition
Automobile and Transport sectors
March 26-28, 2011
http://www.autoasia.com.pk


Market of Automobiles (Sep 2007)

Resources and Key Contacts
Pakistan Automobile Spare Parts Importers and Dealers' Association (PASPIDA)
Email: rshaikh@brain.net.pk; paspida@super.net.pk; paspida@hotmail.com; paspida@gem.net.pk
Web Site: http://paspida.com.pk ; http://www.freehomepages.com/paspida/private/MAIN.html
http://www.autopakistan.com/Supported%20by.swf

Pakistan Automotive Manufacturer Association(PAMA)
Email: pamauto@cyber.net.pk
Web Site: www.pama.org.pk

Pakistan Tyres Importers and Dealers Association
7/12 Rimpa Plaza, M.A. Jinnah Road
Karachi, Pakistan

Automobile Association of Pakistan
155, Chenab Block, Allama Iqbal Town
Lahore-54000, Pakistan
List of automobiles importers, dealers, manufacturers and association:
http://www.jamals.com.



Name: Malik Attiq
Email: Malik.Attiq@trade.gov
Phone: + 92-21-568-5170


Panama
Capital: Panama City
GDP*: 16 billion
Currency: US dollar
Language: Spanish

Summary
Around 600,000 vehicles presently circulate in the Republic of Panama, of which 70% are passenger vehicles,
22% are pick-up trucks and commercial work vehicles; buses and microbuses account for about 6% of the market
and other vehicles represent some 2%.

Sales of passenger vehicles to individual consumers and businesses, roughly at equal levels, account for most
transactions. Sales are expected to increase again this year spurred by growth in construction, tourism and canal
related activities, and nurtured by a relatively stable economy.

The traditionally open Panamanian market makes for a vehicle mix very different from other countries with a
preference for subcompact and compact passenger cars primarily operated in congested city driving conditions.
Deteriorating road and traffic conditions and the large influx in recent years of vehicles with more sophisticated
technology require higher quality and more sophisticated parts. The vehicle accident rate is at an all-time high
with an average of 100 collisions daily, which bodes well for body parts and collision repair equipment.

Market Entry
Price, service, brand awareness and quality are the principal factors influencing most local parts purchases. Parts
stores are usually located in several well-known “parts” streets that facilitate price and assortment comparison by
local consumers.

In general, automotive parts competition is intense with a broad range of quality and prices to choose from. A
major factor affecting competition is the one step distribution channel from importer/wholesaler direct to the end
user, practiced by the larger multi-store operators. Although the market has not yet reached saturation level,
several large importers have overstocks of fast moving parts and have further reduced prices to lower their
inventories.
Successful brands invest in seminars and product training, merchandising material, promotional campaigns and
catalogs in Spanish with vehicle applications and OEM cross-references. It is important to have catalogs updated
with the correct vehicle models and specifications sold in this market as they frequently differ from those in the
U.S. Efforts should be made to educate counter salespersons and end-users as to parts compatibility and usage;
e.g. many technicians will use Japanese spark plugs for Japanese and Korean cars, German plugs for European
cars and U.S. plugs for U.S. cars.
The import climate for automotive parts is positive. Import duties are reasonable and customs clearance is
relatively fast and straightforward. Panama has a dollar-based economy, good transportation infrastructure and
telecommunication systems, modern ports and excellent access to shipping and air transport.
U.S. products enjoy a high quality image and are well accepted. There are no regulations, technical or safety
standards for automotive parts.
Import duties on vehicle parts, in general, range from 5% to 15% of the CIF value. Ad valorem import duties are
levied on the CIF value plus a 5% value-added tax. This is a sample list of duty rates by parts category:


Main Competitors
New automobile imports by origin: Japanese 69%, Korean 17%, U.S. just under 6% and European 5%.
Toyota is the leading brand in sales with a total of 28% of the market; followed by Nissan 20% and Hyundai 11%,
with the makers capturing approximately 60% of the market. Competition is intense. Parts imports from the Far
East, especially Japan, Korea and Taiwan, account for 60% of total imports due to their low cost and the
predominance of Japanese and Korean cars in the market. Of that share, about 20% enter Panama via the Colon
Free Zone and inventories maintained to service a number of Latin American markets. Nevertheless, imports
from the U.S. continue to be significant at 35%, which include U.S. exports to both U.S. and foreign made parts,
due to quick delivery times, product assortment and diversity of suppliers, competitive freight costs and payment
conditions.

Current Demand
Trucks and heavy equipment will be needed for the Expansion of the Panama Canal Project; sales in this sector
are expected to increase in the coming years.

Sub-sectors offering the best market opportunities include servicing equipment,
passenger and light truck tires and tubes for heavier trucks, buses and equipment,
passenger vehicle body parts and collision repair equipment.

Good prospects for U.S. exports include engine parts, pumps, filters, batteries, ignition
parts, spark plugs, lamps, body parts, brake parts, shock absorbers, exhaust
components and used or remanufactured parts especially for buses, dump trucks and other commercial vehicles.

Name: Jeane A. Zuniga
Email: Jeane.Zuniga@trade.gov
Phone: +011 (507) 207-7392


Philippines
Capital: Manila
Population: 94 million (2010)
GDP: $161.196 billion (2009)
Per Capita: $1,747.8 (2009)
Currency: Philippine Peso
Language: Filipino (English also widely spoken)

Summary
The Philippine automotive industry exceeded expectations in 2009 posting over 6% growth at a time when most
foreign markets are still struggling. There were 132,444 new vehicles sold in 2009.

Table 1: Comparative 2009 and 2008
2009 2008 % change
Passenger vehicles 46,228 44,425 4.06%
Commercial vehicles 86,216 80,024 7.74%
Grand Total 132,444 124,449 6.42%
Source: Chamber of Automotive Manufacturers of the Philippines (CAMPI)

Motor vehicle sales data from the Chamber of Automotive Manufacturers of the Philippines (CAMPI) show brand
new vehicle sales increasing steadily since 1998, with 112,454 units sold from January to August 2010. This is
an impressive 37% growth from the 82,081 units sold during that same period in 2009. Moreover, industry
officials expect sales of new vehicles in 2010 to surpass the 1996 record of 162,095 units, spurred by overseas
Filipino worker remittances, aggressive financing packages, and increased general improvement in consumer
and business confidence.

Market Entry
Since 2002, the Philippine automotive industry has investments of about US$17 billion and employs close to
75,000 workers. Auto companies that have manufacturing facilities in the country include Ford, Toyota,
Mitsubishi, Honda, and Isuzu.

Ford Motor Company Philippines (FMCP) began vehicle assembly in the Philippines in 1999 with an initial
investment of US$200 million. They expanded in 2002 when it began exporting. In June 2007, Ford Philippines
launched production at a US$25 million Flex Fuel Vehicle (FFV) engine manufacturing facility. Ford
manufactures the Ford Focus (sedan), Ford Escape (SUV), and Mazda3 (sedan) in the Philippines. These are
exported to Indonesia, Thailand, Vietnam, and Malaysia. By the end of 2009, FMCP exported close to 65,000
units (since 2002) with an export value of more than US$800 million. Ford imports completely built units (CBUs)
of its SUVs from around the region.

The General Motors and Chrysler brands are available in the Philippines through exclusive distributors. General
Motors closed its Philippine office in 2009.

U.S. automotive aftermarket companies need to find local agents or distributors to help them penetrate the
market. The distributor or agent must be familiar with local regulations, have access to key customers, and have
the capability to provide after-sales support. It is also important to note that automotive lubricants and fuel
additives must secure the necessary permits from the Philippine Department of Environment and Natural
Resources (DENR) and the Department of Energy (DOE). Duties and tariffs apply to vehicle and aftermarket
product imports. More information is available from CS Manila.



Filipinos have a strong preference for commercial vehicles versus passenger cars. The Filipino differentiation
between a “passenger car” and a “commercial vehicle” is not based on usage, but on passenger capacity.
Passenger cars are typical four door sedans, anything larger is classified as commercial vehicles. Commercial
vehicles consist of vans, sports utility vehicles, trucks and buses. The Filipino’s primary consideration for vehicle
purchase is fuel cost, number of passengers, and parts availability. Average vehicle lifespan in the Philippines is
15 years. This explains the high demand for replacement and maintenance parts.

Main Competitors

Japan continues to dominate the motor vehicle market share. Based on the January to August 2010 sales,
Toyota remains the market leader with 32.5% of the motor vehicle market followed by Mitsubishi (18.9%), and
Korea’s Hyundai (12.2%). Hyundai has consistently increased its market share to overtake other Japanese
brands Honda (10.5%), Isuzu (6%) and Nissan (5.3%).

Ford has a 6% market share with 6,311 units, while the Covenant Car Company (GM’s distributor) sold 1,222
units (1.08% share) from January to August 2010. European brands, Mercedes, BMW, Porsche, and Volvo have
local distributors. Lexus opened its first Philippine dealership in 2009, while the Mini Cooper was launched in
2010. The Mini Cooper has surpassed sales projections of 130 units for the year. Countryman Mini SUV will be
introduced in the Philippines in 2011.

The United States is known for aftermarket products and automotive chemicals. However, more affordable and
accessible products from China and Thailand are gaining market share. The United States remains the leader in
the lubricant, additive, and car care market.

Current Demand

Motor vehicle sales are expected to continue its upward trajectory. 5% growth is projected for 2011. Aftermarket
products in high demand are suspension parts, shock absorbers, brake pads, spark plugs, transmission and
engine oils. Filipino car owners are expected to spend on the following automotive accessories: bull bars,
stepping boards, rear bars, carriers, and high end bulbs.

Barriers

Executive Order 156 of 2002 prohibits the entry of used vehicles into the country. Smuggled used vehicles have
been a major obstacle faced by the domestic automotive industry for the last decade. Smuggled cars (used or
luxury vehicles) impede the growth of the Philippine automotive manufacturing industry.

Continuing liberalization of trade and zero tariffs under the ASEAN Free Trade Agreement (AFTA) and the Japan
Philippine Economic Partnership Agreement (JPEPA) have made completely built up (CBU) importation more
competitive and attractive for auto manufacturers. Due to AFTA and JPEPA, Japan and ASEAN CBU imports are
now either zero tariff or reduced to only 5 percent. U.S. CBUs, however, remain at current “Most Favored Nation”
(MFN) rates of between 20 to 30 percent. This puts U.S. vehicle manufacturers at a grave disadvantage. Ford
has pointed out that this makes them uncompetitive in the local market.


Trade Events
Name of event: Transport Show 2011
Location: Mandaluyong City, Philippines
English language website: http://www.tradeshow.com.ph/transsportshow.html
Description: Featuring restored and vintage cars as well as customized contemporary cars. Aftermarket
exhibition with focus on styling and tuning products.

Name of event: Philippine International Motor Show (PIMS) 2012
Location: Pasay City, Philippines
English language website: http://www.campiauto.org/motorshow/
Description: Held every two years, the PIMS is considered the premier automotive exhibition in the Philippines.

Insert:


Name: Yna V. Capatayan
Email: yna.capatayan@trade.gov
Phone: (+63-2) 888-4088 ext 5821, 888-6620


Poland
Capital: Warsaw
GDP*: $678.8 billion (2009 est.)
Currency: Zloty (PLN)
Language: Polish

Summary
Poland is the sixths largest European automotive market after Germany, the U.K., Italy, France and Spain. The
number of vehicles registered in Poland more than doubled in twenty years - from 9 million in 1990 to 18 million in
2009 (16.5 million passenger cars). The number of passenger cars is likely to grow to 18 million by the year
2012. Experts estimate that the Polish car market is capable of absorbing approximately 500,000-600,000
passenger cars annually.

The car park in Poland is very old – only 5% of cars are 2 years old or younger, 6.7% are 3-5 years old, 18.5%
are 6-10 years old, 28% are 11-15 years old, 17.7% 16-20 years old.
Typically, Poles buy much smaller cars than Americans and tend to keep them longer. Diesel fuel engines are
popular in Poland - in 2009 there was 3.4 million diesel cars, 10.4 million gasoline cars and 2.3 million LPG
powered cars (0.4 million cars were unidentified). Unlike in the United States, cars are almost exclusively
equipped with manual gearboxes. The most popular brands of new cars sold in 2009 are: Skoda Octavia (5,74%
of the market), Skoda Fabia (4.52 %), Fiat Punto (3.29%), Volkswagen Golf (3.18%), Toyota Yaris (3.01%), Ford
Focus (2.83%), Kia Cee’d (2.74%), Fiat Panda (2.52%), Toyota Avensis (2.13%).

Poland is the tenth largest vehicle producer and the eighth largest passenger car producer in Europe. Every
seventh bus and every twentieth passenger car manufactured in the EU is made in Poland. In 2009 the number
of cars produced in Poland reached 899,737. The leading local producers are Fiat Auto Poland (605,797), Opel
Polska (96,697), FSO SA (59,695), and Volkswagen Poznan (55,950). There is also a noticeable production of
trucks (Volkswagen, MAN, Jelcz), buses and coaches (MAN, Volvo, Solaris, Scania, Autosan). 95% of the
vehicle production is exported. Poland has also attracted a number of significant foreign investors including
automotive parts producers like: Bosch, Denso, Delphi, Jonson Controls, Faurecia, TRW, Lear, Valeo, Visteon
and others.

Market Entry

U.S. exporters must comply with EU and national legislation. The duty rate for import of passenger cars to the
EU is 10%, the local Polish excise tax is 3.1% for cars less than or equal to 2 liter engine capacity and 18.6% for
cars greater than or equal to 2 liter engine capacity. VAT in Poland is 22%, but there are plans to increase it to
23% starting 2011. The duty for parts, service station equipment and accessories vary – check the rate on the
official page of the European Commission. There is no excise tax for parts and service equipment.

For companies interested in selling in Poland, the best strategy is either to find a local Polish partner to be a sole
distributor/agent or to register and establish a representative office in Poland. In any case, it is important to
maintain a very close business relationship with potential Polish buyers. It is highly recommended that U.S.
companies participate in appropriate trade fairs (like Automotive Aftermarket Industry Week held in Las Vegas,
each November, or Automechanika in Frankfurt every other September or the Essen Motor Show) and to
advertise in professional magazines.



The automotive parts market is dominated by multinational companies with global presence. Large U.S.
suppliers (Delphi, Johnson Controls, Lear, TRW, and others) are already present in Poland as car manufacturers
located in Poland encouraged their suppliers to move their production as close as possible. It would be very
difficult for US exporters to sell their products to OEMs. Supplying products as aftermarket parts might be easier.
US companies might want to present their offers to several large importers/distributors of parts (Inter Cars, Fota,
Hart, Polcar, Moto Profil, and others).

Import of used cars from the USA was increasingly popular in the years 2006-2008 (approx. 25,000 vehicles
imported annually). The situation changed in 2009, with depreciation of USD. Currently, only import of luxury
cars from the USA is still profitable.

The interest in car tuning and styling has grown over the last ten years. Many Poles consider the U.S. to be the
trend setter when it comes to styling and tuning their vehicles. The most popular car brands for styling and tuning
are European and Japanese models including: Renault (Megane, Clio), VW (Golf), Toyota (Corolla, Celica),
Honda (Prelude, Civic), Suzuki (Swift), Subaru, BMW, Citroen, and Nissan.

Styling and tuning products are imported by either small, specialized importers of such products or by large car
parts importers (styling and tuning products account for only 1% of their total turnover). Most of the companies
that specialize in the styling and tuning sector are small family firms with only a few employees. They usually
have an online shop since a significant portion of sales in this sector is done through the internet. There are also
a growing number of garages offering styling and tuning services.

There is also a significant interest in repair and diagnostic equipment for service stations. The demand for such
equipment is driven by Polish regulations requiring all automobiles to pass a technical inspection three years after
the initial date of sale. The next inspection is done after two more years and thereafter on annual basis. Another
important factor increasing the sales of automotive service equipment is the huge import of used cars, on average
aged 8 years or older. These cars often need urgent repair, some of them having been in crashes and imported
for repair in Poland.

Main Competitors

U.S. suppliers of parts and equipment generally will face strong competition from European suppliers for high
quality products and Asian suppliers for cheaper and lower quality products.

Current Demand
Aftermarket: Parts and Components
There is a significant potential market in Poland for U.S. made car parts. Especially for passenger cars with
European specifications, accessories, engine parts, body parts, and air conditioning systems.

Aftermarket: Mobile Electronics & Technology
There are opportunities in Poland for U.S. made audio equipment, amplifiers, radar sensors,navigation systems,
as well as high-tech alarms.

Resources

Polish Chamber of Automotive Industry
Website: http://www.pim.org.pl

Automotive market research Institute
Website: http://www.samar.pl

Association of Distributors of Automotive Parts
Website: http://www.sdcm.pl


Trade Events
Name of event: Poznan Automotive Meetings
Location: Poznan
English language website: http://www.motorshow.pl/en
Description: The Poznan Automotive Meetings is Poland's largest presentation of cars. The show includes also
family cars, luxury limousines and sport coupes, SUVs, special-purpose vehicles and campers as well as parts
and components, tuning and accessories.
Name of event: Automotive Technology Fair
Location: Poznan
English language website: http://www.motorshow.pl/en
Description: Exhibitors showcase a comprehensive range of equipment for car repair shops, vehicle testing
stations and car washes, along with spare parts and components, automotive electronics, car alarms and anti-
theft systems, supplies, car accessories, car maintenance and care products, as well as offers for tuning fans.

Poland: Automotive Repair and Maintenance Equipment (2008)


Name: Joanna Chomicka
Email: Joanna.Chomicka@trade.gov
Phone: +48 22 625 4374


Romania
Capital: Bucharest
Population: 22.3 million (July 2010)
GDP: $161.1 billion
Currency: RON
Language: Romanian
nd
2 languages: English, French

Summary

Romanian Motor Vehicle Market 2010
(Units sold)

Car (motor vehicles market) 2009 (January - July) 2010 (January - July)
A) Total Market Size 91,466 71,168
B) Total Local Production 176,206 219,656
C) Total Exports 149,348 194,523
D) Total Imports 64,608 46,035
The above statistics are unofficial estimates.

Romania’s car market registered the fourth largest decline in the EU at -32.2% in the January-August interval.
The number of new car registrations in the EU dropped 3.5% during the same period.
Romania registered 55,488 new cars in the first eight months of 2010, compared with 81,861 new registrations in
the same period the year before.

Production of vehicles in Romania increased through the first seven months, January-July 2010 by a quarter as
compared to the same period last year. According to APIA Romania (Automotive Manufacturers and Importers
Association) 219,656 vehicles were produced in Romania. Obviously, Dacia owned by French Renault, has the
biggest share with its 215,463 units. Ford was second in market share with its 4178 units. The statistics also
register the 15 trucks manufactured at Roman Brasov, a small number considering that at Dacia facility 40 cars
are being manufactured per hour.

Car production was one of the driving forces of Romania’s exports, 89% of all vehicles manufactured in the
Romanian facilities, ie 194,523 of the units being exported. Ford exported its entire production, the 4178 Ford
Transit Connect units, and Roman Brasov and Dacia exported 190,329 passenger cars and commercial vehicles.
Car exports rose 30% as compared to the period January-July 2009.

On the other hand, the Romanian car market continues its decline, as through the first seven months of 2010
car sales slumped by 26%. Dacia is still the best-selling brand, with 22,194 cars, followed by Ford (5841 cars),
Renault (5,300 units) and Skoda (4584 vehicles). Imports of vehicles decreased by 36%, to 6385 units in July,
and through the first seven months dropped by 28.7% to 46,035 cars. In the classification of imported cars by
models, Renault Clio is the leading model both in July and in the first seven months followed by Skoda Octavia
and Ford Fiesta.

Car ownership has increased significantly over the past three years, despite relatively low levels of disposable
income, to an estimated 167 cars per 1,000 people in 2010. According to the Global Insight Study, a total
9,021,703 cars were registered in the first eight months of the year across the European Union, except for Malta
and Cyprus, for which there was no available data.


Market Entry
U.S. exporters must comply with EU and national legislation when it concern type approvals of vehicles and parts.

The Romanian automotive industry has been one of the most profitable branches of the economy in recent years
and has been attracting increasing foreign investor interest. Opportunities in the automotive market have yet to
be fully exploited by companies already operating within the region, or still considering their entry into this
marketplace. Auto components manufacturing has moved out of mature economies into the strong growth
Romanian economy. Local production is mainly export oriented and serves many of the top car brands worldwide.

Current Demand
The auto components and accessories market has evolved spectacularly, mainly due to foreign investment made
in Romania in this sector. Global players are placing production in Romania and structuring their component
sales for both the internal market and also for export markets. Taking into account these considerations, we
could see as best prospects for the near future the following areas:

- manufacturing automotive spare parts & components;
- manufacturing or distribution of car accessories: GPS devices, anti radar systems, car security premium
systems, Hi-FI car audio devices (electronic and information device parts);
- establishing workshops (even in franchise system) especially designed for install the cars’ accessories.

Romanian Automotive Market (May 2009)

Name: Corina Gheorghisor
Email: Corina.Gheorghisor@trade.gov
Phone: +40-21-200-3397


Russia
Capital: Moscow
GDP*: $1.3 trillion
Currency: Russian Ruble
Language: Russian

Summary
The world economic crisis has seriously impacted the Russian automotive market which virtually collapsed in
2009 after several years of continuous and impressive growth. New car registrations dropped from over 3 million
vehicles in 2008 to 1.5 million in 2009. Dollar-denominated sales dropped even worse from $69 billion in 2008 to
$25 billion in 2009. The major reason for this slump was the financial crisis resulting into a loss of certainty in
future among middle class buyers, unwillingness of banks to finance sales of new cars at affordable rates and
30% devaluation of the local currency. The import of used cars in 2009 practically stopped because of prohibitive
import tax rates introduced by the Russian government. Subsequently, aftermarket sales also decreased
drastically.

In early 2010, the Russian government launched “cash for trash” program that offered $1,700 subsidy to those
owners that would like to replace a 10-year-and older vehicle by a new one manufactured in Russia. This
initiative was successful, and in 2010 the car sales started growing. The government plans to prolong the “cash
for trash” initiative for 2011 and extend it on trucks and buses.

The future of the Russian automotive market will depend on the global situation and the state of the Russian
economy. The ability of Russian consumers to spend for new cars is significantly dependent on oil and gas
prices and the wealth they generate. The optimistic scenario envisages that the market will reach 2008 levels in
2012, while the pessimistic outlook foresees surpassing 2008 results by 2015.

Market Entry
• Perform detailed market research to identify specific sector opportunities.
• Establish a local presence or select a local partner for effective marketing and sales distribution in Russia. Due
diligence is a must.
• Maintain a long-term timeframe to implement plans and achieve positive results.
• Use the experience of other, successful U.S. companies in the market. The local American Chamber of
Commerce has over 850 members and is a valuable resource.
• Be prepared to offer financing to Russian buyers. Both the U.S. Export-Import Bank
(Eximbank) and Overseas Private Insurance Corporation (OPIC) have programs to address
these needs.
• Be prepared also to establish a well thought out budget plan and include in the entry strategy
advertising, market promotion and regular visits to the major cities in Russia.

There are several projects underway to assemble foreign cars in Russia. Ford, GM, Toyota, Renault, Nissan,
Hyundai and VW own recently established SKD plants in Russia. Fiat, Kia and Ssang Yong plants are operated
by Russian companies under licensing agreements. Other foreign assembly projects in Russia include BMW,
Navistar/Inernational and bus projects by Scania and Volvo. The major obstacle to successful development of
foreign assembly projects in Russia is the lack of local component suppliers.

The market for car components and aftermarket replacement parts is likely to become stronger as car
ownership steadily increases and customers demand higher performance from domestically produced
cars. Russia represents a large potential market for the U.S. automotive industry. Currently, the rate
of car ownership in Russia is only 30% of the U.S. rate. The total Russian motor vehicle fleet is
estimated at over 40 million units, including 34 million cars.


In 2005 the government took the decision (166 Decree) to drastically decrease import taxes
for automotive components imported by OEMs under the condition to gradually achieve 30%
localization within seven years of operation. The government decision envisages that import taxes will
be either abolished (engines, power trains, exhaust systems, and body parts) or cut to as low as three
percent (starters and spark plugs) for components supplied to assembly projects. In 2006, the
Russian government modified the decree (566 decree) to allow tier-1 component manufacturers to
import tax-free components under the condition to achieve 30% localization within 40 months.

Main Competitors
The Russian aut o indu st r y represent s a m ajo r fo rce in t he do m est ic eco no m y b ecause o f high ly
co m pet it ive p ricing, b ut qualit y m ust im pr o ve if t he indust ry is t o m aint ain it s po sit io n. Ru ssian veh icle
assem b ly and co m p o nent m an ufact ur ing fact o ries r em ain p lagued b y o ut dat ed equip m ent , a lack o f
m o dern t echn o lo gies and inadequat e m an agem ent . N o net heless, t he aut o m o t ive sect o r o f Russia’s
eco no m y is in b et t er sh ape t han m any o t her indu st ries. The m ajo r lo cal aut o m o t ive m ark et p layer s
inclu de: GAZ Gr o up, a su b sidiary o f Basic Elem ent , t he largest Ru ssian alu m inu m m anufact u rer; and
So llers, a fo rm er su b sidiary o f t he lead ing Russian st eel pr o ducer Severst al, and Aut o VAZ
current ly co nt r o lled b y t he st at e o wned Ro svo o ruzhenie and m ino rit y-o wned b y Ren au lt . Tho se
co m pan ies are successfu lly rest ruct ur ing t heir aut o m o t ive asset s and invest ing in t he m o dernizat io n o f
t hese o ut dat ed facilit ies.

The aft er m ark et is qu it e co m pet it ive wit h part s, chem icals and car-care pr o duct s supp liers fr o m Eu ro pe
and Asia act ive in t he Russian m ar k et . Ent ering t he m ark et is an un easy t ask since ex ist ing lo cal
dist r ib ut o rs are n o t int erest ed in t ak ing r isk s o f invest ing in new b r ands an d ex pect su pplier s t o
sign ificant ly co nt rib ut e in m ar k et ing and b rand p ro m o t io n.

Current Demand

Engine and engine components, steering components, brake system components, powertrain components, tires,
interior components, new car dealerships. The best opportunities for U.S. firms are in
the establishment of local manufacturing facilities or the formation of joint ventures
with Russian firms and the supply of components to foreign vehicle assembly projects
in Russia or Tier-1 suppliers. International financing institutions, such as EBRD
(European Bank for Reconstruction and Development), are interested to provide
financing for automotive projects in Russia. Another good prospect is to supply
upgraded equipment and technology to Russian manufacturers. Opportunities also
exist in the licensing and transferring of modern technology to Russian component
manufacturers. Aftermarket sales of replacement parts and accessories are dynamic,
with high customer receptivity to U.S. products. Many U.S. brand names are very well
known and sold in Russia. There are no known trade barriers affecting imports of U.S.
automotive products; import tariffs are moderate.

Barriers
Import taxes on used cars have been recently increased to become prohibitive.

Trade Events
Name of event: Moscow International Motor Show
Location: Moscow
English language website: www.mims.ru
Description: MIMS is the largest and best-known trade show in Russia devoted to the automotive industry. It is
organized by the British company ITE.

Russian Aut o m o t ive Indu st ry ( Aug 2 0 1 0 )
Co unt ry Co m m ercial Gu ide 2 0 1 0 – Aut o m o t ive Indust ry


Name: Alexander Kansky
Email: alexander.kansky@trade.gov
Phone: +7-812-326-2581


Singapore
Capital: Singapore
Population: 5,076,700 (2010)
GDP*: US$182.233 billion (2009)
Currency: Singapore dollar
Language: English, Malay, Mandarin, Tamil

Summary
The projected growth of the car population is optimistic and there is little doubt that the demand for automotive
parts and accessories will increase. The total number of motor vehicles on Singapore roads has been increasing
over the past three years on an average annual rate of 4.25%. This growth pattern is anticipated to remain
unchanged for the next three to five years. These developments certainly bode well for U.S. business for the
foreseeable future.
New Motor Vehicle Sales (in units)
2007 2008 2009
Cars & Station-Wagons 505,987 540,455 566,608
Rental Cars 11,054 12,391 12,763
Taxis 24,446 24,300 24,702
Buses 14,530 15,327 16,023
Goods & Other Vehicles 150,979 156,089 158,207
Motorcycles & Scooters 144,340 146,120 147,215
Total Motor Vehicles 851,336 894,682 925,518

Source: Land Transport Authority, Singapore

Singapore’s market offers opportunities in the automotive components sector, which continues to grow. Recent
investments reflect the importance of Singapore as a major manufacturing base, especially for the production of
higher value-added engineering systems. Many leading multinational corporations (MNCs) have set up
international procurement offices to source high-quality and competitively-priced automotive parts. They have
established their operational headquarters in Singapore to coordinate their manufacturing and distribution
operations for the region.
After reaching ten years of age, cars must be scrapped or face hefty road taxes. Those owners who get rid of
their cars are entitled to receive a lump-sum benefit under the "Preferential Additional Registration Fee (PARF)"
plan introduced in 1975. The sum, determined by engine capacity, may be used to offset the registration fee of a
new car, but it is not applicable to cars previously registered outside Singapore. Those who keep their cars more
than ten years must pay a surcharge on their road tax of between 10-50%.
As a result of this fairly high turnover there is very small market for remanufactured/reconditioned cars and auto
parts. There are very few reconditioned automotive parts and supplies dealers because new parts are preferred.
Since there is no domestic production of automobiles in Singapore, imports must meet total market demand.
The demand for accessories, car-care products, prestige items, and new spare parts is also high as vehicle
owners maintain their cars in top condition. Singapore also serves as the primary distribution center for
automotive products in Southeast Asia.

Market Entry
A common belief in Singapore was that automobiles with automatic gears were hard to service and maintain,
therefore, manual gear cars were the norm. This perception is slowly fading, as more new cars with automatic
transmissions are being sold. Companies looking to sell in Singapore should consider making their cars available
in both manual and automatic gears. Another hindrance to selling American cars in Singapore is the reluctance of
American car companies to produce right-hand drive cars. U.S.-built vehicles are admired for their design and
user benefits. Interest in multi-purpose vehicles (MPV) runs high. On the whole, the MPV market is expanding
faster than any other segment. American manufacturers who are willing to design their cars in the right-hand drive
mode would have better sales prospects in Singapore than those who don’t. GM is the first American automobile


producer to launch its seven-seater Opel Zafira in the Singapore market. Needless to say, there is room for more
American involvement in this marketplace. In view of the competitive nature of the local business environment,
any American company that is just starting to develop the local market is recommended to appoint a local
representative. Once business has matured, the establishment of a representative office might then be desirable
to exploit regional potential.

Main Competitors
The automobile market in Singapore is highly competitive, though the Japanese manufacturers dominate car
sales. Statistics released by the LTA showed a 4.8% growth in the car market for 2009. Toyota (which sold
161,074 units last year) maintained its lead as the best selling motorcar brand in 2009. Honda, with sales of
90,861 units last year, was second, followed by Nissan, Hyundai and Mitsubishi. In terms of market share in
Singapore, Toyota had a 27.8% share last year, while Honda had a 15.68% market share.
Parts come from neighboring countries such as Malaysia, Thailand, Taiwan, China and India. Singapore also
affords easy access for original equipment parts from Japan, the U.S. and EU and ensures fast delivery time of
replacement parts.
An analysis of recent LTA figures clearly shows that only 15 out of the 60 mainstream makes suffered lower sales
last year. Those with fall in sales included Nissan, Mazda, Ford, Renault, Opel, SAAB, Alfa Romeo, Daewoo,
Rover, Wuling, M.G., Naza, Daimler, Isuzu, and Morgan. The LTA figures also showed that all other brands
posted gains. The most significant growth included those posted by Toyota, Honda, Nissan, Mercedes, and
Chevrolet. Observers are optimistic that 2010 will end with more winners than losers because of the lower COE
prices and a better economy in Singapore.
Parallel importing remains a visible trend in the local automobile industry. Traditionally, parallel importers only
sold Mercedes-Benz because of the demand and the profit margin. Parallel importers have increased their
presence here, boosted largely by the availability of excess stock in Japan. According to estimates, the makes
offered by these importers included Toyota, Nissan, Mitsubishi, Honda and Mercedes-Benz. Trade observers said
the lackluster Tokyo economy gave rise to a ready supply of cars, thus contributing to the influx of Japanese grey
imports here. These are priced lower than the local distributor's prices. This is possible because these parallel
importers invest next to nothing on after-sales service, infrastructure or warranties.

Current Demand
When considering auto parts, one must remember that Singapore's focus is on the production of high technology
and low labor-intensive parts. Singapore has positioned itself as the regional center for the manufacture and
design of high-tech auto components for the OEM and the replacement parts market. Singapore firms engage a
wide range of sophisticated manufacturing technology, such as in-process x-ray inspection, vision control
assembly machines and hybrid technology. A broad variety of automotive components are being produced. They
are: electronic sub-assembly (like ignition control modules and pressure sensors), engine parts (such as gaskets
and oil seals), compressor parts and automotive audio systems, and transmission components (such as universal
joint kits). There is also great interest in advanced propulsion system and exotic metal research, particularly in
view of the “green” movement initiated by the Government to reduce carbon pollution.

Barriers
The greatest obstacle for U.S. automobile imports is all vehicles are right hand drive which includes: Ford Taurus,
DaimlerChrysler’s Cherokee, General Motor’s Opel, and to a lesser extent, Cadillac.

Trade Events
Singapore Motor Show 2011 http://www.motorshow.com.sg
Sept/Oct 2011
Type: The Singapore Motor Show is staged biennially. It is a marketing showcase for manufacturers and
distributors of passenger vehicles covering concept cars, convertibles, exotic cars, hot hatches, performance
cars, saloons, sport cars, and super luxury sedans. The exhibit profile also incorporates the full range of
commercial vehicles as well as OEM parts, workshop equipment, accessories and aftermarket products.
P.S. The website for the 2011 motor show has yet to be done. Hence, the attached 2008 website is meant as a
guide. The actual dates for the staging of the 2011 show will be finalized in due course.


Name: Haw Cheng Ng
Email: HawCheng.Ng@trade.gov
Phone: (65) 6476-9037


Slovakia
Capital: Bratislava
1
GDP : $78.3 million
Real GDP growth: -2.60
Currency: Euro
Language: Slovak

Summary
Although the car plants in Slovakia have the capacity to build more than 800,000 cars annually, production
dropped to 459,756 units in 2009 due to the worldwide economic recession.

In 2009 there were over 120 Tier 1 and Tier 2 auto suppliers in Slovakia (30% less compared to 2008), providing
parts and subassemblies to clients throughout Europe and beyond.

The financial crisis and recession have hit the Slovak automotive industry strongly. Car exports, especially to the
United States., dropped dramatically and the three local car makers were forced to temporarily shut down their
third shift of operations or introduce a four-day working week. The industry has recovered somewhat since a car-
scraping bonus was implemented by the Slovak Government in early 2009. All three car producers are back to
working shifts.

Market Entry
Excellent opportunities exist for U.S. automotive suppliers interested in selling parts to local auto plants, the
automotive aftermarket, as well as to companies experienced in education /training and R&D/test production
activities.

Slovakia has difficulty in finding experienced electronic and technical engineers, technologists, designers, quality
controllers, logisticians, purchasers and maintenance people who speak at least one foreign language.
Specialists for IT and managerial positions are in highest demand.

The development of applied R&D is essential for the automotive industry. In Slovakia there is excellent potential
for penetration into the R&D activities of the large automobile corporations in specific segments. Integration of
Slovak research workstations into R&D of cars, development of components, aggregates, technologies for car
production and car assembly must be consistent.

Finding a good local partner is the key to successful entry into the Slovak market. The quickest way is to find a
local distributor with an existing distribution network ready to expand his existing product portfolio with a new U.S.
product. Local partners have unique knowledge of native culture and language, market nuances and price policy
of the Slovak market. In most cases one distributor provides coverage throughout the entire country and in some
cases reaches out to neighboring countries, particularly the Czech Republic.

Larger U.S. firms might want to consider establishing joint venture manufacturing facilities in Slovakia to provide
high quality products Just-In-Time (JIT).
The U.S. Commercial Service at the U.S. Embassy in Bratislava strongly recommends building person-to-person
relationships in the Slovak market. We will gladly assist you through many of our services such as the Gold Key
Service or International Partner Search. Executives may wish to combine their first visit to Central Eastern Europe
with introductory visits to other nearby countries. Please contact us for more information.


Current Market Trends / Current Demand

An approximate allocation by manufacturer is:
PSA Slovakia in Trnava (Models: Peugeot 207, Peugeot 207 van), production up to 500,000 units; (203,732 units
produced in 2009. PSA ranked No.1 car producer in 2009 when it produced 17,000cars more than in 2008.)

KIA Motors Slovakia in Zilina (Models: Hyundai Tucson, Kia ED, Kia CEED, Kia Sportage), production up to
300,000 units (150,020 units produced in 2009.) VW Slovakia in Bratislava (Models: Audi Q7, Touareg and
Porsche Cayenne body), production up to 300,000 units; (105,997units produced in 2009)

Barriers
There are no trade restrictions on imports of cars and automotive components from the United States other than
import duties. However, U.S. imports face strong competition from imports from the other European Union (EU)
countries since automotive components produced in the EU can be imported into the Slovak Republic duty-free.
Non-EU automotive components carry a duty rate of 10%.

American exporters must be aware that each new type of imported product is subject to certification for quality
and safety in conformity with the relevant EU regulations. The certification process requires that a sample from
the planned import batch of the product be tested and approved by a notified body anywhere in the EU.

Trade Events
Autosalon, Autoservis, Motocykel - held in Bratislava around March

Autocee Conference – usually takes place in May or June in Bratislava

Autosalon in Nitra - usually takes place in September or October

There is also Autosalon in Bratislava:
http://www.incheba.sk/exhibitions/Exhibition_Motorshow_2011/3018?lang=en,
(usually includes international fair of plastics and composites for the automotive
industry)



Name: Lucia Maskova
Email: lucia.maskova@trade.gov
Phone: +421 2 5920 5317


South Africa
Capital: Pretoria
GDP Per Capita:$5,787 (2009)
Currency: Rand
Language: English

Summary

There has been a rapid growth in demand for automotive specialty equipment and accessories in South Africa.
This growth can be attributed to the higher disposable income within specific segments of the South African
population. Since 2001 the activity of accessorizing and improving performance of vehicles has transformed from
a hobby to a fully-fledged culture of fierce competition. In the race to individualize and distinguish their vehicles
from others, enthusiasts constantly seek innovative, authentic specialty components with little regard to price. In
this lucrative sector, South Africans often follow trends set in the United States and are highly receptive to U.S.
brands.

Market Demand and Overview

The combination of a growing new vehicle market, increasing vehicle population and
an emerging black middle class has led to a demand of specialty equipment, thus the
rapid increase of specialty auto centers, dyno-tuning centers and accessory importers
and retailers around South Africa. To satisfy the demands of enthusiasts, owners of
these establishments continually seek to import and establish distributor agreements
with foreign companies. Although there has been an influx of world-renowned brands
into the South African accessory, sound and performance market, there has also
been an influx of cheap alternatives imported from the East. Counterfeit and inferior
products are seen as a “very serious problem” in South Africa.
Interior and Exterior accessory products such as body styling kits; racing seats; alloy
wheels; lowering-suspension kits; graphics; steering wheels; gear and hand-brake pouches; boot spoilers and
wings; aluminum pedals; xenon light kits are retailed in most accessory outlets and auto-centers. Approximately
85% of these accessories are imported, mainly from Japan and China.
Leading sound brands such as Calibra, Star Sound, Sony Mobile, Pioneer, Alpine, Audio Bank, Kenwood, Kicker,
Blaster, Xplod, JBL, Clarion, Cerwin Vega and Earthquake are firmly established brands in the South African
audio sound market. There are monthly sound competitions in major South African cities, drawing participants
from all parts of the country. These competitions are well sponsored and supported by audio sound retailers and
installers.
The following performance products are sought after by dragsters in “the race to be the best”: intercoolers; ball
bearing turbos; octane boosters; gauges; racing bolts; performance water injection systems, high flow injectors;
racing clutches; metal head-gaskets; racing pistons; calipers and racing disk kits; high pressure fuel kits; gas flow
cylinder heads, dynanometers. Many international companies have seen the demand for high-end performance
products and have established local representation in the South Africa. These include: Seidl-Tuning; Lumma-
Tuning; Weitec suspension; Folia Tec; NOS; Arias Forged Racing Pistons; Turbonetics, Automotive Racing
Products (ARP); Clutch Masters; MSD Ignition and many others
Majority of the performance products are imported directly from the United States, United Kingdom, Italy and
Germany. However, these imports may not necessarily be purchased from the manufacturer and without any
exclusivity and/or distributor agreements. This scenario leads to “rogue distributors” and fierce competition
amongst wholesalers and smaller retail, customizing and performance shops. South African companies are
interested in acquiring U.S. distributorships, however, U.S. companies seldom reply to their inquiries or the U.S.
company’s minimum requirement to ship is too large for the South African importer. This leaves the South
African importers without much choice but to engage U.S. agents who consolidate and ship U.S. specialty
products that are purchased from third parties to them.


Market Data
South Africa’s main automotive trading partners (exports plus imports) for 2009 reflected the country’s global
linkages with the OEM parent companies in Germany, the USA and Japan. Germany comprised $5.72 billion or
28,4% of South Africa’s total automotive trade in 2009, followed by the USA with $2.73 billion or 13,5% and
Japan with $2.49 billion or 12,3% of total automotive trade.
Data relating specifically to specialty equipment (styling, sound and performance) is difficult to obtain, as there is
no formal association regulating this sector. The general consensus is: “Unknown, but nowhere near its full
potential”. Estimations are that the market size for specialty equipment is between $2.5 – 3 billion.
Performance Products: These include King Dragon, Snow Performance, NOS Octane Boosters, Razor, Seidl-
Tuning, Lumma-Tuning, Weitec suspension, Folia Tec, Jamex, Arias Forged Racing Pistons, Turbonetics,
Automotive Racing Products (ARP), Clutch Masters, MSD Ignition, K&N Filters, and Mickey Thompson Racing
Tires.
Audio Sound: Major audio sound manufacturers in South Africa are Calibra, Star Sound, Sony Mobile, Pioneer,
Alpine, Audio Bank, Kenwood, JVC, Audio Stream, Kicker, Blaster, Bronx, MTX Audio, Xplod, RockFordFosgate,
JBL, Clarion, Cerwin Vega, and Earthquake.
Accessory Products: These are mainly imported from China, Taiwan, and Italy, and include steering wheels,
pedal sets, alloy wheels and tires, racing seats, gear knobs, laser detectors, and other non OEM body fixtures
such as bumpers, grills and lowered suspension kits. Some of the well known accessory brands include Isotta,
Napier Racing, Jada Toys, Victor, Jammex, TSW, Smith Wheels, Momos, Tiger, and Altezza.

Market Entry

Many South African specialty equipment and accessory wholesalers and retailers are seeking to expand their
product range and welcome opportunities to establish distributor agreements with U.S. firms. The South African
Government does not have stringent laws prohibiting foreign/international automotive performance and accessory
commodities.

Market Issues and Obstacles

Items under Harmonized Code (HS Code) 89: Parts and Accessories of Motor Vehicle NES are subject to a 25-
30% import duty, with an additional fourteen percent for Value Added Tax (VAT) which can be reclaimed by the
importer.

Trade Events

Johannesburg International Motor Show (JIMS)
October 6-16, 2010
http://www.jims.co.za

Automechanika South Africa 2011
March 9-11, 2010
http://www.automechanikasa.co.za/


Name: Mr. Jaisvir Sewpaul
E-mail: Jaisvir.Sewpaul@trade.gov
Phone: +27 21 702 7379
Fax: +27 21 702 7402


Spain
Capital: Madrid
Population: 46.951 million (January 1, 2010)
GDP*: $1.051 trillion (January 1, estimate)
Currency: Euro
Language: Spanish

Summary
Passenger Vehicles
Spain is the third largest automobile manufacturer in the European Union (EU) (surpassed only by Germany and
France) and one of the seven largest automobile manufacturers in the world. More than three out of every four
passenger cars manufactured in Spain were exported in 2009. Additionally, the EU boasts the highest number of
vehicles per thousand inhabitants in the world. The outlook for the automotive sector in Spain is not as good as it
was in the past 8-10 years, and steady growth in consumption levels is not going to continue in the near future.

Motorcycle Market
In May 2009, approximately 270,000 motorcycles were registered in Spain.

Specialty Vehicles in Spain
There has been very little competition in the Spanish market as there have been very few companies that have
been fully dedicated to the adaptability of vehicles, but since the new European laws where enforced there have
been a great number of new companies dedicated exclusively to this matter or others that only dedicated part of
their work to this and have recently decided to have full dedication to the adaptation of all types of vehicles.

Hybrid Vehicle Components
Currently, automobile manufacturers are working on several projects to develop alternative propulsion systems,
some of them using derivates of petroleum as diesel or bio-diesel, creating vehicles with electrical propulsion, and
generating electricity by diesel or natural gas engines or new hydrogen motors.
SUBSTITUTION OF TRADITIONAL COMBUSTIBLES

Year Bio- Natural gas Hydrogen Total
combustibles
2005 2 - - 2
2010 6 2 - 8
2015 7 5 2 14
2020 8 10 5 23
Source: Libro Blanco del transporte – Comisión CE

Aftermarket: Accessories and Custom Products & Parts and Components
Spanish visitors to the annual SEMA and AAPEX trade shows in Las Vegas has increased from only 8-10
companies in 2004 to over 160 companies participating in 2008 and then had a decline in 2009 as a result of the
economic crisis, to 50 companies. Spain has over 20 magazines devoted to tuning and aftermarket accessories
including, but not limited to, AutoMAX, Europneus, FLASH-tuning, GTI Mag, Maxi Tuning, and Tuners 100%
Lifestyle Magazine. The automotive repair and maintenance sector is expected to grow for the coming years as
a result of the current economic crisis which has fueled demand for parts and services to upkeep older vehicles in
lieu of purchasing new ones. The aging automobile fleet coupled with strict government inspections and
increased market competition should result in 10 to 15 percent market growth. Growing demand for U.S. imports
will also boost U.S. presence 10 percent in the next three years.

Spain: Economic Crisis presents opportunity for automotive repair and maintenance. Feb. 2009

Name: Carlos Perezmingez
Position: Senior International Trade Specialist
Email: Carlos.Perezmingez@trade.gov
Phone: +34 91308 1598


Sweden
Capital: Stockholm
Currency: Swedish krona
Language: Swedish

Summary
Sweden, with a population of about 9 million, had 4.3 million cars registered in 2009. This corresponds to one car
to every 2.2 people. The number of registered commercial vehicles was 528,000.

The motor vehicle industry plays a central role in the Swedish economy. The four Swedish automotive
manufacturers, including suppliers to the industry, employ about 140,000 people.

The total import of automotive parts and accessories (HS 87.08) was worth $3.6 billion in 2009. Major supplying
countries were Germany (29%), Belgium (13%) and the Poland (7%). US suppliers accounted for 2% percent of
the import market.

Market Entry

As a rule, the Swedish vehicle manufacturers prefer to deal directly with foreign suppliers rather than going
through agents.

As regards the aftermarket, it is more common to work through importers/agents or wholesalers. The products
are thereafter sold through dealers, car part stores, garages and gas stations. Mail order firms also play an
important part in the distribution system. About 60-70 percent of the sales got through authorized car dealers and
garages.

Generally, Sweden offers a good market for high-quality and technically sophisticated automotive products.
Good prospects exist for products within the safety and environment sectors. Swedes are very safety conscious
and the manufacturers are known to follow high safety standards.
Sweden is a global leader in renewable energy and alternative fuels use. The Swedish government has pledged
to cut CO2 emissions by 25 percent by the year 2020. In 2009, there were 81,130 new environmental vehicles
registered which is 38% of the total cars registered, up from 34,1%, 2008. Good prospects exist for products
within emission technology, alternative energy technology and telematics.
Other products that enjoy good prospects are products that relate to the Swedish climate. Examples are engine
heaters for the winter and roof boxes for skis. Extra lights are also popular, especially as it is very dark for 6
months of the year in Sweden. There is also a growing market for truck aftermarket equipment.
Good prospects exist for motorcycles. There are about 300,000 motorcycles on the roads, which can be
compared with 125,000 twelve years ago. The trend is for smarter, stronger - and more expensive motorcycles.
In 2009, Harley-Davidson sold 1,029 motorcycles and was the
third biggest supplier after Yamaha and Honda.
Another sector of interest is specialty vehicles. Customizing
cars is a hot trend. Many Swedes consider the United States.
to be a leading country when it comes to styling and tuning
their cars. The most popular cars for customizing are
European and Japanese models. The products, which
traditionally are most popular in the styling and tuning sector
are tires and wheels, lowering kits, and exhaust systems. The
trend is moving towards more visible products such as body
kits, spoilers and lighting equipment. Steering wheels, rims,
mirrors and decorations for the exterior of the car also sell well.
It is also popular to install impressive stereo equipment.


Classic U.S. cars and muscle cars are very popular in Sweden. The Swedish Federation of Historic Vehicle
Clubs has 156 registered member clubs with 95,000 members. They estimate that there are at least 250,000-
300,000 historic vehicle enthusiasts in Sweden.

Trade Events

“Automässan”Gothenburg, January 19 – 22, 2011 (triennial)
Phone: (46) 31 708 80 00
Number of exhibitors (2008): 263
Number of visitors (2008): 18,305
http://nemonet.swefair.se/templates/FlexiblePage____175170.aspx

“Lastbil 2012” – truck exhibition (biennial)
Jönköping, August 22 – 25, 2012
http://www.elmia.se/lastbil/

“Stockholm International Motor Show” (triennial)
Stockholm, April 9-17, 2011
www.bilsalongen.com
http://www.stockholmsmassan.se/Common/Category.aspx?id=1

Automotive Parts and Accessories (2009)
Hybrid and Alternative Fuel Vehicles (2009)


Name: Hakan Vidal
Email: hakan.vidal@trade.gov
Phone: +46-8-783349


Switzerland
Capital: Bern
Currency: Swiss Franc (Sfr.)
Languages: German, French, Italian and Romansch

Summary
The overall Swiss market demand for automotive parts, aftermarket products, accessories as well as specialty
equipment was valued at $1.12 billion in 2009. With Switzerland climbing out of recession, the overall economy
is expected to show growth of 2.7%, which will favorably impinge upon the automotive market. In the past few
years, U.S. exporters have garnered a small market share, registering $45 million in 2009. Germany, which
traditionally has had a strong stronghold in the market, captured the lion’s share with a total exceeding 47% of the
market, followed by France with 14% and Japan with 12%.

Market Entry

In order to retain their customer base, Swiss car dealerships and repair shops often grant their clients large
discounts, recently driving prices down to the lowest relative levels ever in Switzerland. Receptivity is fairly high
for U.S.-made parts, accessories, and specialty equipment, including audio equipment and emission testing
equipment. While most garage dealerships source their products from the U.S. supplier directly to eliminate the
intermediary, there is a pool of importers/distributors of parts, accessories and specialty equipment in
Switzerland. These companies maintain good relationships with the end-users of parts and components.

Products with a high degree of receptivity on the Swiss market include specialty equipment, specialty wheels,
specialty tires, in-car entertainment systems, styling products, garage equipment, diagnostics equipment, and
performance enhancing products.

Main Competitors
In 2009, U.S. exporters supplied $45 million of parts and accessories, representing a market share of less than
5% of the import market. An increased U.S. market share is contingent upon competitive prices since Swiss car
dealerships and importers are faced with thinner profit margins in a fiercely
competitive market environment. In addition to a string of small to mid-sized U.S.
companies, Tenneco, Federal Mogul and Cardone Industries are well established
in the Swiss market and are endeavoring to increase their market share. U.S.
suppliers of accessories sold to consumers are encouraged to adjust their pricing
schemes in order to remain competitive. U.S. exporters benefit from the favorable
U.S. dollar-Swiss franc exchange rate as Swiss importers and distributors of
automotive parts, accessories, and specialty equipment are looking at the U.S.
market to source their products. U.S. suppliers are encouraged to consider
penetrating the highly competitive and potentially lucrative Swiss market. However, they have to be prepared to
sell initially in smaller quantities with the potential to increase sales once established in the market.

U.S. exporters face stiff competition from European Union suppliers, particularly from Germany with a 47%
market share, Italy with 16%, France with 14% and the U.K. with 8%, as well as from Japan (12%). EU suppliers
benefit from proximity to the market and favorable duty rates. China is making big strides to break into the Swiss
market by offering low prices and, in some cases, substandard products.


Current Demand
The Swiss automotive market was liberalized on January1, 2005, giving consumers greater choice in buying new
automobiles as well as parts, accessories and specialty equipment. As predicted, with the liberalization, prices
have fallen and are more commensurate with prices in the European Union. U.S. automobiles captured a
meager 1.2% market share in 2009. Demand for U.S. automobiles is nonetheless expected to rise between 2009
and 2011 as a direct result of the liberalization of the parts and components distribution and the availability of
more U.S. and other foreign auto parts, which can now be incorporated into the distribution networks of dealers of
parts, accessories and specialty equipment. A greater U.S. automotive market share is bound to spur demand
for OEM, parts and accessories and specialty products. In spite of the recessionary climate, industry experts are
forecasting market demand to grow between 2-3% annually over the next two years.

Revenues generated by the overall Swiss automotive industry, including the sales of new and used automobiles,
utility/commercial vehicles, gasoline stations, repair and service facilities and providers of related services,
registered a total volume of $ 67 billion in 2009, reflecting the industry’s importance and might in the overall Swiss
economy. The overall car fleet in Switzerland is about 3.8 million automobiles and is expected to grow marginally
over the next two years as a result of higher retention rates of automobiles.

Barriers
Switzerland’s open and transparent market environment, affluence, central location in the heart of Europe, sound
economy, and highly developed industrial base are vital elements for U.S. exporters. Federal, cantonal (state)
and communal governments intervene as little as possible in the decisions of corporate management. The Swiss
import climate is favorable to imports of automobile parts, aftermarket products, equipment and accessories with
no major roadblocks.

The 1972 Free Trade Agreement between Switzerland and the European Community eliminated customs duties
and other trade restrictions for industrial and agricultural products. Free trade is, therefore, possible for about
90% of the trade in goods of Swiss or EU origin. This free trade is also applicable to the European Free Trade
Association (EFTA), of which Switzerland is a member. The majority of U.S. shipments of goods to Switzerland
are assessed a customs duty, which is tied to weight rather than value. Automotive parts and accessories
earmarked for the Swiss market are subject to the Value-Added-Tax (VAT), which at present is assessed at
7.6%. The VAT is assessed based upon the value of the imported commodities.

Automobile Crisis to Affect Swiss Automobile Industry (January 2009)


Name: Sandor Galambos
Email: sandor.galambos@trade.gov
Phone: +41 31 357 7244


Taiwan
Capital: Taipei
GDP*: $712 billion
Currency: New Taiwan dollars
Language: Mandarin Chinese (official), Taiwanese (Min), Hakka dialects

Summary
Taiwan's automotive sector in general is dominated by Japanese with a market share over 85%. Taiwan has a
relatively strong in the aftermarket sector. The market for U.S. automotive products is declining.

In light of this, no additional information is available for Taiwan. For questions, please contact the automotive
specialist below.


Name: Wendy Tien
Email: Wendy.Tien@trade.gov
Phone: +886-2-2720-1550 Ext 324


Thailand
Capital: Bangkok
Population: 67.2 Million (2010 estimate)
GDP: $269.6 billion (2009 estimate)
Currency: Baht
Language: Thai

Summary
As a regional assembly base for world vehicles manufacturers, Thailand presents significant automotive
opportunities that are forecasted to grow as the government plans to expand the industry to be one of the ten
largest manufacturers in the world. The eco-car, once called the ACES (Agile, Clean, Efficient, and Safe), has
been identified as a key product that will drive the industry towards its target of two million-unit assembly capacity
by 2010. Honda, Suzuki, Nissan, and Toyota are assemblers receiving promotion privileges under the eco-car
program. AutoAlliance, a Ford-Mazda joint venture, and Tata are also granted investment promotion privileges
for their investments in manufacturing of the Ford-Mazda B-car and the Tata pickup. These new investment plans
are expected to add 863,000 vehicle units to local production over the next couple of years.
Thailand’s vehicle assembly output is expected to reach 1.56 million units in 2010. Production of pickup trucks
accounts for 66% of the total production in the first eight month of 2010, and passenger cars for 33%. Exports
are forecasted at 800,000 units, with passenger cars making up for 230,000 units. Domestic sales are expected
to reach 750,000 units, making Thailand the largest market in Southeast Asia. Passenger car sales during the
first three quarters of this year totaled close to 50% share of the market which has traditionally been dominated
by 60% share of pickup trucks. Popularity of small passenger cars has gradually been on the rise in recent years
causing demand for passenger cars to grow at higher rate than that of pickup trucks.

Market Entry
American manufacturers interested in supplying to the auto industry in Thailand will need to develop their
relevance to the platforms selected for assembly in Thailand. Moreover, new-to-market manufacturers can
enhance their access to the assemblers and their supplier networks in Thailand by building upon their
relationships with them elsewhere.

The eco-car, with a 1,300 CC engine and maximum gas consumption of 5 liters per 100 km, meets Euro 4
emission standards and UNECE Reg 94 and Reg 95 passenger safety standards for front and side impact. This
is expected to drive the automotive industry in Thailand towards achieving the government’s goal of becoming
one of the ten largest auto manufacturing countries in the world by 2010.
Investment plans from Toyota, Honda, Suzuki and Nissan have already been approved for investment promotion
privileges under this new eco-car program. AutoAlliance also has a new investment plan for its Ford-Mazda B car
and Tata for its one-ton pickup. These new investment plans are expected to add 863,000 vehicle units to local
production over the next couple of years. New vehicle products and expansion of assembly capacity provide
increasing opportunities for parts manufacturing and all other supporting industries. High potential areas include
moulds and die casting, moulds for plastic injection, automotive electronic components, and alternative fuel
engine and component technologies.

Main Competitors
Japanese manufacturers dominate the market and have a combined market share of larger than 90%. The five
best selling brands are Toyota (40.5% share), Isuzu (19.5% share), Honda (14.7% share), Nissan (6.5% share),
Mazda (4.7% share) and Mitsubishi (4.7% share). They all have assembling operations in Thailand that
manufacture for both domestic and export markets. Ford/Mazda, General Motors, BENZ, BMW, Hino also have
local manufacturing facilities for both markets.
Toyota leads in both the one-ton pickup and passenger car segments, while Isuzu comes in second for the one-
ton pickup segment and Honda for the passenger car segment. Despite the majority of the vehicle market being
controlled by only a few manufacturers, Thailand continues to attract producers of well-known brands from
around the world. There are close to 40 makes available to Thai consumers.


Current Demand
This year, the industry projects a 24% decline in production, estimating an output of 1.1 million units. The
domestic market is expected to decline by 20% from 2008’s 615,720 units of 2008 to below half a million units
and exports are expected to decrease by as much as 27% to approximately 580,000 units. A sharper decline in
demand for vehicle imports from Thailand is forecasted in key destination markets in Asia, Central and South
America, and particularly Europe, due to the global economic recession. A less severe decline in Thailand’s
domestic market is forecasted as industry believes in Thailand’s strong economic
fundamentals and expects the market to pick up in the later- half of 2009.
Notably, Toyota has confirmed its plan to invest in the local assembling of the
Camry Hybrid and to further expand its CNG-powered vehicles this year. In fact,
some industry experts believe Thailand’s automotive industry could benefit due to
possible relocations of vehicles production from Japan to Thailand.

Barriers

Thailand’s automotive policies and regulations have traditionally promoted free competition and foreign
investment in local production. Incentives are given to global investment to promote establishment of the local
manufacturing industry. Meanwhile, tariff structures are designed to protect the local industry by imposing high
tariff rates on Completely Built Units (CBUs) and finished parts. Despite the tariff barriers structured to promote
growth in the local industry, other non-tariff barriers do not exist to hinder automotive imports.

Trade Events
Name of event: Motor Expo
Location: Bangkok, Thailand
English language website: www.motorexpo.com
Description: Consumer show for automobile and accessories with primary focus on end users market
Name of event: BANGKOK INTERNATIONAL MOTOR SHOW
Location: Bangkok, Thailand
English language website: http://www.bangkok-motorshow.com
Description: Consumer show for automobile and accessories with primary focus on end users market.

Thailand: Vehicle Manufacturing (2008)


Name: Wanwemol Charukultharvatch
Email: wcharuku@trade.gov
Phone: 662-205-5272


Turkey
Capital: Turkey
Population: 72,561,312 (as of December 31, 2009)
GDP*: $905.3 billion (2009)
Currency: Turkish Lira
Language: Turkish

Summary

Turkey’s position at the crossroads of Europe and Asia and Turkey’s Customs Union agreement with the EU
make it an ideal location to penetrate markets in Central Asia, the CIS and the Caucasus for automotive
manufacturers. Most international vehicle producers already have production in Turkey. Presently, there are 19
international vehicle producers in the Turkish market including; Ford, Toyota, Renault, Fiat, Chrysler, Opel,
Honda, Hyundai, Peugeot, MAN, Mercedes, Isuzu, Mitsubishi, through joint/venture partnerships with local firms,
direct investment, or license agreements.
The Turkish automotive parts/service equipment industry has expanded as Turkish automotive production and
imports have increased. Auto parts increased by 40 percent compared to the year before, making 2007 a record
year. As a result of this trend, automotive exports ranked first in total exports ahead of the traditional exports
such as textiles and apparel. Turkey produces spark plugs, carburetors, fuel injection systems, and several
transmission parts. This sector provides parts for new vehicles as well as the existing Turkish automobile fleet
that exceeds 10 million units. Of the locally produced parts industry, 90 percent either are used in the production
of vehicles that are exported or directly go to world part market.
Unfortunately, the automotive industry is one of the industries that has been affected by the global economic
crisis in Turkey. Neither the local market nor the export markets are sufficiently large to let the firms in the auto
industry work at full capacity.
Currently, the number of motorcycles per 1,000 persons in Turkey is much lower compared to other countries:
Turkey - 20, Bulgaria – 50, Greece – 80, Italy – 170. This clearly shows the potential of growth in the motorcycles
market in Turkey. American companies are encouraged to consider this young and growing market very closely.

Market Entry

American products compete with European products that maintain price advantages because of lower
transportation and logistics expenses, and zero customs duties. Turkey is also a member of the EU Customs
Union. In addition, American companies compete with cheap Asian products. In some segments of the industry,
such as automotive chemicals and lubricants, the easiest way for an American supplier to overcome the freight
disadvantage is to supply its products in bulk and have the products repackaged for retail in the local market.
They may also bring products in a concentrated form, add ingredients and then package them in Turkey. This is
how most American companies are successful in the market.
Major procurements are realized by private business. However, large fleets of vehicles owned by the
municipalities and the central government, also define the sector.
Suppliers’ agents play an essential role in marketing and sales. In fact, because of the complicated import
procedures, it is almost impossible to sell without a competent agent in the country. In Turkey,
agency/representation/distributor agreements are private contracts between agents and their foreign suppliers.
There are no unusual regulations, which govern commission rates, termination, etc. However, in the automotive
aftermarket sector, a commission rate of 5-10 percent is most common. Representatives provide pro forma
invoices to the importers, including their commission in the price, and expect the foreign supplier to reimburse the
commission amount to their account after the sale is realized.


Passenger Cars: Eighty four percent of the total vehicles market is in the A,B, and C segment, which have
smaller engines, and therefore lower taxes. Twenty six percent is in the D,E, and F segments with larger engine
sizes. The B segment has a 43 percent (stick with percent or make it % throughout) market share, the highest
among all segments. The highest demand is for sedan types with 53 percent and hatch backs follow with 34
percent. Fifty-three percent of the total passenger car market is made up of diesel vehicles. The market for diesel
engines is booming. Automatic transmission vehicles increased on a year to year basis by 15percent. Turkish
consumers have a special interest and respect for U.S. vehicles, especially SUVs.


Commercial Vehicles: Turkish consumers seek commercial vehicles with low fuel consumption and trucks that
are able to carry heavy payloads and tractor-trailer units. Large 1.5 ton pick-up trucks are among the best
prospects. More than one-third of the commercial vehicles market is sustained by imports. The market for
vehicles with carrying capacities below 3.5 tons is expanding. Opportunities exist for manufacturers of vans (50
percent of the market) and pick-up trucks (30 percent of the market).

Trucks and pick-ups: The seven sisters (no longer together)-Mercedes, Volvo, Scania, Iveco, Renault, DAF, and
MAN) dominate the imported truck market. Volvo, Scania, Renault and DAF strictly
import. The remaining companies manufacture domestically and import products.

Buses: DaimlerChrysler-Mercedes, MAN, BMC and TEMSA are the major bus
manufacturers and importers for the Turkish market. Though the domestic bus
market is sluggish, Turkey exports buses to Europe, Russia, the CIS and China.
Turkey’s BMC holds a 40 percent market share for municipal buses. The majority of
the sales in the motorcycles market are in the lower engine size, including scooters.
In the auto chemicals market, the semi-synthetic lubricants, which are used in diesel
engines and high-performance products, have had increased sales. The light
commercial vehicles market is also increasing in Turkey, and this increase results in
an increase of mineral and semi-synthetic lubricants used in such vehicles. Turkish
agents may help American exporters with the import and certification procedures, customs, and conducting
promotional campaigns.
Tires, brake linings, gearboxes, and clutches are the major imported items in the parts industry. Generally,
imported parts are used in supplying imported vehicles and to OEMs for vehicles to be exported, or, where there
is no local production, such as for CV drive shafts, catalytic converters and tapered roller bearings. Imports are
also found when production shortages occur. Examples include power steering hydraulic systems, bearings, and
v-belts. Parts, which need to be replaced frequently because of poorly maintained roads, heavy traffic, traffic
accidents, and poor fuel quality, can also be considered as "best prospects." Examples include: shock
absorbers, brakes, clutches, rings, filters, bumpers, lights, and signaling equipment.

Main Competitors

Turkish consumers have a special interest and respect for U.S. vehicles. The first vehicles in Turkey were
American in the 1950s. European vehicles started dominating the market later. Vehicles from Asian countries
are now available everywhere in Turkey. American vehicles, especially the SUVs, have a good reputation.
The main competitors in the automotive chemicals market in Turkey for U.S. suppliers are from the following
countries: Belgium: 40.1 percent, Germany: 32.9 percent, Italy: 7.8 percent, Netherlands: 6.9 percent, U.K.: 6.3
percent, and the rest by France, Switzerland, and Spain. Domestically manufactured and refined petroleum
products meet more than 85 percent of the market.

Current Demand

There is a wide variety of vehicle models available in Turkey. In addition to the large number of models
manufactured in Turkey, a significant large number of models are imported. Almost all the models from every
brand have a good market in Turkey. Number of Passenger Car sales: 369,819 units (2009) Number of Light
Commercial Vehicles sales: 187,307 units (2009). More than one-third of the truck and bus market is met by
imports. The market for vehicles with carrying capacities below 3.5 tons is expanding. Opportunities exist for
manufacturers of vans (50% of the market) and pick-up trucks (30% of the market).
Turkey has a promising motorcycle market and exceeded 13 million units. Currently, the number of brands
existing in the Turkish market reached 220, including BMW, Yamaha, Honda, Suzuki, Kawasaki, Triumph, KTM,
Harley, Vespa, Piaggio, Gilera, Derbi, Motoguzzi, Honda, Jinlun, Skyteam, Aeon, SYM, FYM, Suzuki, MV Agusta,
Cagiva, Husqvarna, and some Chinese ones.
All of the major international petroleum refiners are present in the Turkish auto chemicals and lubricants market.
Companies such as Castrol-BP, Shell, Exxon-Mobil, Texaco, Total, M-Oil are present and offer the full range of
motor oils, lubricants and fuel additives. Additionally, firms that are only involved in the lubricants business also
operate in the Turkish market, such as the Fuchs, a German company. Domestic production is met by several
large producers and 100 additional small to medium-sized companies involved in the car care market.


Barriers

The Turkish import regime prohibits the importation of remanufactured, rebuilt, used, reconditioned vehicles and
parts. Only the current year or the following year models/newly manufactured parts can be imported.

Trade Events

Name of event: Otomotiv 2009
Location: Istanbul
English language website: http://www.itf-otomotiv.com/content/en_index.asp
Description: The fair hosts around 500 exhibitors, of which a quarter are international exhibitors from Germany,
Poland, Czech Republic, Iran, Romania, Ukraine, Thailand, China and Taiwan, exhibiting a wide variety of
products from engine and parts, to transmission components, from brake systems and parts, to chassis
components and parts, from electrical equipments and lighting systems to security components. The visitor profile
of the show included vehicle manufacturers, importers and exporters, wholesalers, distributors and agencies, fuel
oil station executives, OEM manufacturers, procurement representatives, technicians and engineers.
Name of event: Automechanika Istanbul
Location: Istanbul
English language website: http://www.messefrankfurt.com.tr/index.php?page=155&lang=en
Description: This show is one of Eurasia’s major shows for the industry to approach major OEs, and Tier 1 and 2
suppliers. It is also a major show for aftermarket firms in Turkey, and also the markets of North Africa, Europe,
Middle East, Russia, Eastern Europe and the central Asia countries. The Show draws over 25,000 automotive
professionals from 72 different countries visiting the event.



Name: Berrin Erturk
Email: berrin.erturk@trade.gov
Phone: [90] (232) 441-2446


United Arab Emirates
Capital: Abu Dhabi
Currency: UAE Dirham
Language: Arabic

Summary
UAE has no domestic automotive manufacturing industry and therefore the vehicles are mainly imported either for
domestic use or re-export to other countries. The UAE vehicle market is about 1.4 million vehicles and it grows
annually, on average, by 10%.

Complimentary to the vehicle sector, there is an auto parts and components sector that has been growing
rapidly. It is estimated that about 65% of the auto parts and accessories, that have been imported, are re-
exported to other countries. They are among the top 10 re-export products of Dubai and have been growing
annually by about 20%. The main destinations of these re-exports are Middle East, Africa and East Europe.

The relatively high living standards in GCC countries, the rising oil prices, the booming economies and the
growing population are the driving forces behind the growth of the automotive sector in the UAE and the gulf
region. The developments in the region, such as the situation in Iraq, will have an influence on the re-exports of
motor vehicles from UAE.

However, policy measures are needed to counter the auto market spare parts and accessories counterfeit
products, which account for more than 30% of the market.

Market Entry
A new industrial under the Jebel Ali Free Zone Authority (JAFZA) is being set up in Dubai to house companies
dealing in vehicles and related service and spare parts. Dubai Auto Zone will consist of a free zone to attract
foreign direct investment, a specialized economic zone to cater to the GCC market and a retail zone to serve the
local market.

Main Competitors
The main sources of the market supply are Japan, Europe and the United States. Within the UAE, Dubai has
been taking the lead in the vehicle market, having 50% of the vehicles stock. The major players in the motor
vehicles manufacturing industry in UAE are Nissan, Toyota, Mitsubishi, Mercedes, BMW, Volkswagen, Jaguar,
Land Rover, Ford and General Motors. It is estimated that out of the 150,000 four-wheel drive vehicles that are
sold annually in the GCC countries, 70% is accounted for by UAE and Saudi Arabia.

Current Demand
Best Sales Prospects:
HS Codes Description
870839000 Anti-Braking Systems
870899600 Air Bags
870870500 Alloy Wheels
852500000 Antennas
340530000 Automotive body polish and cleaners
870800000 Brake hydraulic systems and parts
870810000 Bumpers, including bumper guards
852721000 Car Audio
841330000 Fuel Injection Pumps
871493000 Hubcaps
870894000 Hydraulic steering systems and parts
S51980000 Paints


630492200 Seat Covers
902920500 Speedometers and tachometers
841300000 Water pumps and fuel pumps

Other opportunities are in the following areas:
• 4WD Accessories
• Body parts, including grills, lights etc.
• Decorative trim
• Spark plugs
• Valves for passenger cars, trucks and buses
• Windshield wiper blades
• Wireless power tools
• Anti glare glass film

Trade Events

Event Name: Automechanika Middle-East
Location: Dubai
Date: June 7-9, 2011

Name: Vacant
Email: Abu.Dhabi.Office.Box@trade.gov
Fax: 971-2-414-2228


United Kingdom
Capital: London
GDP*: $2,149 trillion (2009 est.)
Currency: Pound Sterling
Language: English

Summary

$ Billions 2008 2009 2010 (estimated)
Total Market Size 24.5 22.9 23.3
Total Local
15.6 13.8 14.3
Production
Total Exports 6.4 6.0 6.3
Total Imports 15.3 15.1 15.2
Imports from the U.S. .41 .39 .4
(Unofficial estimates)

The UK market for auto parts decreased in 2009 by 6.3% to a value of $2.3 billion. U.S. imports of auto parts
account for 2.6% of total UK imports. The UK auto parts market is diverse and comprises two main sectors:
original equipment (OE) and the aftermarket. Figures are not available to differentiate market shares between
OE and aftermarket products.

The UK is one of the ten largest motor-vehicle manufacturers in the world and one of the five major automotive
manufacturing countries in Europe. However because of the economic downturn, vehicle production levels fell to
a 25-year low in 2009, declining 30.9% from the previous year and there has been a decrease in demand for auto
parts from OE manufacturers.

Market Entry

Key competitive factors for entering the UK market are quality, price, and innovative products. The most common
way to enter the UK market is to establish a relationship with a local distributor or authorized representative.
Distribution channels include large chain stores, such as A1 Motors and Halfords, small independent stores,
home centers, wholesalers, and repair and service centers. Duty rates vary depending on products and Value
Added Tax in currently 17.5%. This is set to increase to 20% in 2011.


The UK has the strongest independent aftermarket in Europe. There are approximately 35.8 million cars, vans
and trucks registered in Britain, which provide a strong base for the sale of auto parts. Used-car sales are
growing, and car owners and operators are keeping their cars, on average, at least 6.8 years. A growing older
vehicle “parc” (the base of registered vehicles in the UK) means consumers will need more repairs, more often, a
development that offers good potential for products related to the repair trade.

Main Competitors

Competition is strong, with a wide variety of products available. Leading UK suppliers include: GKN PLC, TI
Automotive Ltd, Tomkins PLC and Unipart Group of Companies Ltd. In addition to European subsidiaries of
overseas manufacturers including Robert Bosch, and Japanese companies such as Calsonic Kansei Europe,
and NSK Europe, there are a number of U.S. firms: Cummins, Delphi Automotive Systems UK, Johnson Controls
Automotive UK, Lear Corporation UK, and TRW (U.S.).


Current Demand

U.S. exporters should explore opportunities for sales of test and inspection equipment for use in garages and
service stations that are authorized to undertake stringent annual checks mandated by legislation. These include
laser and optical alignment systems and diagnostic equipment for engine, fuel, emissions and electronic systems
that are used in specialized service and repair facilities. In addition, OEMs are continually looking for innovative
new products, particularly those that focus on providing fuel economy and reduced emissions.

Barriers

The EU is the main source of automotive legislation and is introducing new
rulings concerning motor vehicle safety and pollution. Tire producers and
suppliers face a number of legislative changes such as the S-marking
legislation aimed at reducing noise from tires and the regulations for tire-
pressure monitoring systems.

http://ec.europa.eu/enterprise/sectors/automotive/files/safetty/presentation_tyres_en.pdf

Upcoming Trade Events

Commercial Vehicle Operator Show
National Exhibition Centre, Birmingham, April 12-14, 2011
http://www.cvoperatorshow.com/

Autosport International
National Exhibition Centre, Birmingham, January 13-16, 2011
www.autosport-international.com

Trade Associations

The Society of Motor Manufacturers & Traders
http://www.smt.co.uk/

The Garage Equipment Association
http://www.gea.co.uk/

Government Departments

Department for Transport (Dft)
http://www.dft.gov.uk/


Garage Repair and Maintenance Equipment (2008)
The UK Automotive Parts Aftermarket (2007)


Name: Sara Jones; Position: Commercial Specialist
Email: Sara.Jones@trade.gov; Phone: (44-20) 7894-0451


Uzbekistan
Capital: Tashkent
Population: 27,606,007 (July 2010 estimate)
Currency: Uzbekistan som
Language: Uzbek

Passenger trucks sub-sector has a very high probability of success for at least one US exporter – GM. In fact,
very recently GM announced that it is buying 25% stake in Uzbek auto manufacturer. When it reaches its full
capacity, GM Uzbekistan will be assembling and selling in Uzbekistan and nearby markets about 250,000
Chevrolet cars.

Current Demand
Aftermarket accessories and custom products are in high demand in Uzbekistan and it is expected that this
demand will grow with GM entry into the market. Moreover, during recent surveys Uzbek importers showed their
interest in these products and expressed their readiness to consider business opportunities with US companies.

Aftermarket chemicals and lubricants is a very attractive sub-sector and US manufacturer Chevron is already
taking advantage of this opportunity. Chevron’s joint venture in Uzbekistan Uz-Texaco established in 1997,
consolidated the resources of two International oil companies:
- Uzbek National Corporation "Uzbekneftegaz" (through its subsidiary GPO
"Uzneftepererabotka")
- International oil corporation "TEXACO" (through its subsidiary TEXACO
Overseas Holding Inc.). UZ-TEXACO imports products from Europe and
manufactures high-quality motor oils for the developing industrial complex of
Uzbekistan. UZ-TEXACO is the safe source of lubricant supply for the
agricultural, construction and mining industry of Uzbekistan.

Aftermarket parts and components is also expected to experience increased
demand for US parts and components as GM Uzbekistan expands its operations in Uzbekistan. Chevrolet cars
produced by GM Uzbekistan will need aftermarket parts and components.

Name: Jahangir Kakharov
Email: Jahangir.Kakharov@trade.gov
Phone: +998-711-206705


Venezuela
Capital: Caracas
Population: 25Million
GDP*: USD$ 313 Billion
Currency: Bolivar (BF)
Language: Spanish

Summary
Venezuela has over four million cars, trucks and buses and is the fourth largest assembler of automobiles in Latin
America. Presently, the U.S. exporters’ position in the auto parts market is excellent due to the predominance of
American car assemblers and the strong market acceptance of U.S. automotive products. The estimated age of
motor vehicles in circulation is above 10 years, Venezuela an excellent market for spare parts for older cars.

Market Entry
Although not legally required, U.S. exporters are generally encouraged to find a local representative to provide
technical expertise and after-sales service. In fact, Venezuelan consumers in the automotive sector typically
require qualified local suppliers with expertise, replacement parts, and well-trained personnel for after-sales
service. Local Venezuelan companies might operate as a manufacturer’s representative (sales agent),
importer/distributor, wholesale or retail dealer, separately or all at the same time.


Projections of increased demand continuing over the next five years depends on several factors: 1) continuing
economic strength because of high oil revenues and strong government and consumer spending 2) inflation being
kept under control 3) no extreme currency devaluations, and 4) no social upheaval as a result of rising prices, taxes
and general living costs. If macroeconomic factors remain positive, sector sources estimate that the annual increase
of parts sales could reach 10%. The U.S. market position, though deteriorating somewhat because of the growing
market for Japanese, Korean and European vehicles, is expected to remain strong.

Main Competitors

Venezuelan custom duties on auto parts imports are set by the Andean Sub-regional Pact (Pacto sub regional
Andino), signed by Bolivia, Colombia, Peru, Ecuador and Venezuela. There are no non-tariff barriers. Import duty
range from 5% to 15% on parts and accessories and all imports are subject to a 2% customs service charge. Duties
and charges are calculated on the CIF cost. There is 14% sales tax (VAT) for all countries of origin.

Current Demand
Although no official statistics are available, trade sources estimate that imports of automotive components, not
counting CKD kits for local assembly, exceed $US 800 million/year. Only 30% of the contents of assembled
vehicles are made locally. The estimated average age of motor vehicles in circulation is above 10 years, a factor
which makes Venezuela an excellent market for spare parts for older cars.

Barriers
U.S. exporters to Venezuela are well advised to perform their risk-return calculations carefully, mindful of the
uncertainties but not overlooking the opportunities that exist in various sectors of the Venezuelan market.

Trade Events
Expo Canidra, Date: April 2010 Location: Caracas Description: Largest auto parts event every 2 years.

Venezuela Automotive Industry (2009)



Name: Adriana Sierra
Email: Adriana.sierra@trade.gov
Phone: 58212-9078425


West Bank and Gaza
GDP*: $4.5 billion 2009
Currency: Israeli Shekel, Jordan Dinar, U.S. Dollar
Language: Arabic

Summary
Palestinian market although small is not widely covered by American made vehicles, there is one exclusive Ford
dealer and distributor and another for GM. Chrysler does not have any representation in the market. Buses are
not available because they do not meet European standards, as for trucks it is completely dominated by
European makes such as Mercedes and Volvo and other European brands. OEM parts are very expensive and
hard to find. Spare parts come mostly from China and Turkey.

Market Entry
Smaller scale models in the range of 1600-2000 cc engines are best suited for the market because they consume
less gas, while customs and licensing fees on these models are generally lower.

There is demand for used cars that are competitively priced, used cars up to three years old are allowed to be
imported into PA areas and Israel. American made cars manufactured in Korea by GM are being marketed
successfully because they are competitively priced and come in smaller sized engines. Korean made cars such
as Hyundai are gaining market share followed by VW. Commercial banks are now very active in providing loans
to salaried employees in the PA areas to purchase new cars; the loans are payable over a five years period.
There has been a surge in the number of used car importers with imports coming mainly from Germany the
United Arab Emirates and Jordan. Hybrid cars could gain market share as Palestinian Authority plans to reduce
Purchase Tax from 10% to 0%. Purchase Tax on other cars is 75% and could go down to 50%.

Main Competitors
Korean, German, French, Japanese

Current Demand
There are no accurate or recent statistics.

Barriers
The Palestinian Authority and Israel are in a customs union which means that any product that comes
into the PA areas must meet the standards and entry requirements that apply to Israel. With regards to cars,
Israel follows European standards and the Palestinian Authority has to conform as well. The main difference has
to do with headlights that are not the same as in the U.S.

Trade Events
No events planned

No current market research available

Name: Issa Noursi
Position: Commercial Specialist, Jerusalem
Email: issa.noursi@trade.gov
Phone: 972-2-625-5201


Key e-Resources

www.export.gov
www.buyusa.gov

www.exim.gov
www.sba.gov

http://export.gov/industry/auto/index.asp
http://trade.gov/mas/manufacturing/OAAI

http://export.gov/tradeevents/index.asp
www.buyusa.gov/auto

_____ ________________________Automotive Resource Guide__________________________ 124

Automotive resource guide

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