Best Export Markets

for

U.S. Automotive Parts and Accessories, 2009

Best Export Markets for U.S. Automotive Parts and Accessories was compiled by Grace Warrick, under the supervision of Maurice Kogon, Director of the El Camino College Center for International Trade Development (CITD) in Hawthorne, California. The report is based largely on 2009 Country Commercial Guides (CCGs) prepared by United States Commercial Service (USCS) posts abroad. All CCGs include a standard chapter “Leading Sectors for U.S. Exports.” This report drew from those CCGs which specifically recommended Automotive Parts and Accessories as a best prospect for U.S. exports.

CENTER FOR INTERNATIONAL TRADE DEVELOPMENT

13430 Hawthorne Blvd, Hawthorne, California 90250 USA

http://elcamino.citd.org

Phone: (310) 973-3173 Fax: (310) 973-3132 E-mail: mkogon@elcamino.edu.

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Best Export Markets For

U.S. Automotive Parts and Accessories, 2009

Table of Contents Page I. Export Market Overviews 3 II. Market Potential Indicators 4-8

A. Top 30 U.S. Export Markets, 2002-2005 B. Top 30 World Exporters: Automotive Parts and Accessories, 2002-2005 (HS 8708) C. Top 30 World Importers: Automotive Parts and Accessories, 2002-2005 (HS 8708) D. Market Sizes & U.S. Share by Country, 2003-2005

III. Best Prospect Market Assessments 9-54

• Australia • Bulgaria • Cambodia • Canada • China • Colombia • Costa Rica • Cote d’Ivoire • Dominican Republic • Egypt • El Salvador • France

• Germany • Israel • Italy • Jamaica • Kuwait • Mexico • Netherlands • Nicaragua • Poland • Portugal • Romania • Russia

• Saudi Arabia • Slovakia • Slovenia • South Africa • South Korea • Spain • Trinidad and Tobago • Tunisia • Ukraine • United Kingdom • Venezuela

• IV. Trade Events 55 V. Available Market Research 56 Appendix: Products in Automotive Parts and Accessories, 58

by HS/Schedule B Code

I. Export Market Brief

A. Automotive Parts and Accessories -- HS 8708 This Market Brief provides an overview of the world market for Automotive Parts and Accessories (HS 8708) category, based on the latest trade statistics and market research. Export growth: U.S. exports of Automotive Parts and Accessories (HS 8708) rose from $31.2 billion in 2005 to $31.7 billion in 2008, an increase of 1.8% over the three-year period. Leading Export Markets: Canada is by far the leading market for U.S. exports of Automotive Parts and Accessories, ($15.7 billion in 2008, or 49.51% of total). Other top markets (all above $300 million) were Mexico (26.14% of total), Japan (2.99%), Germany (2.68%), Venezuela (1.63%), China (1.51%), Brazil (1.47%), Australia (1.29%), and the United Kingdom (1.05%).Other significant markets (above $150 million) were: France (0.87%), Korea (0.83%), Austria (0.79%), Belgium (0.59%), Argentina (0.58%), and Russia (0.48%). Fastest Growing Export Markets: The leading markets with both high and sustained growth rates for U.S. exports of Automotive Parts and Accessories during 2005-08 and continuing in the latest year (2007-08) were Mexico, Venezuela, Argentina and Russia. Other significant growth markets over the 2005-08 period were Saudi Arabia, Poland, Italy, Hungary, South Africa, Singapore, India, Colombia, Egypt and United Arab Emirates. Leading Importing Countries: The top foreign importers of Automotive Parts and Accessories in 2008 (all above $11 billion) were Germany (12.2% of total), Canada (7.3%), France (6.5%), UK (6.4%), Mexico (5.5%), Belgium (4.7%), and China (4.6%). Other significant importers (all above $5 billion) were Italy (3.4%), Sweden (2.7%), Japan (2.6%), Czech Republic (2.3%), Slovakia (2.2%), Russia (2.2%), and Turkey (2.1%). Note: Data for Spain, a major importer, were not available for 2008. World Market Size & U.S. Share: Total world exports of Automotive Parts and Accessories by all countries reached $248.3 billion in 2008. The U.S. had a 12.8% share of the total world market in 2008, topped only by Germany (18.4%). Other world suppliers with significant market shares were Japan (11.9%), France (7.9%), Italy (6.6%) and China (5.9%). Best Market Prospects: The markets listed below appear to be particularly promising for U.S. exports of Automotive Parts and Accessories over the next two years:

• Australia • Bulgaria • Cambodia • Canada • China • Colombia • Costa Rica • Cote d’Ivoire • Dominican Republic • Egypt • El Salvador • France

• Germany • Israel • Italy • Jamaica • Kuwait • Mexico • Netherlands • Nicaragua • Poland • Portugal • Romania • Russia

• Saudi Arabia • Slovakia • Slovenia • South Africa • South Korea • Spain • Trinidad and Tobago • Tunisia • Ukraine • United Kingdom • Venezuela

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III. Market Potential Indicators

Automotive Parts and Accessories A. Top 30 U.S. Export Markets. These tables show the leading and fastest growing export markets for U.S. Automotive Parts and Accessories, by country, over the past four years. Source: U.S Census Bureau.

B. Top 30 World Importers. These tables show the leading and fastest growing world importers of Automotive Parts and Accessories, by country, in 2007. Source: United Nations COMTRADE.

C. Top 30 World Exporters & U.S. Market Share, 2007, by Country. These tables show the U.S. and competitor-country shares of total world exports of Automotive Parts and Accessories in 2007. Source: United Nations COMTRADE. D. Market Sizes & U.S. Share, 2007-2008, by Country. This table shows each “best prospect” country’s total market, total imports, and imports from the U.S. and the U.S market share for Automotive Parts and Accessories. Source: U.S. Commercial Staff in each country.

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III. Market Potential Indicators III. A. Top 30 U.S. Export Markets 2005–2008, by Country

HSS 8708: Parts and Accessories for Tractors, Public-Transport Passenger Vehicles,

Motor Cars, Goods Transport Motor Vehicles and Special Purpose Motor Vehicles

Source: U.S. Census Bureau

2005 2006 2007 2008 % Change %Change % Share Country In 1,000 US Dollars 2005-08 2007-08 2008

Canada 18,073,428 18,074,121 18,449,488 15,717,413 -13.04% -14.81% 49.51%Mexico 6,277,104 7,436,683 8,018,276 8,298,765 32.21% 3.50% 26.14%Japan 750,115 913,421 997,834 950,034 26.65% -4.79% 2.99%Germany 842,448 963,419 855,423 850,836 1.00% -0.54% 2.68%Venezuela 314,558 371,779 403,289 517,316 64.46% 28.27% 1.63%China 369,033 532,802 697,431 480,702 30.26% -31.08% 1.51%Brazil 427,557 449,222 489,402 468,006 9.46% -4.37% 1.47%Australia 416,567 442,678 421,520 410,495 -1.46% -2.62% 1.29%United Kingdom 432,093 390,061 360,168 333,321 -22.86% -7.45% 1.05%France 256,545 297,899 314,923 276,824 7.90% -12.10% 0.87%Korea 435,037 444,545 409,036 264,573 -39.18% -35.32% 0.83%Austria 566,621 686,488 481,816 251,887 -55.55% -47.72% 0.79%Belgium 145,617 282,189 289,772 188,871 29.70% -34.82% 0.59%Argentina 129,732 162,167 170,117 184,820 42.46% 8.64% 0.58%Russia 29,004 45,927 54,065 151,147 421.12% 179.57% 0.48%South Africa 73,163 98,411 140,120 148,340 102.75% 5.87% 0.47%Saudi Arabia 81,899 101,924 111,232 146,959 79.44% 32.12% 0.46%Sweden 136,904 130,952 136,535 136,519 -0.28% -0.01% 0.43%Chile 68,024 101,407 135,239 127,081 86.82% -6.03% 0.40%Spain 200,970 202,484 180,016 124,944 -37.83% -30.59% 0.39%Singapore 48,065 78,253 79,447 115,701 140.72% 45.63% 0.36%Netherlands 196,951 188,480 124,019 99,013 -49.73% -20.16% 0.31%United Arab Em. 43,635 61,221 72,860 98,825 126.48% 35.64% 0.31%Italy 74,156 82,961 89,201 98,377 32.66% 10.29% 0.31%India 26,455 46,576 51,472 68,395 158.53% 32.88% 0.22%Hungary 47,917 61,285 61,268 65,942 37.62% 7.63% 0.21%Poland 23,111 39,257 51,759 64,459 178.91% 24.54% 0.20%Colombia 49,973 63,513 59,109 61,406 22.88% 3.89% 0.19%Guatemala 21,616 41,095 63,304 51,981 140.47% -17.89% 0.16%Egypt 47,786 51,287 36,270 51,756 8.31% 42.70% 0.16%

Subtotal : 30,606,085 32,842,507 33,804,410 30,804,707 0.65% -8.87% 97.03%All Other: 581,546 668,531 773,632 944,110 62.34% 22.04% 2.97%

Total 31,187,631 33,511,039 34,578,042 31,748,817 1.80% -8.18% 100.00%

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III. Market Potential Indicators III.B. Top 30 Foreign Importers, by Country, 2008

HS 8708 (Parts and accessories of the motor vehicles of headings 87.01 to 87.05.)

Reporter Import Value % Share Germany $29,625,127,000 12.2% Canada $17,831,405,551 7.3% France $15,906,785,358 6.5% United Kingdom $15,533,565,825 6.4% Mexico $13,257,212,903 5.5% Belgium $11,403,158,661 4.7% China $11,080,284,444 4.6% Italy $8,373,899,884 3.4% Sweden $6,467,534,488 2.7% Japan $6,417,650,249 2.6% Czech Rep. $5,653,605,057 2.3% Slovakia $5,344,206,019 2.2% Russian Federation $5,288,430,601 2.2% Turkey $5,173,790,962 2.1% Brazil $4,982,137,846 2.1% Austria $4,868,263,576 2.0% Netherlands $4,770,627,009 2.0% Thailand $3,412,065,939 1.4% Argentina $2,907,516,147 1.2% Portugal $2,201,445,884 0.9% Australia $2,185,743,317 0.9% United Arab Emirates $2,056,603,632 0.8% Singapore $1,695,150,177 0.7% Romania $1,634,828,233 0.7% South Africa $1,196,537,945 0.5% Denmark $1,074,734,602 0.4% Finland $1,044,130,546 0.4% Switzerland $1,016,832,817 0.4% Slovenia $1,016,228,729 0.4% Norway $916,171,245 0.4% Top 30 Subtotal $194,335,674,646 80.0% Other $48,678,171,627 20.0% Total $243,013,846,273 100.0%

Source: United Nations COMTRADE Note: Excludes U.S. Imports

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III. Market Potential Indicators III.C. Top 30 World Exporters & U.S. Market Share, by Country, 2008

HS 8708 (Parts and accessories of the motor vehicles of headings 87.01 to 87.05.)

Reporter Trade Value in

USD % Share Germany $45,613,827,000 18.4% USA $31,748,817,255 12.8% Japan $29,431,036,226 11.9% France $19,603,903,924 7.9% Italy $16,471,363,338 6.6% China $14,603,742,457 5.9% Mexico $11,750,648,111 4.7% Canada $10,507,706,528 4.2% Czech Rep. $9,573,395,567 3.9% Belgium $8,077,425,511 3.3% United Kingdom $7,042,047,456 2.8% Sweden $5,105,934,278 2.1% Austria $4,686,951,995 1.9% Thailand $4,094,798,303 1.6% Netherlands $3,682,828,531 1.5% Brazil $3,510,264,721 1.4% Turkey $2,876,613,071 1.2% Romania $2,298,210,000 0.9% Singapore $2,252,087,086 0.9% Portugal $2,226,638,978 0.9% Slovakia $2,123,013,468 0.9% United Arab Emirates $1,357,725,418 0.5% Argentina $1,261,601,564 0.5% Switzerland $1,121,672,619 0.5% Denmark $1,084,628,979 0.4% South Africa $887,164,938 0.4% Slovenia $746,964,929 0.3% Norway $625,342,135 0.3% Russian Federation $582,330,275 0.2% Australia $558,868,959 0.2% Top 30 Subtotal $245,507,553,620 98.9% Other $2,810,963,344 1.1% Total $248,318,516,964 100.0%

Source: United Nations COMTRADE

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III. Market Potential Indicators

III. D. Market Sizes & U.S. Share, 2007-2008, by Country The Table below provides comparative data on total market, import market, and imports from the U.S. for 26 countries considered “best prospects” for U.S. exports of Automotive Parts and Accessories (info. unavailable for remaining 12). The countries are listed in alphabetic order, not in rank order. The data are based on local sources and reflect best estimates of USCS commercial officers in each country. Statistical accuracy and comparability to other sources (e.g., “USDOC Bureau of Census”) are affected by a number of factors, including lack of published figures in certain markets, variances in data collection techniques, sources of data, and industry definitions.

Automotive Parts and Accessories (Values in $ Millions)

Country Total Market Total Imports Imports from US % US Share

2007 2008 %

Change 2007 2008 %

Change 2007 2008 %

Change 2008 Australia 10,400 10,580 2.00 4,043 4,980 23.18 740 779 5.27 16.00 Canada 16,444 16,775 2.00 12,107 12,349 2.00 10,354 10,562 2.01 86.00 Colombia 4867 526 -89.00 593 641 8.09 163 176 7.98 27.00 Costa Rica 166 183.7 11.00 161.4 177.8 10.16 44.8 54.2 20.98 30.00 Cote d'Ivoire N/A N/A N/A 451 N/A N/A 19 N/A N/A N/A Czech Republic 18,000 18,800 4.00 13,000 10,300 -20.77 68 158 132.35 2.00 Egypt 1,390 1,525 10.00 1,175 1,305 11.06 210 230 9.52 18.00 El Salvador 114.5 123.5 8.00 136.5 143.3 4.98 44.8 49.28 10.00 34.00 France 38,870 38,572 -1.00 28,035 30,558 9.00 820 810 -1.22 3.00 Germany 38,700 38,700 0.00 11,500 11,500 0.00 2,000 2,000 0.00 17.00 Israel 180 206 14.00 371 420 13.21 23 30 30.43 7.00 Italy 53,400 57,300 7.00 13,200 15,100 14.39 295 300 1.69 2.00 Mexico 39,700 40,900 3.00 20,000 18,700 -6.50 N/A N/A N/A N/A Netherlands 6,459 23,957 271.00 26,310 25,125 -4.50 550 603 9.64 2.00 Nicaragua N/A N/A N/A 224.8 266.8 18.68 32.2 N/A N/A N/A Poland 5301 7420 40.00 4534 6490 43.14 63.3 76 20.06 1.00 Romania 7.842 6.67 -14.00 5.94 5.46 -8.08 50 39 -22.00 714.00 Russia 9,500 10,500 11.00 4,300 5,300 23.26 1,000 1,100 10.00 21.00 Slovakia 23,997 25,192 5.00 9,774 9,642 -1.35 22 46 109.09 0.50 Slovenia 1,270 1,300 2.00 N/A N/A N/A N/A N/A N/A N/A South Africa 34,710 29,890 -14.00 14,500 12,500 -13.79 766 625 -18.41 5.00 South Korea 45,999 36,042 -22.00 3,832 3,907 1.96 N/A N/A N/A N/A Sweden 10,735 11,977 11.57 6,636 7,976 20.19 106 117 10.38 1.47 Switzerland 1,230 1,242 0.98 1,115 1,129 1.26 48 49 2.08 4.34 United Kingdom 21,896 20,755 -5.21 12,977 12,390 -4.52 345 352 2.03 2.84 Venezuela 2,253 2,200 -2.35 1,768 1,300 -26.47 530 500 -5.66 38.46

Source: U.S. Commercial Staff in each country

Information unavailable for: Bulgaria, Cambodia, China, Dominican Republic, Kuwait, Jamaica, Saudi Arabia, Spain, Swaziland, Trinidad and Tobago, Tunisia, Ukraine

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IV. Best-Prospect Market Assessments

Following are overviews of “best prospect” markets for Automotive Parts and Accessories, based on observations of U.S. Commercial Service (USCS) posts in each country. The countries appear in alphabetical order. For more detailed market research on Automotive Parts and Accessories in these and other specific markets, see relevant Market Research Reports listed in Chapter VI. For general commercial and economic information on individual countries, see the relevant Country Commercial Guides (CCGs).

AUSTRALIA Overview The economic crisis will have a short-term negative impact on capital-equipment purchases within the automotive industry. It is anticipated that the slowdown of new car sales as a result of the world economic crisis will have a positive impact on the aftermarket industries as more consumers look to improve and repair their existing motor vehicles. Industry experts forecast a decrease in local production which will have a positive impact on imports; an expected 3% increase in imports from the U.S. from 2008 to 2010. The Australian Automotive Aftermarket Industry is a mature industry that is believed to be moving into decline. The Federal Chamber of Automotive Industries (FCAI) reports that new vehicle sales have decreased 2.9% or 28,048 vehicle sales from November 2007 – November 2008. As of November 2008, market shares were; Toyota (22%), GM Holden (14%), Ford (10%), Mazda (7%), and Mitsubishi (6%). Of these companies, GM Holden, Ford, and Toyota have manufacturing facilities in Australia. The industry is increasingly driving towards the acquisition of businesses by larger companies, which has led to the consolidation and rationalization of the industry. It should be noted that cars in Australia have a right side steering column as they drive on the left side of the road. Australia has the third highest vehicle ownership rate in the world with over 600 vehicles per 1,000 people. Australia also has one of the oldest 'car parcs' in the world, at an average age of 10.8 years. Growth in Australia’s aftermarket has averaged above 5% over the past ten years. The aftermarket for replacement parts and accessories is a significant element of Australian component producers' total sales. This part of the market is estimated to be worth approximately $5 billion for replacement parts and $6 billion for accessories and is split fairly evenly between local producers and imports. According to the World Trade Atlas 2007, the United States is the leading supplier, accounting for 24% of imports or $494 million, while Japan comes second with 20%. The U.S.-Australia Free Trade Agreement (FTA) has eliminated tariffs across most U.S. automotive imports. This fact coupled with the larger size of the U.S. industry has contributed to a 10.4% increase in U.S. exports to Australia since its inception. Future growth potential may be limited by the modest size of the Australian market. Although

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the United States is Australia’s largest import source of these components, U.S. exports to Australia represent less than 2% of total U.S. exports of motor vehicle parts. Best Products/Services The Australian automotive market provides good opportunities for U.S. suppliers of both specialty aftermarket equipment/accessories, as well as the necessary aftermarket parts such as 4WD parts and accessories, street performance parts and accessories, and automotive tools. In general, high-quality, innovative, environmentally conscious and competitively priced parts and accessories are particularly in demand. Opportunities A prime area of opportunity in Australia’s auto sector is for accessories and replacement parts for light and medium-sized family cars and sports utility vehicles. Parts and accessories for routine auto maintenance, street performance, and high-end cosmetic auto enhancement also offer considerable opportunity for U.S. firms. Sales are generally through agents or distributors. BULGARIA Overview The automotive market in Bulgaria is characterized by steady growth of new car imports and sales, and steady imports of used cars. The number of new cars sold during the first 9 months of 2008 in Bulgaria was 39,926, compared to 45,145 for all of 2007 and 42,625 in 2006. The number of trucks and buses sold in 2008 was 2,923, compared to 2,851 for 2007 and 2,675 in 2006. For the three year period 2006 through 2008, the automotive import car market in Bulgaria registered 16% growth for cars and 61.8% for trucks and busses. Nevertheless, automobiles in Bulgaria still tend to be very old with the continued import of used cars at a rate of about 150,000 per year. Almost 18% of the cars registered in Bulgaria are older than ten years. Since 2000, Bulgarian families prefer to buy cars not older than ten years. Approximately 70% of Bulgarian families own a car and almost 80% of the companies with business activities have motor pools, which could include cars, vans, minibuses, jeeps and light trucks. Companies prefer to use leasing schemes on the basis return-replace. 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. For newer used cars, sophisticated electronic car equipment requires special analyzers, testers and experts to deal with it.

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Best Products/Services Best sales prospects include consumables, service equipment for electronic diagnosis, monitoring, testing and analyzing and auto cosmetics for the second hand car market, year 2000 or later. Very few Bulgarian companies import classic cars and/or tuning equipment. These companies suffer many tariff and non-tariff trade barriers. CAMBODIA Overview Cambodia has no municipal public transportation. The majority of people travel via motorbike or car. With Cambodia’s growing prosperity, automobile ownership is rapidly increasing. The vast majority of cars are imported second-hand vehicles. The most popular models are 4-wheel drive vehicles and mid-sized Japanese sedans; the latter are usually U.S.-made models. All car imports must be left-hand drive. The actual size of the automobile market is difficult to estimate due the routine occurrence of smuggling and theft from Thailand. However a local company estimates Cambodian demand as 2,500 new vehicles and 40,000 used vehicles per year. The U.S. appears to be the largest supplier of used vehicles. U.S. exports of new and used passenger cars to Cambodia accounted for some $86 million in 2007, nearly double the $44 million exported in 2006. A number of companies sell used and new cars in Phnom Penh. Ford has a local dealership, and the market also supports Chevrolet, Humvee, Mercedes, Ssanyong, Nissan, and Peugeot dealers as well as representatives of all major Japanese companies such as Toyota, Nissan, and Mitsubishi. Automobile parts and accessories from the U.S. are available in Cambodian markets, particularly for Toyota vehicles. Limited availability of parts for other companies’ models has led customers to choose Toyotas because parts are available and affordable. As with other products, U.S. auto parts have a reputation for quality and attract a higher price than parts produced in Thailand, Taiwan, or other Asian countries. Best Products/Services Used cars, accessories, and spare parts. Resources Ministry of Public Works and Transport: www.mpwt.gov.kh CANADA Overview 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 was estimated at

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over $16.7 billion in 2008. The sector has been growing at a steady rate of 2 to 3% over the past 4 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. Best Products/Services The best prospects in the automotive sector are in the aftermarket, because of the 50 million cars on the road today and the constant maintenance that they require. In other words, while the auto sales market has declined rapidly, the demand for maintenance is still very much there. 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 $1,000 in maintenance per year. This figure is important because 43% 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. Opportunities Ontario offers the largest aftermarket potential at $7.1 billion, followed by Quebec at $4.2 billion, the Prairie Provinces (Saskatchewan, Manitoba Alberta) at $3.5 billion, British Columbia at $2.6 billion, and the Atlantic Provinces at $1.2 billion. There are still many opportunities for new companies entering the market from the United States. The recent depreciation of the Canadian dollar has lowered start-up costs for firms seeking entry into the Canadian automotive aftermarket industry. Furthermore, the substantial decline in the price of commodities used in the production of automotive parts has improved growth forecasts for the aftermarket parts. Resources • Automotive Industries Association of Canada http://www.aiacanada.com/ • Industry Canada http://www.ic.gc.ca/ic_wp-pa.htm • DeRosiers Automotive Consultants http://www.desrosiers.ca/ • CS Canada Automotive Aftermarket Sector Specialist Madellon. Lopes@mail.doc.gov. CHINA Overview China is now the second largest automotive market in the world, just barely trailing the United States. Its motorcycle market is limited by the general prohibition on motorcycles in China’s large cities. China has about 6,000 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

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market is through new vehicle sales. However, revenue from after market is increasing rapidly. 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). In 2008, it’s estimated that ten million new motor vehicles in China will be sold. As of November 2007, China had already produced 8.8 million vehicles, a 33.33% rise over 2006’s figures. Most Chinese car buyers are first time buyers as incomes rise and car prices decline. Additionally, as China’s restrictions on trading and distribution have been reduced over the years, American companies are gaining the right to distribute most of their own products, including automobiles and related parts, in any part of China. Car dealerships are also about to embark on the business of buying back and selling used cars. Imported used cars continue to be prohibited. The main goals for Chinese automotive components, parts, and accessories manufacturers are to improve technology and quality and to develop their own design capability. Currently, a consortium is working on developing a Chinese automatic transmission, a technology which has eluded them so far. 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. However, Chinese companies are dominating the low-end components market and have aggressively sold their parts to U.S. automakers. 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 still a market for imports and American products are generally highly regarded by Chinese customers. The Chinese government has launched the “National Projects of Electric Vehicles,” that encourages the development of environmentally friendly automobiles. U.S. companies possessing clean energy parts and technologies will find more and more opportunities in the Chinese market. Best Products/Services • Engines for motor vehicles and motorcycles (usually by U.S. companies already in China) • Auto and motorcycle casting blanks • Key and high tech 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

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• Auto electronic devices and instruments (including control systems for engine, chassis and vehicle body)

• Fuel cell technology • Automotive accessories • After market products (that meet legislative guidelines for vehicle modification) COLOMBIA Overview Colombia has over three million cars, trucks and buses and is considered an important auto assembler in Latin America after Brazil, Mexico and Argentina. The average age of motor vehicles in circulation is 15 years or more, which makes Colombia an excellent market for spare parts for older cars. Despite the global crisis in this sector, the outlook for the auto sector continues to be excellent, with industry observers projecting a steady growth in demand for auto parts over the next five years. The United States has traditionally been Colombia’s major supplier of automotive parts and accessories, accounting for approximately 26% of total imports from 2006-2007. In 2008, the Colombian automotive sector experienced a downward trend after three years of significant growth. The market grew approximately 14% in 2008, led by increases in the local production segment. One of the reasons for this expansion was the reduction in finished vehicle exports to Venezuela. President Chavez issued a decree in January 2008 to restrict Colombia’s auto exports to 18,000 vehicles annually. The restriction provided and will continue to provide opportunities for U.S. auto parts exporters as the age of the Venezuelan fleet increases. Colombia’s road infrastructure, generally speaking, is in poor-to-fair condition which, increases the likelihood of damage to vehicles and requires constant vehicle safety checks. Another factor contributing to future growth of the automotive market is that approximately 80% of cargo transportation and passengers are moved in Colombia by land. Thus, transportation companies need to keep their vehicles in optimum condition to perform efficiently. Local carmakers are active in the market and have captured market share by increasing the variety of models produced in Colombia and for export to Venezuela, Ecuador and other Andean countries. Also, there is a permanent demand for parts and accessories for the maintenance and repair of the Bogota dedicated lane passenger bus transportation system, “Transmilenio,” and similar systems developed for Cali, Barranquilla, Medellin, Pereira and other major cities. China is becoming a serious competitor in the automotive parts market competing mainly on price. However, consumers are wary of buying Chinese parts because of their perceived lower quality and durability compared to other vendors. According to industry sources, local companies plan to manufacture automotive parts and accessories having the largest demand in the local market. Demand for imported equipment will follow the similar trend. However, the growth brought about by expanded markets created by international trade agreements (such as the CAN-Mercosur, G-3, ALADI, and others) could translate into more opportunities for U.S. imports. Best Products/Services Best sales prospects over the short and medium term will be determined primarily by the continued demand of the aftermarket and by the demand for parts generated by the equipment already in operation.

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• Tires for small vehicles, trucks and buses • Gasoline and diesel engines, piston rings, cast-iron engine parts, carburetors, engine valves,

other cast-iron engine parts, fuel-injection pumps • Parts of fans, ventilating hoods, air conditioning and parts for motor vehicles • Ball bearings, tapered roller bearings, roller bearings, gaskets and similar joints of metal

sheeting • Electric storage batteries, nickel-cadmium storage batteries, electrical distribution parts,

terminals, electrical splices and electrical couplings, boards, panels, consoles • Cabinets for motor vehicles, bodies for passenger automobiles, body stampings, gearboxes,

drive axles with differential, suspension shock absorbers, radiators, clutches, suspension systems, parts for power trains, brake parts

Resources • CS Bogota contact: Ricardo Roldan, Commercial Assistant.

Email:ricardo.roldan@mail.doc.gov Tel:571-383-2731 • Colombian Association of Automotive Parts Manufacturers-Acolfa: www.acolfa.com.co

Tel:571-571-2842409 • National Statistics Department-Dane: www.dane.gov.co Tel: 571-597-8300 COSTA RICA Overview Local production is limited to small electrical and metal parts, batteries, electrical copper cable, hydraulic seals, filters (air/gasoline), steel leaf springs, aluminum and steel wheels, windshields, carpets, hoses, mufflers, bus bodies, and tires. Major U.S. competitors in this sector are China, Japan, South Korea, Brazil, Taiwan, and Mexico. Total imports in this sector are expected to increase in 2008 by 9.6% over the previous year to about $177.8 million. The consensus within the local automotive parts industry is that the sector will grow at an annual rate of 3-4% from 2008-2010. The surge on the imports of used low cost vehicles from Asian countries during the last three years led to an increase in auto parts imports from Korea, which reduced the U.S. share of market. As a result, industry sources indicate that the U.S. share of the import market is expected to improve only slightly from 2008-2010. The U.S. market share for automotive parts for 2008 was estimated to be 30.5%. Many of the cars on 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. Best Products/Services 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.

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Opportunities 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. Import taxes for automotive parts before CAFTA ranged from zero to 29.95%, depending on the product. Most of these import taxes disappeared immediately with CAFTA-DR approval; others will be gradually reduced to zero import taxes over a period of 10 years. Resources • U.S. Commercial Service Costa Rica Industry Specialist: Victor Cambronero,

Victor.Cambronero@mail.doc.gov • U.S. Commercial Service Costa Rica: http://www.buyusa.gov/costarica/en • 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 COTE D’IVOIRE Overview Although total imports in this sector had decreased between 2002 and 2006 as a result of the political crisis, the used automobile market has been growing for the last seven years and reached a level of 38,308 units annually in 2006 (latest statistics available). Market liberalization measures related to used vehicles and weak credit availability for potential buyers of new cars are prime factors in the growth of the second-hand car market. Spare parts and accessories are a very attractive segment of the automobile market. Spare parts in Côte d’Ivoire are very expensive. The market for such products will grow quickly due to the age of the existing automobile fleet and growing fleet of used vehicles. Best Products/Services • Consumables: oil and air filters, wiper blades, rubber blades, hoses, gaskets and rings, engine

parts, brake parts, exhaust system parts, car body parts • Accessories: wheel covers, car/truck bed covers, car batteries, exterior accessory lights • Auto security products: alarms and steering wheel locks • Service equipment for electronic diagnosis, monitoring, testing and analyzing, wheel balancing,

tire changing, oil changing • Battery chargers, quick repair kits, tools, and paints Opportunities Excellent opportunities exist in importing U.S. second-hand cars and buses (seven-year age limit), spare parts, security/antitheft devices and safety devices. Resources • The U.S. Department of Commerce Regional Office for Central and West Africa:

http://www.buyusa.gov/westafrica/en/ • Côte d'Ivoire Investment Promotion Centre (CEPICI), http://www.cepici.net • Chambre de Commerce et d’Industrie de Côte d’Ivoire http://www.cci-ci.org

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• Bureau National d’Etudes et de Developpement (BNETD): http://www.bnetd.ci • Ivorian Customs Office: http://www.douanes.ci CZECH REPUBLIC Overview The Czech automotive industry has dominated the national economy and represented roughly 20% of its GDP in 2008. It is likely to be a negative scenario in 2009. As in most of the world, the automotive industry has been hit hard by the global financial crisis and it is predicted that there will be a 20-30% fall in sales throughout the EU (the main export market) in 2009. However, Czech output of motor vehicles reached a record level in 2008. Output of road vehicles grew by 0.81% to 947,372 units. Output of light utility and passenger cars, which made up the biggest share of total car production, grew by 0.89% to 939,600 units. Nevertheless, in January-September 2008, car production grew by 9.5% and car producers had hoped that in early autumn that annual output would exceed one million units. While total passenger car sales in EU fell 7.8%, Czech car sales increased 8.4% in 2008. Czech car maker Skoda Auto saw a drop in its output of approximately 3% to 603,200 units. Still, the company increased sales by 7% to a record 674,530 cars in 2008. Output at TPCA (Toyota-Peugeot-Citroen) increased by 5.1% to 324,289 cars. In November, 2008 South Korean car maker Hyundai launched production at its plant in Nosovice, northern Moravia. Hyundai produced 12,050 cars at the plant by year-end 2008. Truck output fell by 14% to 2,726 units. In contrast, output of buses increased slightly to 3,496 units. Motorbike production declined by 27% to 1,550 units. Best Products/Services •Spare parts •In-car entertainment systems •Auto security equipment •Car care products •Service suppliers for global manufacturers Opportunities Toyota-Peugeot-Citroen (TPCA) is planning to increase its production capacity; however, a final decision regarding this upgrade has been postponed until the second half of 2009. DOMINICAN REPUBLIC Overview In the Dominican Republic, the demand for automotive spare parts is linked to the aging car population, the growth in total vehicle population, and the deterioration of Dominican streets and roads. According to the Motor Vehicle Department, there are 1.9 million vehicles in the Dominican Republic. There is also a general tendency in the Dominican Republic to overextend the useful life of vehicles due to their high cost. This influences the increasing demand for automotive parts and services. Although the market for these products is expected to increase by 5% only, imports from the U.S. should increase by 10%.

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There is local production of batteries, which only covers a small percent of the total market, while the rest of the market is supplied from imports. Previous to the implementation of CAFTA-DR (March 1st, 2007), Japanese and other Asian products accounted for 50% of total imports due to the significant car population imported from Japan. Nevertheless, U.S. automotive spare parts exporters have managed to increase exports to the Dominican Republic mainly because of the CAFTA-DR, which decreased the import tax levied on U.S. products from 20 to 0% for most products, while others are going through a phase-out process of up to 10 years. As a result, the market share for U.S. products is now 55%. There are no restrictions for importation of these products into the Dominican Republic. The best way to introduce a foreign company in the Dominican market is thorough local importers and distributors. Best Products/Services For U.S. manufacturers best sales are: Suspension shock absorbers, brakes, batteries, electrical parts for motor engines (fuses, sparks plugs, ignition distribution, etc.), and parts for Japanese made light vehicles. Used automotive spare parts have also become a good prospect for the Dominican Republic. Resources Trade Specialist who handles Automobiles Parts and Services: Isolda Frias de Gottschalk: isolda.frias@mail.doc.gov EGYPT Overview Approximately 4 million vehicles occupy the roads of Egypt. This amount increases by about 20,000 every month and most vehicles in Egypt have an expected lifetime of more than 10 years, This long ownership partnered with rough road conditions and deteriorating vehicle conditions has created a huge demand for auto aftermarket products and services. The Egyptian authorities are currently taking aggressive steps to nurture a local automotive and parts market and increase vehicle safety. The Government lowered customs duties on car parts and accessories to a minimum of 10%. Lower customs duties will encourage Egyptians to purchase new car parts rather than have old parts rebuilt. As a result of these changes, industry specialists are expecting the auto parts industry to flourish in the coming years. Best Products/Services • Comfort and Entertainment Accessories • Modern Garage Equipment • Service Equipment

• Spare parts • Tires and Wheels

Resources • Commercial Service in Egypt: http://www.buyusa.gov/egypt/en/ • Egyptian Government Web Portal: http://www.egypt.gov.eg/english/ • The Egyptian Auto-feeders Union: http://www.eafa-egypt.com/home.asp • Egypt's Official Automotive Portal: http://www.motoregypt.com/ • Commercial Specialist for the Automotive Aftermarket Sector:

Essam Tabarak, essam.tabarak@mail.doc.gov

EL SALVADOR Overview As in previous years, this sector has been identified as one of the most important sectors for U.S. exporters, since El Salvador imports almost all of its vehicles, vehicle parts, and accessories. There is strong interest from Salvadorans to learn about business opportunities with U.S. companies in this sector. CS San Salvador constantly receives inquiries from Salvadoran companies looking for U.S. suppliers, and delegations of buyers to automotive tradeshows in the U.S. are always the largest delegations compared to other industries. El Salvador has been steadily increasing its market demand for parts and accessories. “Tuning” is now a term very well known and used by most Salvadorans; this esthetic and engine modification of vehicles has become a true passion for many vehicle owners. Other trends that result in an increase in the demand of parts and accessories include “drifting;” each time, more and more vehicle and motorcycle owners gather to show their new abilities. Several local automotive magazines feature the latest updates and products for these trends. The market has evolved to a new phase that not only requires that the vehicle transports, but also that the vehicle reflects the personality of the owner. 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 and roads, 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 are frequently purchasing parts and accessories from local automobile parts importers, as well as automotive equipment usually imported directly for use in their shops. In comparison to previous years, the demand for used imported vehicles has decreased by 5%, since well established, reliable distributors with good reputations are now distributing new Chinese brands of economical vehicles (e.g, Chery, Great Wall, Jinbei, Zot Ye, Dongfeng, and JMC) and are offering competitive prices and credit lines. Public transportation service buses/microbuses are old and require repair in order to continue providing the much-needed public transportation service. Most spare parts and accessories 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. There are approximately 650,000 vehicles registered in the country, of which 49% of total registered vehicles are concentrated in the Department of San Salvador. Since 2005, the number for vehicles has been steadily increasing and in 2007 almost 18,000 new vehicles were sold. In 2008 El Salvador sold approximately 14,600 new vehicles. U.S. brands have a market share of almost 13%. Chevrolet is the more successful brand followed by Ford. From the 45 different auto brands distributed in El Salvador by 16 dealers, 7 brands are from the United States. These 45 brands include more than 10 Chinese brands that were introduced in El Salvador during 2007. 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

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price oriented and this means there is strong competition in sales of parts and accessories from other countries like China, Taiwan and Brazil. Best Products/Services • Accessories • Engines • Filters • Accumulators • Wheels • Radiators • Sound systems • Alarms • Mufflers

• Tires • Tire repair • Electronic diagnostics • Tire balancing • Compressors • Clutches • Steering wheels • Batteries

Opportunities 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 HTSUS 8708 were automatically reduced to zero after CAFTA implementation. For Vehicle Accessories under HTSUS 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 7 years. Also, American auto brands have been steadily increasing their units in the market over the past several years, and spare parts are needed. Salvadorans recognize the value of quality parts made in the U.S. Considerations for potential opportunities: • Increased environmental awareness and concern to keep cars in better condition to avoid polluting. This will require purchase of additional parts and their necessary equipment and machinery for installation. • High prices of gasoline and diesel also make people look for ways to make their engines more efficient. These types of products, if at competitive prices, have good opportunity in the market. Resources • Vice Ministry of Transportation: http://www.mop.gob.sv • Salvadoran Association of Auto Parts Importers (Asociación Salvadoreña de Importadores de Repuestos Automotrices): asira@salnet.net • Salvadoran Association of Distributors of Vehicles: asalve@integra.com.sv • Cecilia de Avila, Commercial Assistant: cecilia.avila@mail.doc.gov or CS San Salvador:

san.salvador.office.box@mail.doc.gov FRANCE Overview France is the fourth largest European automotive market after Germany, the U.K. and Italy. With an estimated registered 2,584,035 new (not including second hand) passenger and utility vehicles in 2007, France is facing difficult times as both car production and demand have decreased. On the other hand, the average life span of cars is increasing and a higher number of used cars were registered.

French automotive parts suppliers’ sales reached approximately $38.9 billion in 2007 (a figure comparable with 2006). Thanks to a dynamic first semester 2008 in terms of car production, French automotive parts suppliers managed to stabilize their sales in 2008. The drop in production and demand of passenger cars in France, which started in mid 2008, will continue to affect automotive parts suppliers in 2009. Figures for 2008 and 2009 are estimations only, based on the current economic situation worldwide. The main categories of automotive parts included in these figures are: power train equipment (40.2%), vehicle interiors (30.3%), tire-to-road link components (14%), body components (11.9%) and equipment for measurements, checks, diagnostics and repairs (3.6%). 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).France‘s automotive trade deficit with Germany and U.K increased by 41.4% and 2.2% respectively while the trade balance with Spain remained positive (+30.2%). Outside of Europe, where France achieved more than 83% of its sales, the sector’s balance surplus with China deteriorated significantly (-43.6%). OEM auto parts sales reached approximately $32.4 billion, a 2.2% decrease compared to 2007, mainly due to the decrease of French car production. All product categories suffered except air supply components and electrical equipment for engines, controls for transmission systems and exhaust line components. On the other hand, automotive parts suppliers’ sales to the aftermarket (OES + IAM) increased by 2.1% to reach approximately $6.5 billion in 2007. This evolution is mainly due to two factors: 1) the increase in the number of second hand registered light vehicles (passenger and light commercial cars), and 2) the average age of light vehicles, which exceeded 8 years in 2007. Product categories which were successful in 2007 were: fuel circuit components, engine components, air supply components and electrical equipment for engines, controls for transmission systems, and body components. 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, and 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 2007 to reach 820 million dollars. The trend is still to source in foreign countries such as China, Japan, Taiwan and India to the detriment of the USA. 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. Since France’s exports and imports of parts and components and assembled vehicles are largely within the Euro zone, the use of Euro as a transaction currency is a determining factor in source selection.

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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. Best Products/Services Best prospects for U.S. suppliers will be for 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. Resources • French Vehicle Equipment Industries Association. Website: http://www.fiev.fr • French Association of Automotive Independent Distributors. Website: http://feda.fr • U.S. Commercial Service Trade Specialist: Stephanie.Pencole@mail.doc.gov Phone: (33-1) 43 12 71 38 Website: http://www.buyusa.gov/france/en GERMANY Overview In 2008, the automobile industry was one of the driving forces behind German economic growth. During the first three quarters of 2008, both domestic demand and exports of German cars increased slightly. Because of increased global sourcing by German manufacturers, and a favorable EUR-USD exchange rate, U.S. parts manufacturers were able to increase their exports to Germany. At the end of 2008, the German automotive industry was hit by the worst downturn in demand since the late 1950’s – demand for parts and services is expected to be negatively affected. Experts anticipate that the German automotive industry will have to face serious challenges until 2013 and are not in a position to provide forecasts for 2009... Best Products/Services Engine electronics; multi-media products; forged and pressed parts. Trade Associations: VDA (German Automobile Association): www.vda.de ZKF (Central Association for Car and Body Technology): www.zkf.de Central Association for German Motor Trades and Repair: www.kfzgewerbe.de Commercial Service Contact: paul.warren-smith@mail.doc.gov ISRAEL Overview The automotive aftermarket sector in Israel consists of original equipment manufacturer (OEM) parts and their substitutes. There are 2.3 million cars on Israeli roads of which 3.8% are made in the United States and the balance from Europe (46.6%) and Asia (49.6%) - Japan 38.7% and South Korea 10.9%. In 2007, total imports of aftermarket products amounted to $371 million, of which $23 million was from the U.S., Germany ($63 million), Japan ($45 million), France ($18 million), Italy ($23 million), China ($55 million) and the balance from Korea and Taiwan. There are presently between 600–700 importers of aftermarket products and around 20 local manufacturers of aftermarket parts and accessories in Israel. About six years ago new legislation

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was passed by the Anti-Trust Authority to stop car importers from forcing garages and car owners to use only OEM parts. American spare parts are recognized for their high quality although over the years Israel has progressively adopted European standards as the bulk of cars being imported are from Europe and the Far East. The Government of Israel has recently appointed an inter-ministerial committee to review the Israeli car market in general. One of the committee’s main objectives is to open up the Israeli car market to competition and to eventually reduce taxes on cars from 90% to 65%. 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. Best Products/Services • 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 break 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 Resources Central Bureau of Statistics, http://www1.cbs.gov.il/reader/cw_usr_view_Folder?ID=141 ITALY Overview Recent data from ‘Centro Studi Promotor’, a major Italian automotive research organization, www.centrostudipromotor.com, highlights that sales of new cars in Italy in 2008 totaled about 2,160,000 units (down 13.4% from 2007). Early forecasts for 2009 expected a further decrease to about 1,850,000 units (down 14.3% from 2008). The decreases should be particularly high in the first quarter of 2009 (-25% over the same period of 2008) and the second quarter of 2009 (-19.5%) in the absence of ameliorative measures taken by the government. This negative result is mainly due to the global economic crisis. The Italian Government has responded to the drastic contraction in this sector with an automobile assistance package in early February 2009. This package, part of a broader group of industrial sector stimulus measures, will provide purchase incentives for new vehicles ranging from 500 to 6500 Euros. At the time of writing, the measures still required parliamentary approval, but its passage is expected. In the draft approved by the government, the plan does not discriminate against automobiles of non-Italian companies. On the other hand, the current economic difficulties offer opportunities for the used car market, which as of December 2008, represented more than 70% of the total sales (new + used). Notwithstanding the economic crisis, the local market leader, Fiat Group (with its brands Fiat, Lancia, Alfa Romeo, Ferrari, Abarth, and Maserati) improved its market share by 0.5 points as compared to 2007. Fiat success is due, in particular, to the new model “500”, and to the range of

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new affordable city cars. Fiat is basically the only automotive manufacturer in Italy (apart from VW-owned owned Lamborghini). Many foreign groups are active in the Italian market including Ford, GM and Chrysler; as well as PSA and Renault (France); Audi, BMW, Mercedes, Porsche, Smart, and Volkswagen (Germany); Daihatsu, Honda, Infiniti, Lexus, Mazda, Mitsubishi, Nissan, Subaru, Suzuki, and Toyota (Japan); Hyundai, Kia, and Ssangyong (South Korea); Aston Martin, Bentley, Jaguar, Land Rover, Lotus, Mini, and Rolls Royce (UK), Lada (Russia), Seat (Spain), Skoda (Czech Republic), Dacia (Romania), Volvo and Saab (Sweden). Chinese (DR, Great Wall, Shuanghuan) and Indian (Mahindra, Tata) groups are entering the Italian market too. All the Big Three US manufacturers, Chrysler, www.chrysler.com/en/, Ford Motor Company, www.ford.com, and General Motors Corp., www.gm.com, operate in the Italian market mainly through their European subsidiaries (generally headquartered in Germany). They usually sell their cars manufactured in Europe (Germany, France, Austria, Belgium, Spain, Sweden, etc.); direct imports from the U.S.A. are relatively few (GM also imports Chevrolets from South Korea). The following U.S. (or U.S. owned) brands are available in Italy: Chrysler, Dodge, and Jeep (Chrysler); Ford, Mazda, Volvo (Ford Group); Cadillac, Chevrolet, Corvette, Hummer, Saab and Opel (GM) SUV’s are the most recent automotive craze in Italy, but, as elsewhere, they are facing criticism due to their environmental impact and the difficulties in driving and parking them in the often small and crowded Italian cities. Some U.S. SUV’s are directly imported into Italy by local specialized importers and they tend to cater to the request of wealthy individuals. In recent years, Italian drivers have shown a preference for diesel cars due to the lower fuel price. Diesel engines equip not only larger cars, but also smaller ones like the city car Smart and the top selling Fiat Punto. In 2008, rising oil prices almost equalized the price of gasoline and diesel. As a consequence, gasoline cars, which have higher fuel consumption, but lower retail price and insurance costs, have retaken the lead in sales. In early 2005, the Fiat Group ended most of its financial and manufacturing agreements with GM, signed in March 2000. Nevertheless, General Motors Powertrain Europe kept its Powertrain headquarters and engineering center in Turin, which is taking the lead in the group for diesel engine manufacturing and engineering activities. GM Powertrain Europe became operational in May 2005, and has engineering and manufacturing centers in Austria, France, Germany, Hungary, Italy, Poland and Sweden. In November 2005, Fiat struck an agreement with Ford Europe to jointly develop a small car, (engine and transmission supplied by Fiat), to be produced in a Polish Fiat plant and marketed from 2007-2008. The results of the agreement are the new Fiat “500” and the just released new Ford KA model. In January 2009, Chrysler and Fiat announced an agreement whereby Fiat would receive a 35% stake in Chrysler (which could be raised to 55%). Fiat is not paying cash, but will share products and platforms for small cars, as well as its green technologies, with Chrysler. The deal will help Fiat return to the U.S. market where it has long been absent. Chrysler will be able to sell in more foreign markets, like South America and Asia. The alliance should allow both companies to optimize their respective manufacturing footprint and global supplier base, and to save by combining their purchasing power. This alliance could lead to new opportunities for U.S. parts and components manufacturers. The local market for automotive parts and service equipment declined during recent years, due to a general decrease in passenger car production. The automotive parts market constantly changes, so it is difficult to speculate how it will develop in the future as it depends heavily on car sales. The current decrease in car sales has certainly had a negative impact on the domestic industry,

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and will have future consequences, especially as regards the OEM market. Impact on the aftermarket should be less. Many car owners who are not replacing their old cars will still need some more maintenance to keep their old cars safe and efficient. Local motor vehicle production totaled more than 900,000 cars and 370,000 industrial vehicles in 2007. Expectations are 2008 will show a slight increase. Domestic Italian production of automotive parts and service equipment covers approximately two-thirds of the demand compared to one-third covered by imports. Sales of original equipment (OE) parts account for around 65% of the total components demand, while aftermarket (AM) sales account for 35%. Big multinational firms (many of them American with operations located in Italy) control the local tier-one parts market. The need for proximity to the manufacturer, delivery requirements, transportation costs, etc., makes it very difficult for firms not physically located in Italy to enter this competitive market. Many U.S. groups operating in the OE and AM sectors therefore have factories in Italy, including • American Standard Companies,

www.americanstandard.com • ArvinMeritor, www.arvinmeritor.com • Collins & Aikman,

www.collinsaikman.com • Dana, www.dana.com • Exide, www.exide.com • Federal Mogul, www.federal-mogul.com • Johnson Controls,

www.johnsoncontrols.com

• Key Plastics, www.keyplastics.com • Lear, www.lear.com • Mark IV Automotive,

www.markivauto.com • Tower Automotive,

www.towerautomotive.com • TRW, www.trw.com • Visteon, www.visteon.com, etc.

Imports are in general higher in AM rather than in OE, due to the development of modern distribution channels and transnational operators, improved performance of foreign automotive organizations and greater competitiveness of imported products. Products are imported from European countries like Germany (around one-third) and France (about one-fifth). Imports from the U.S. are relatively low, but interesting niches exist. Italy has one of the highest auto densities in the world, (and Europe’s highest) and one of the oldest circulating auto fleets in Europe, (about one-third is older than 10 years). Consequently, the budget and subsequent expenses related to maintenance repair equipment have continued to increase during the last few years. The higher frequency of periodic compulsory motor vehicle inspections and stricter pollution control regulations in Italy have forced the replacement of parts and the use of more modern service equipment than was common in the past. Furthermore, as the electronic systems on cars become increasingly sophisticated, service shops have to invest in new equipment and technologies to provide suitable maintenance. The new European standards on auto servicing, implemented in 2003, have opened some interesting prospects for independent repair professionals. Due to the new rules, the independent professionals are entitled to receive from car manufacturers any technical information and training needed to repair any kind of automobile. This may represent a significant market opportunity for Italy’s 50,000 independent repair professionals who, along with around 4,000 garages belonging to the official networks, make up the Italian auto repair industry.

All the car manufacturers have been recently forced by new, mandatory EU regulations to extend to two years the minimum period of warranty for cars. As a result, customers are utilizing official garage networks more than before, at least while the cars are under warranty. This strengthens the manufacturer’s relations with the customers and allows the manufacturer to generate more revenue, otherwise lost due to increasing competition in car sales. The aftermarket is characterized by two big trends: first, the so-called liberalization of the distribution allows the possibility of using spare parts “complying with the original”, and of “equivalent quality” to those made by manufacturers. This reduced the hold on the market by manufacturers. On the other hand, manufacturers reacted through the extension of the product warranty for up to five years. Warranty extension is one of the few marketing tools that manufacturers can use to differentiate their competitive offer. Due also to the fact that some experts believe there is little or no quality difference among the top brands and that non-genuine parts offer comparable quality at a lower price, part of the car manufacturers’ control of the market has been shifted to distributors and users. Many U.S. companies are active in the Italian auto repair and vehicle maintenance market, usually through local distributors, e.g. • Amrep, www.amrep.com • Assenmacher Specialty Tools,

www.asttool.com • Bear Engineering, www.cartek.com/ • Chief Automotive Systems,

www.chiefautomotive.com • Chicago Pneumatic, www.cp-com • Group 31 , www.31inc.com/

• Hockman-Lewis, www.hockmanlewis.com

• Hunter Engineering, www.hunter.com • Newen, www.newen.com • SpecTools, www.spectools.com/ • Sunnen Products Company,

www.sunnen.com.

Auto accessories and tuning sector. Interesting opportunities exist in the auto accessories and tuning sector, which is expected to remain stable (or even grow) in 2009. In general, companies operating in all the sub-sectors may expect to find buyers in the market, but the car audio and video/car entertainment sub-sectors present particularly interesting opportunities. One of the latest crazes for Italians is info-mobility, and many car owners are installing GPS satellite navigators. Tools such as navigators are quickly spreading into the consumer goods market, and are now available in most of the department stores. From dashboard GPS to fleet management solutions, the market is growing, and many U.S. manufacturers are already present here. Moreover, some opportunities will also arise for new-to-market companies offering cutting-edge new products. In sum, the market is growing and may be of real interest for U.S. manufacturers. Many U.S companies are already active in Italy, including • Garmin International, www.garmin.com • Navteq, www.navteq.com • Boston Acoustics,

www.bostonacoustics.com • Car Sound Exhaust System, www.car-

sound.com • Carrillo Industries, www.carrilloind.com

• Dynamic Control of North America, www.dynamat.com

• Harman/Becker, www.mybecker.com/ • K&N Engineering, www.knfilters.com/ • Phoenix Gold International,

www.phoenixgold.com • Goodyear, www.goodyear.com • Exxon, www.exxon.com.

Other U.S. companies are active in Italy in the auto care sector, such as:

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• Bardhal, www.bardhal.com • Valvoline, www.valvoline.com • STP, www.stp.com • Wynn’s, www.wynnsusa.com

• Cyclo, www.cyclo.com, • AutoMagic, www.automagic.com • Oil Eater, www.oileater.com, and • PowerService, www.powerservice.com.

LPG and CNG fuels: Another sector which may supply U.S. manufacturers with interesting opportunities is related to LPG and CNG fuels. Italy ranks second in the world in natural gas (CNG) vehicles after Argentina, and ranks first in Europe in regard to LPG vehicles. The alternative fuel field is expanding fast in Italy: overall there are more than 1,800,000 cars in Italy that already run on LPG or CNG, and are supported by around 3,500 specialized garages and 2,600 fuel pumps. In 2008, 350,000 cars were either converted from gasoline or bought as new cars already fitted for using CNG or LPG. There is also some interest for the hybrid-electric cars, with Anti-Particle Filters and for small cars with low CO2 emissions, which evidences the greater attention being paid to ecological cars and clean fuel. CNG and LPG vehicles are among the few vehicles currently allowed to circulate on any day, as they abide by all the stringent regulations implemented to limit the pollution in city centers in various Italian cities. Moreover, CNG and LPG vehicles’ consumption is often lower than similar gasoline or diesel fuel. As a consequence, most of the car manufacturers operating locally are trying to offer LPG and CNG versions of their cars, a market niche that is expected to account for five% of the total market in 2008, compared to 3.5% in 2007. Italian companies (e.g. BRC Gas Equipment, www.brc.it/default.aspx?&lang=en#, and Landi Renzo, www.landi.it/layout.jsp?idz=10073&idtp=151&lang=3) are among the world leaders in manufacturing and marketing components and systems for converting vehicles from gasoline to LPG and CNG. In December 2008, the Bologna Motor Show, a major international automobile exhibition, focused on alternative fuel technology for cars and eco-friendly fuel, and hosted the second edition of “EcoCity”, which included a vast display of components and accessories covering the entire sector for the conversion of vehicles to CNG and LNG, including both AM and OEM systems. “EcoCity” was an area where manufacturers of gas fuel kits exhibited the latest technology in CNG and LPG. Another major event held in 2008 that focused on LPG and CNG was the 2nd World Fair of NGV’s and H2Vs, which included both an exhibition and master conferences, held in Turin, Italy, September 25th-27th, 2008, www.ngvworldfair.com . Best Products/Services Best prospects include a range of passive and active security components/accessories, environmentally friendly features, diagnostic apparatus and light weight/acoustic insulation and advanced materials, as well as auto tuning components, info-mobility solutions, and equipment for LPG and CNG vehicles. In general, all products with high technology content can find opportunities in the Italian market. This is valid both for electronics and for accessories. As a rule, Italians are ready to consider new products and to pay extra money for something that is innovative and new. Fashion can also be an important decision factor in this sector. Currently, U.S. exports may also be boosted by the favorable exchange rate between the dollar and the Euro. Growth in U.S. auto parts, accessories, components and service equipment shipments to Italy is expected to experience a two% average annual increase for the next couple of years.

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Opportunities Public tenders: in the automotive sector, local transport authorities, police forces, etc., may issue public tenders for additional equipment, accessories and parts. Companies wanting to participate in bids are strongly encouraged to establish an organization in Italy to help them in dealing with the sometimes complicated public tender process. Resources Contact: Andrea Rosa (Mr.), Automotive Specialist, American Consulate General, U.S. Commercial Service Tel. +39/02/62688-523 (direct phone number) Fax +39/02/6596561 Andrea.Rosa@mail.doc.gov http://www.buyusa.it/ JAMAICA Overview The market for automobile parts and accessories is expanding. There is also increased vigilance by Jamaican authorities to monitor the quality of the imports coming in – this includes keeping an eye on imports from certain countries as well as the growing trend of importing used parts. There could be increased demand for high quality products approved by Jamaican Standards authorities. Although Jamaicans drive on the left hand side of the road, the United States remains an important source of automobiles, automobile parts and accessories. The auto parts and accessories market is, of course, closely tied to the automobile market. Prior to the mid 1990’s, there were severe restrictions on importing motor vehicles. After the restrictions were lifted, the sudden liberalized environment led to a big surge in the variety and number of motor vehicles imported. Best Products/Services • Wheel rims • Shock absorbers • Clutch parts

• Brake parts • Tires • Fancy accessories.

Resources Ministry of Commerce, Science and Technology www.mct.gov.jm KUWAIT Overview 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 (SUV) s 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. According to automobile importers, the expected growth for next 2–3 year is about 35%. The penetration of U.S. vehicles is higher in Kuwait than in other GCC countries. Kuwaiti youths enjoy the power and speed of American sports cars. Mustangs, Camaros, Corvettes, and other muscle cars are popular amongst the younger generation. Some have extensively modified these cars to the level of being track-worthy.

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Best Products/Services Large sized SUVs with heavy-duty shock absorbers, transmission, cooling and air conditioning systems and tires to meet extreme temperatures and road conditions. 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 DaimlerChrysler (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.-1.20 per gallon is propelling sales for SUVs and other vehicles that consume a lot of fuel. American auto part manufacturers or dealers will find opportunity for replacement and spare parts for SUVs and luxury automobiles made in the United States. In particular, components for engines, transmissions, brakes, air conditioning units, shock absorbers and tires. These products show extreme wear in current driving conditions and need regular maintenance or replacement. Modifications to increase suspension and chassis stability, horsepower output, as well as braking and aesthetics are highly sought after. Opportunities With summer temperatures reaching or exceeding 50 degrees Celsius (120 F), the wear on air conditioning, transmission systems, braking units and tires can be excessive. There is an excellent market in sheet metal and body repair, as small accidents are very common on highways and city streets. The auto parts market in Kuwait provides an excellent opportunity for U.S. firms to supply OEM and factory direct products to service the large number of Suburbans, Yukons, Jeeps, Chryslers, Ford and GM products. In addition to consumers purchasing American automobiles, the Government of Kuwait has exhibited a high propensity of buying the same for its police and military fleets. Resources CS Kuwait automotive industry specialist Xavier.muthu@mail.doc.gov. MEXICO Overview In 2008, the automotive industry experienced a significant and rapid decrease in profitability due to declining sales, increased competition, and the higher price of raw materials such as steel and oil. The slowdown of the U.S. and Mexican economies has resulted in dramatic changes in the industry and has forced automakers in Mexico to reduce their production. Market realities have led to new trends in car manufacturing, including smaller car sizes and increased fuel efficiency. Furthermore, the spare parts market will increase as used-vehicles are allowed into Mexico because of NAFTA. As a result, opportunities exist for U.S. exporters of spare parts, equipment and new technologies oriented to reduce costs. Mexico’s auto part industry is closely related to the U.S. industry. There are approximately one thousand auto parts manufacturers in Mexico and about 70% of these are subsidiaries of foreign corporations, mainly from the United States. Fifty eight% of the automobiles sold in Mexico are imported, of which 75% come from the U.S. Total production of vehicles in Mexico in 2008 was 2,102,801. Parts, equipment and first and second tier components from the U.S. have experienced an increase in exports due to increased Mexican production of new models that have shifted from U.S. assembly plants. The total market for auto parts in Mexico has shown a slight growth from 2007 to 2008 as per estimates. The economic outlook for

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2009 is for less growth. While estimates vary, the Mexican economy will likely experience a slight contraction, in contrast to 1.9% growth for 2008. Eduardo Solis, Chairman of the Mexican Auto Association, acknowledged that the industry’s situation would worsen in 2009 but expects that it should recover by the end of June. He added that production will fall by 20% during the first half of the year and that a similar decline is expected in sales. To offset the fall in sales, the industry and the government will have to work on other strategies to target niches in the domestic market. The industry might also ask the government to reduce taxes for purchasing and owning a car. Despite the decline in demand and production, many automotive companies announced large investments in Mexico last year. This is due to Mexico’s advantage in low labor costs and recent technological development in the auto industry. In addition, companies are looking for lower manufacturing and export costs. Best Products/Services • Spare and replacement parts for gasoline

and diesel engines • Collision repair parts • Gear boxes

• Drive axles • Catalytic converters • Steering wheels

In the first and second-tier supply chain sector, opportunities include: • OEM parts and components • Precision assembly devices • Machined parts • Hybrid vehicle components

• Suspension systems • Pre-assembly components such as small

and progressive stampings

Other products in demand include electronic components, specialized tooling, systems that eliminate waste and green technologies such as new combustion systems to reduce gas emission and oil consumption. Opportunities Given the economic slowdown, lack of financing, high interest rates and competition, the market has become more price-sensitive. In Mexico, 70% of new cars are purchased on credit. Because of the credit shortage, new car sales have decreased and many consumers choose to maintain their vehicles for a longer period of time. As a result, OEMs located in Mexico will continue to reduce production along with implementing strategic changes in their brand vehicles, including new technologies to make them more efficient and less expensive. The number of used vehicles being imported, especially after the NAFTA allowance for newer models, provides opportunities for exports of repair equipment and replacement parts. Effective January 2009, the Mexican government allows entrance of U.S. used vehicles. However, U.S. companies still face some barriers when exporting to Mexico. The most significant requirements include having a Certificate of Origin as well as a 10% tariff based on a minimum estimated price, or “reference price” for the given year, make, and model of the car. Importers of used vehicles must post a guarantee representing any difference in duties and taxes if the declared customs value is less than the established reference price. U.S. exporters are advised to work closely with their importers and customs brokers to ensure that all specific requirements are met. Participation in Mexican automotive trade shows provides excellent opportunities to introduce new products and services in Mexico.

Resources • State of Jalisco Auto-parts Distributors Association: http://www.rujac.com • The National Association of the Manufacturers of Buses, Trucks and Tractor Trailers: http://www.expotransporteanpact.com.mx • National Auto-Parts 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 Trucks Producers: http://www.anpact.com.mx • National Chamber of Cargo Transports: http://www.canacar.com.mx • For more information on the automotive parts and supplies sector in Mexico, please contact: • Ms. Monica Martinez, Commercial Assistant. Monica.Martinez@mail.doc.gov • U.S. Commercial Service, Mexico City. Tel: (011-52-55) 51402628 Fax: (011-52-55) 55661111 NETHERLANDS Overview Increasing competition, EU market expansion, changing regulations, technological innovation, environmental and safety concerns, and consumer demands are forcing suppliers of automotive products to work more efficiently. As suppliers and buyers are assessing and re-establishing their market position, many opportunities exist for U.S. suppliers that are able to provide competitively priced and/or innovative products. Details on the Dutch automotive parts and accessories market are included in a six-page report, covering issues like market trends, the import market, competitive situation, sales prospects, and market access. Best Products/Services The purchasing pattern for accessories and customers are generally positive about the quality of accessories - an exception being for audio equipment. 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. Bicycle racks, seat covers and 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 2010. Currently, this number lies at 40%. 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. Opportunities Universal garages are joining franchise chains or concepts in an attempt to increase the volume of work. On the other hand, dealerships concentrate on specific after sales concepts in an attempt to

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prevent older cars from going to universal garages. This is the result of growing gray area between the traditional brand-tied and the universal channels in the area of repair and maintenance. Cars of three years or younger went back to the dealer in the brand-tied channel while cars older than this found their way to a universal garage. The most important reason for this trend is increased competition for repair and maintenance work, increased technological complexity of car electronics, and changing legislation. The repair and maintenance of younger cars by universal garages is made possible by the availability of new generation universal testing equipment. This equipment enters the market more quickly and its quality is increasing. As the universal garages capture a greater share of the repair and maintenance market for young cars, the demand for this type of equipment will increase. Another trend is the vertical integration of importers and wholesalers. The roles of each party have become increasingly similar over the years and integration is driven by bulk purchase advantages, economies of scale, logistical advantages and the prevention of unnecessary transportation and double stocking. At the same time, horizontal integration is occurring among wholesalers. As a result, the future market will consist of fewer, but larger players. 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. U.S. supplier that offer products and services to help various parties in the distribution channel improve their service, thereby, capturing a larger market share, will find ample opportunities on the Dutch market. There are also growing opportunities for U.S. suppliers of specialty equipment. Resources Automotive Specialist’s email: Natasha.Keylard@mail.doc.gov NICARAGUA Overview Despite high fuel prices, automobile sales in Nicaragua continue to grow, increasing from 9,635 units sold in 2006 to 10,517 in 2007. Greater availability of financing has helped boost the demand for vehicles. Almost 76% of all vehicles sold in 2007 were Japanese brands. According to the Nicaraguan National Police there were approximately 372,000 vehicles in circulation in 2007 (56% in Managua), up from 290,000 in 2004. Because of unsafe and unreliable public transportation, a car is essential in Nicaragua for those who can afford one. There are approximately 15 well-known auto dealerships in Nicaragua, including for Honda, Hyundai, Peugeot, Mitsubishi, Kia, Nissan, Chevrolet, Taidok, Isuzu, Great Wall, and Land Rover. Several dealerships represent more than one brand, such as the local Mercedes-Benz dealership, which also represents and distributes Chrysler products. Two of the biggest dealerships in Nicaragua, which represent Toyota, also sell Lexus, Suzuki, and Daihatsu. There are approximately 163 used auto dealerships in Nicaraguan. Currently, there is one NAPA auto parts store in Managua, and there are many other auto shops that carry U.S. parts.

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Best Products/Services The most popular cars are small, four or six cylinder, and U.S., Japanese, or Korean models. Many people find four-wheel-drive vehicles very useful on Nicaragua's road system. High-ground clearance for speed bumps and potholes is also an asset. Good gas mileage is a priority for many consumers. There is also considerable demand for the servicing of vehicles, and spare parts are increasingly available on the local market. There is a high demand for heavy and light U.S. trucks, buses and sport-utility vehicles, as well as for tires for all motor vehicles. Vehicles with standard transmission are preferred over automatic transmission because of difficulties in servicing the former. Opportunities Except for a free zone company that is producing automotive wiring harnesses exclusively for export, there is no local production of automotive parts and accessories in Nicaragua. Good sales opportunities exist for virtually all categories of products in this sector. In 2007, there were 54 different automobile brands available in the Nicaraguan market, an increase of 35% compared to 2006. Resources Nicaraguan Association of Vehicles and Automotive Distributors: Tel: (505) 268-3861, 268-3743. Fax: (505) 266-4831. Email: andiva@hotmail.com POLAND Overview The market for automobile parts and components has grown significantly over the past several years. This trend will continue as the number of cars registered in Poland grows. Investments by some of the world's major car manufacturers (Fiat, General Motors-Opel, and Volkswagen) have significantly expanded the market for car parts. American automobile parts and accessories enjoy an excellent reputation for reliability and quality in Poland. There were over 14.5 million passenger cars registered in Poland as of December 31, 2007 (last official statistics available). This number is likely to grow to 16 million by 2010. The number of new cars sold in Poland in 2008 reached 320,040 (9.2% increase compared to 2007). The average age of a car in Poland is 14.3 years and this figure is growing. Over 68% of registered cars are gasoline fueled, 15% - diesel, 13% - LPG. There is no information available for the remaining 4%. In 2007 Poles imported 994,584 used cars, and in 2008 the number increased slightly to 1,103,970. Since Poland’s EU entry in May 2004, the number of imported used cars totaled 4.6 million units. The number of vehicles produced in Poland increases every year. In 2005 it reached 527,000; in 2006 – 608,191; in 2007 – 761,920; and in 2008 – 990,982. Fiat is the largest producer (53.15% of the market), followed by GM-Opel (19.9%), FSO and Volkswagen. Almost 97% of the cars produced in Poland are exported. Poles buy much smaller cars than Americans do and tend to keep them much longer. Unlike in the U.S., cars in Poland are almost exclusively equipped with manual gearboxes and diesel fuel engines are popular to a much greater degree. Poland has also attracted significant foreign capital investing in car parts production in Poland (Delphi, TRW, Gates, Lear, Suzuki, Goodyear, Michelin and others).

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After Poland’s accession to the EU on May 1, 2004, the duty for cars and car parts went down, adopting the EU external tariff. This resulted in increased imports from the U.S. New regulations introduced in the EU called “Block Exemption” (or in German GVO) concern the sales of new cars, service, and sales of car parts were expected to lower the prices of aftermarket parts and service. Poland fully adopted these regulations on November 1, 2004. These regulations will expire in the entire EU in 2010. The Polish automotive industry accounts for approximately 14% of Poland’s total exports and the share is increasing. The value of automotive parts exports is expected to reach $8870 million in 2008 and over $9500 million in 2009. As indicated by the figures above, the industry is expected to experience slower growth or even a decline in 2009 due to the economic crisis that has also reached Poland. Best Products/Services • Aftermarket parts • Service Station equipment Opportunities Investment - this sector has already attracted U.S. investors active in the auto parts industry in Poland, including: Delphi, TRW, Gates, Lear, Eaton, Federal Mogul, Tenneco, Visteon and others. These companies cooperate with local car manufacturers and export their products as well. Resources • Ministry of Economy. Web site: http://www.mg.gov.pl/ • American Chamber of Commerce in Poland. Web site: http://www.amcham.com.pl/ • Ministry of Infrastructure. Web site: http://www.mi.gov.pl • Polish Chamber of Automotive Industry. Web site: http://www.pim.org.pl/ • Automotive Technology Fair, Poznan. Web site: http://www.motorshow.pl/en • Samar – Automotive Market Research Institute. Web site: http://www.samar.pl/ Commercial Specialist, U.S. Commercial Service Joanna.Chomicka@mail.doc.gov PORTUGAL Overview The market for automotive accessories and specialty equipment in Portugal can be described as growing but fragmented; the overall market size has been growing slowly, and distribution channels largely consist of small importers. The presence of a vulnerable but stable auto industry sector makes the Portuguese auto aftermarket an interesting one for U.S. businesses to enter and explore. Although relatively small compared to neighboring Spain, it is the perfect market for product acceptance studies, serving as a gateway to enter other European markets as well as Africa. Information on the exact size of the specialty equipment market is not available. Specialty equipment falls under a broader umbrella covering tools, spare parts and services (auto repair) - an aftermarket valued at about $2.7 billion. This market is expected to continue to grow in the near future. According to local businesses, the specialty equipment and tuning market is valued at about $58 million, of which most of the revenues come from tuning European vehicles, followed by Japanese vehicles. A rough estimate indicates that U.S. companies capture about 8% of the

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specialty equipment and tuning market. VW, Audi and BMW are the most frequently tuned European cars, whereas Honda, Subaru and Toyota the most tuned Japanese cars. Acceptance of U.S. products and new technology in Portugal is very high and American brands are well received by local companies. U.S. companies active in Portugal rarely encounter significant barriers to market access. Portugal is also known for its developed infrastructure, efficient telecommunications, transportation and logistics. Importers and resellers are scattered throughout the country. Best Products/Services Best prospects include a range of passive and active security components/accessories, diagnostic apparatuses and light weight/acoustic insulation and advanced materials, as well as auto tuning components, audio and car entertainment, info-mobility solutions, car care products and automotive chemicals. In general, all products with high technology content can be placed into the Portuguese market. This is valid both for electronic apparatuses and for accessories. All U.S. companies that can promote the quality of their products and at the same time competitive prices may benefit from access to this market. As a rule, the Portuguese are ready to take into consideration new products and pay extra money for something that is, or seems to be, innovative and new. Also, U.S. exports may be boosted by the current (still favorable) exchange rate between the dollar and the Euro. Growth in U.S. auto parts, accessories, components and service equipment shipments to Portugal is expected to exceed 10% (average annual increase) for the next couple of years. Opportunities Demand for this product category is slowly growing in Portugal, highlighting the increasing interest in areas such as audio/video entertainment and security products. The estimated market value for specialty equipment and accessories is about $58 million. Future demand is expected to stay at current levels. The only threat that may affect the growth rate for specialty equipment and accessories is bureaucracy and lack of specific regulatory guidance, which has been one of the main hurdles for automotive specialty products promoters in Portugal. On the other hand, this lack of specific regulatory guidance, combined with an increased interest in automotive specialty products, is considered by some specialists as an opportunity to promote and further develop the market. Resources • Pedro Ferreira – Commercial Specialist. http://www.buyusa.gov/portugal/en/our_team.html • Associação de Fabricantes para a Indústria Automóvel. http://www.afia-afia.pt/ • Associação de Comércio Automóvel. http://www.acap.pt/ • Associação Nacional das Empresas do Comércio e da Reparação Automóvel.

http://www.anecra.pt/ ROMANIA Overview A. Automotive Industry The Romanian automotive industry has been one of the most profitable branches of the economy in recent years. In 2008, the industry was subject to certain changes due to the international economic downturn. Consequently, in 2008 a total of 324,080 units were sold, (-11.7%) out of which 270,995 (-14.1%) were passenger cars, 48,920 (+2.0%) commercial vehicles and 4,165 buses (+28.7%).

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Local production. Romanian local production increased 1.5% across the board reaching a total volume of 245,308 units in 2008. However, the level of car production was below expectations (-1.3% against a volume of 231,056 units). The gains were accounted for by the production of commercial vehicles, which registered a significant increase of + 87.4% (13,964 units). Taking into consideration that two-thirds of the domestic production was exported, it follows that the domestic production was supported mainly by external demand, reaching a total of 156,098 units. Export. In 2008, Renault Dacia was one of the best performers on the European market Its exports increased by 26.0% (156,098 units), and Romania continued to be one of the main car-producing countries of Eastern Europe, with Poland, Hungary, the Czech Republic, and Slovakia. Import. The import of motor vehicles slumped 6.6% in 2008, reaching only 232,555 units, which included a 7.7% drop in car imports (189,050 units). Another significant decrease was in sales of imported diesel cars, which at 18.3% declined faster than the overall decline in car imports. Import of commercial vehicles. A total of 39,352 units were imported in 2008 which indicated a 3.9% decrease against 2007. Also, the decreases in car imports over the three months of the last quarter of 2008 against the same months of 2007 were perceived as a negative signal. This erosion culminated in December with a decrease of -65.4% compared to 2007. Nevertheless, there were segments where imports marked an increase; light commercial vehicles (26,458 units / +2.4%) and commercial vehicles overall (2,485 units / +3.5%) rose modestly. Romanian Car Market Segmented by Brands: Romania’s affinity for European brands, especially French and German, is evident in the relative market shares, and underscored when one realizes the ownership relationships and cooperation between Renault-Dacia and Volkswagen-Skoda. •Dacia led the market in volume with a total of 84,709 units sold (26.1% market share) •Volkswagen with 23, 887 units sold (7.4% market share) •Skoda with 23,189 units (7.2% market share) •Ford with 22,139 units sold (6.8% market share) •Renault with 22,073 units (6.8% market share). Passenger Automobile/Car market Overall, this segment registered a decline of 14% by the end of 2008, tumbling to 270,995 units. Even this percentage decrease masks a dramatic collapse in the last month of 2008, when sales decreased 53.0% year-on-year over December 2007. The market appeared to reward some brands and punish others, though it is important to note that some of these dramatic changes start from very small bases. The brands that grew the most included Mazda (190%), Cadillac (171%), KIA (156%), Suzuki (98%), Maserati (86%), Jaguar (84%), Subaru (61%), Lancia (53%), Mini (37%) and Smart (30%). In contrast, the most dramatic annual declines were registered by Geely (-90%), Daewoo (-58%), SsangYong (-51%), Great Wall (-49%), Chrysler (-43%), Alfa Romeo (35%), Renault (-34%), Citroen (-28%), Chevrolet (-27%) and Peugeot (-27%). Commercial vehicles. Despite the 2.0% (48,920 units) overall increase registered at the end of 2008, this segment also experienced its worst month in December 2008, when sales fell 61.1% from December 2007. This drop was a clear reflection of the financial downturn evaporating big ticket purchases, and perhaps establishing a new floor on commercial vehicle sales.

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Conclusions. The Romanian auto market contracted as world economic conditions dried up access to credit, and a weakened local currency made borrowing in euros cost-prohibitive. Sales of domestically produced new motor vehicles took a second blow between July and December. A change in the tax on new vehicle registrations removed a disincentive in the used automobile market, to which consumers responded by importing or purchasing used vehicles, fueling a 143% rise. The Romanian auto industry makes up 8.5% of GDP and is a major manufacturing employer. Ford Motor Company’s purchase of a factory in Craiova represents a major new investment in the industry. The Romanian Government is expected to adopt additional policies aimed at encouraging the purchase of new vehicles -- and replacement of used vehicles -- with lower emissions through measures such as a pollution tax. A “scrapping bonus” has been in place for several years in order to boost new car sales by paying a rebate to consumers who scrap cars more than ten years old and purchase a new car. This program is intended to replace up to 60,000 cars (approx. 22% of the market) B. Automotive Parts Not surprisingly, the local manufacturers and suppliers of automotive parts have been affected by the auto industry troubles, and many Romanian suppliers face the prospect of cutting back production and workforce, in order to survive the first part of 2009. These companies are both direct parts suppliers to Dacia – Renault (which temporarily stopped its production for a month and a half in December 2008 and January 2009) and of various other European automakers. In addition to OEM Dacia, the following auto suppliers have announced job cuts: Draexlmaier (electrical systems), Divertex (car wiring for Renault), Automotive Complete Systems (supplier to Ford), Ana Imep (equipment), Yazaki (wiring), INA Schaeffler. Rolem SA Codlea (supplier to Mercedes), Eybl Automotive (seat covers and autotextiles). However, if Romania can preserve its OEM manufacturing base, including new capacity with Ford’s plant, American automotive parts suppliers will want to monitor the market closely, and consider a business presence in Romania. Resources • Corina Gheorghisor, U.S. Commercial Service. E-mail: Corina.Gheorghisor@mail.doc.gov • Automotive Manufacturers and Importers Association (APIA) http://www.apia.ro/en/index.php RUSSIA Overview Russia represents a large potential market for new cars as well as automotive and aftermarket parts, equipment, supplies and services. The current rate of car ownership in Russia is 180 per 1000, only 25% of the U.S. rate. The total Russian motor vehicle fleet is estimated at 38 million units, including 28 million cars. For the past few years, Russia has been Europe’s fastest growing automotive market and one of the fastest in the world growing at an annual rate of 20% to 25%. In 2008, ahead of automotive analysts’ projections, Russia surpassed Germany to become the largest market in Europe. By 2012, analysts project that Russia’s car market will be the third largest in the world, after the United States and China. New car sales increased from 1.7 million in 2007 to 2.1 million in 2008. The import market for used cars and trucks is also growing. At the end of 2008, the pace of new

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car sales began to slow as a consequence of uncertainty related to the global economic crisis. Even if the market slows in 2009, the market for car components and aftermarket replacement parts will remain favorable as domestic manufacturers cannot produce the quality parts required by modern cars. In January 2009, the Russian government introduced increased import tariffs on used cars in order to support the domestic automotive industry and foreign assembly projects in Russia. It is expected that sales of used cars will decrease considerably in 2009; however, the higher tariff is due to expire after nine months. The Russian auto industry represents a major force in the domestic economy. Russian vehicle assembly and component manufacturing factories remain plagued by outdated equipment, lack of modern technology and inadequate management. The major local automotive market players include: GAZ Group; Sollers, a former subsidiary of the leading Russian steel producer Severstal; and AutoVAZ, currently controlled by the state-owned Rosvooruzhenie and Renault (25% equity). The majority of component manufacturing assets are owned by SOK Group. There are several projects underway to assemble foreign cars in Russia; these involve Ford, GM, Toyota, VW and Renault. Ford’s plant commenced operations in July 2002 in a suburb of St. Petersburg. High demand for the new Ford Focus made Ford one of the sales leaders in 2008 with almost 100,000 vehicles sold. The GM-AvtoVAZ joint venture manufactures the Chevrolet-Niva SUV in Togliatti. In November 2008, GM opened a $300 million assembly plant in St. Petersburg which is projected to make 70,000 Chevrolet and Opel crossovers annually. In 2005, Renault started manufacturing 70,000 Logan vehicles at a Moscow-based facility. In December 2007, Toyota launched an assembly facility in St. Petersburg to manufacture 50,000 Camry vehicles annually. Volkswagen/PSA opened a plant in Kaluga in 2008. There are also several other less well-known projects: the Russian company SOK assembles 40,000 KIA Spectra in Izhevsk; Sollers set up assembly of Ssang Yong SUVs and Fiat low-cost sedans in Yelabuga; Hyundai has a joint venture to assemble several models with TagAZ. Several other international projects are under construction, including Nissan, Suzuki and Hyundai plants in St. Petersburg. There are also truck and bus assembly projects in Russia developed by Scania and Volvo. International Truck and Engine Corporation assembles trucks in St. Petersburg. The major obstacle to successful development of foreign assembly projects in Russia is the lack of local component suppliers. Best Products/Services Components for engines, steering, brake systems, power trains, and interiors; engines themselves, seats, tires, specialty equipment for cars, aftermarket parts, supplies, services, and tuning. Opportunities Local manufacturers of automobiles and trucks often seek qualified local vehicle part suppliers as several government decrees have mandated an increase in foreign investors’ local content within a set time period. This presents opportunities for lower tier U.S. automotive component manufacturers able to supply upper tier manufacturers with the parts required by international firms with high quality control standards. Local automobile manufacturers will still need to source much of their parts and equipment from outside Russia due to a lack of local production or insufficient quality of locally made products. This too may present opportunities for U.S. exporters, keeping in mind that there is significant competition from European and Asian suppliers.

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Another good prospect is to supply upgraded equipment and technology to Russian manufacturers. Opportunities also exist in the licensing and transfer 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 have strong sales in Russia. Some of the “Made in the USA” products, which Russian motorists seem to favor, are lubricants, automotive chemicals and off-road accessories. There are no known trade barriers affecting imports of U.S. automotive products; tariffs for many imported spare parts are a relatively low 5%. The most important factor affecting the sales growth of U.S. aftermarket products in Russia is the need for U.S. exporters to share brand-building risks with local distributors. Small and mid-size suppliers of specialty equipment for cars will be competitive if they are aggressive in their market entry and brand-building actions. Resources Organizations • National Association of Automotive Component Manufacturers (NAPAK) www.napak.ru • Association of Automotive Manufacturers of Russia (OAR) www.oar-info.ru • St. Petersburg Association of Automotive Component Manufacturers (SPbAPAK) www.spbapac.ru • Association of European Business www.aebrus.ru • U.S. Commercial Service - Europe Automotive Team www.buyusa.gov/europe/automotive.html Publications • ASM-Holding www.asm-holding.ru • Autobusiness www.abiz.ru Commercial Service Contact Alexander Kansky, Commercial Specialist. Alexander.Kansky@mail.doc.gov Office Tel: 7 (812) 326 2560 or 7 (812) 331-2600 SAUDI ARABIA Overview Saudi Arabia is the largest market for automobiles and trucks in the Middle East. Over the years, U.S. manufacturers have witnessed their market share steadily eroding to Japanese and South Korean manufacturers. Toyota alone now has a 40% market share. More than 700,000 cars, trucks and vans are annually imported into Saudi Arabia, including used cars and buses. A higher per capita GDP, $18,537, will further enhance the demand for new cars and vans. The higher value of the Euro and the Yen against the U.S. Dollar has had little effect on the share of European car sales, which now enjoy nearly 18 % of the market. Japan, the United States, Australia, Germany, and South Korea are the key players in the Saudi automotive market representing more than 80% of all vehicle imports. The strength of the Saudi economy, has led to the increasing popularity of luxury cars and premium automobiles. In addition, Saudis have always opted for large SUVs that can accommodate large families. The market for the GMC Suburban and similar sized SUVs has remained relatively unaffected by the fluctuations in the economy.

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Manufacturers of premium cars that have a good share of the Saudi market include, Lexus, GMC, Mercedes, BMW, Porsche, Mini Cooper, Infiniti, and Rolls Royce. For American cars, the Crown Victoria commands the leading position followed by the Caprice and the Lumina. Used Car Market. The used car market in the Kingdom is considered the largest in the region with huge financial returns that reflect positively on the national economy. As many as 1,300 used car showrooms in Jeddah and Riyadh share the largest market for used cars in Saudi Arabia. The market for imported second-hand automobiles is generally comprised of vehicles over 300cc, and average running life of up to four years. The market for second-hand vehicles is largely sourced from the United States, and to a lesser extent from Germany. The Saudi market for second-hand automobiles consists of two distinct segments; the one based on imported, reconditioned passenger cars and four-wheel drive jeeps, and the other one based on the selling of locally registered vehicles, which were previously imported. Demand for second-hand vehicles has been shrinking annually by an average of 4%, due to the availability of financing and leasing options and increased purchasing power. Currently, industry sources estimate that close to 70,000 units are being imported every year, but expect that figure to come down to 50,000, especially for passenger cars and SUVs. The market demand however, for new automobiles is affected by the import of the secondhand or reconditioned passenger cars and jeeps as they are sold at very competitive prices to customers, who want to buy fairly good models at significantly lower prices. Automobile Parts. Saudi Arabia is still the largest automotive market in the Near East. Saudi Arabia imported more than $650 million worth of parts and service equipment in 2008, and the market for parts and service equipment should remain relatively strong. Consumers continue to maintain and fix any deficiencies with their cars and SUVs before exchanging them for newer models or selling them to used car dealers. Parts are mainly sourced from Japan, the United States, Australia, Germany and South Korea. There are over 350 dealers supplying automotive parts for U.S., Japanese, European, Australian and Asian automobiles in Saudi Arabia. Tire Market. The automotive tire industry offers unique insights into a popular Saudi industry. Interestingly, the Saudi market relies completely on imported tires – there are currently no tire production plants in the country. As such, there are good opportunities for U.S. exporters in the Saudi tire market. The Saudi automotive tire and inner tube market is the largest in the Middle East, both in terms of value and volume. In 2008, Saudi tire distributors imported more than $773 million worth of automotive tires and inner tubes. Japanese manufacturers topped the list of suppliers with a 41% share of the Saudi import market, while U.S. companies came in fourth place after South Korea and China. All imported tires are required to meet applicable standards established by the Saudi Arabian Standards Organization (SASO). Additionally, all tires require a certificate of origin. The customs duty for imported tires is currently 5%. Industry sources estimate that more than 13 million tires are imported annually, and that rate is expected to grow an average of 12% annually. In 2008, Saudi Arabia imported tires and inner tubes for passenger cars, trucks and buses valued at $773 million. The imported tire market is expected to reach $800 million in 2009. There are approximately 60 tire brands sold in Saudi Arabia, half of which are well-known brands sourced from companies in the U.S., Japan, South Korea, China, Indonesia, Turkey, India and Europe. U.S. companies command a leading position in the supply of transmission, steering, suspension, and braking components and parts. The favorable U.S. dollar exchange rate against the Euro and Japanese Yen is boosting the U.S. market share. Nonetheless, Japanese car manufacturers and spare parts suppliers still command the lion’s share of the Saudi market with more than 40%.

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There are a number of local factories that manufacture filters, radiators, batteries, exhaust systems and converters. Although some spare parts are manufactured locally under license, the bulk of automotive parts are imported. The new foreign investment law encourages foreign companies to establish industrial and non industrial ventures in Saudi Arabia. Best Products/Services • Tires manufacturing plants • Service equipment • Body and chassis parts

• Automobile transmissions and spare parts • Auto chemicals • Car Batteries

Resources • Ministry of Economy & Planning-Central Department of Statistics & Information http://cds.planning.gov.sa/statistics/sindexe.htm • www.cars.dir.com • www.aljomaihauto.com • www.aljazirahford.com • www.alj.com • www.zawya.com SLOVAKIA Overview With approximately 800,000 cars produced annually, Slovakia is the largest producer of automobiles per capita in the world. Automobile manufacturing includes: • Volkswagen Slovakia in Bratislava: (Models: Seat Ibiza, Golf, Polo, Audi Q5, Audi Q7, Toureg

and Skoda Octavia); production capacity of up to 300,000 units per year; • PSA Peugeot Citroen Slovakia in Trnava: (Models: Peugeot 207, Peugeot 207 van); production

capacity of up to 500,000 units per year; • KIA Motors Slovakia in Zilina: (Models: Hyundai Tucson, Kia ED, Kia CEED, Kia Sportage);

production capacity of up to 300,000 units per year. The benefits of Slovakia’s geographic location include its proximity to auto plants in other countries. There are approximately 12 automobile manufacturing plants within the Slovak and Czech Republics, Poland and Hungary. Today, some Slovak Tier 1 suppliers provide just-in-time shipping, not only to plants located in Slovakia, but also to manufacturing facilities in neighboring countries. There are about 241 automobile suppliers in Slovakia. The majority of them (more than 120) are in western Slovakia, close to the automobile manufacturers. More than 83 suppliers are located in central Slovakia and 34 are based in eastern Slovakia. Eighteen of the 100 largest world automotive suppliers are already present in Slovakia. • Automobiles and Motorcycles. Consumer demand for automobiles is expected to show

steady growth over the next five years. U.S. made cars and motorcycles have found a niche market in Slovakia. Cadillac, Corvette, Hummer and Harley-Davidson all sell vehicles through local dealerships.

• Automobile Parts and Aftermarket Products. Skoda of the Czech Republic sells the most

automobiles in Slovakia, followed by PSA Peugeot Citroen, KIA, Ford and Opel. U.S. automobile aftermarket products such as in-car entertainment, automobile security equipment and car care items are all good prospects on the Slovak market. .

• Education and Training. Even though employment in the automotive sector is growing

rapidly and there is an abundance of blue-collar workers, Slovakia needs more qualified technical professionals for its car producers and their suppliers. Slovakia has experienced difficulty in finding electronic and technical engineers, designers, quality controllers, logisticians, purchasers and maintenance staff who speak at least one foreign language. Investors realize the need to have a new, properly educated talent pool with appropriate knowledge of sophisticated technologies, new trends and processes, and foreign language skills. Suppliers of training programs that focus on technical skills and foreign language ability will find opportunities in Slovakia.

Resources • Automotive Industry Association of the Slovak Republic www.zapsr.sk • Ministry of Economy of the Slovak Republic www.economy.gov.sk • Slovak Statistical Office of the Slovak Republic www.statistics.sk SLOVENIA Overview A long tradition of car manufacturing in Slovenia has resulted in a substantial number of companies in related markets. While the largest auto company, Revoz, produces cars solely for French auto company Renault, there are companies addressing very specific niche markets such as racing exhaust systems manufactured by Akrapovic. Slovenia also has several companies producing car parts, primarily seats, and recreational trailers and campers. Since this is a large industry in Slovenia, there exists significant opportunities in supplying parts and raw materials, as well as new technologies and robotics. Best Products/Services • Cars • Seats and spare parts for seats • Spare parts and interior materials • Automobile parts • Spare parts for braking systems • Moving parts for engines

• Steering systems and parts for them • Manufacturing of tools for automobile

industry • Research and development in the sector

Opportunities Intensifying Slovenian business links with the Serbian automobile market led to increased demand for Slovenian products in the sector. Slovenia’s automobile cluster announced plans to initiate similar efforts in the markets of Ukraine and Russia. Resources: • Ministry of Economy, Kotnikova 5, SI- 1000 Ljubljana, Slovenia.

E-mail: gp.mg@gov.si, http://www.mg.gov.si/en/ • Chamber of Commerce and Industry of Slovenia, Dimiceva 13, 1504 Ljubljana, Slovenia.

E-mail: info@gzs.si, http://eng.gzs.si/slo/ • Automotive Cluster of Slovenia, Dimiceva 9, 1000 Ljubljana, Slovenia

E-mail: info@acs-giz.si, http://www.acs-giz.si/ang/home.asp • U.S. Commercial Service, Mr. Matjaž Kavčič, Senior Economic Commercial Specialist

Phone: +386 1 200 5644 Fax: +386 1 200 5555, Email: KavcicM@state.gov

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SOUTH AFRICA Overview The automotive industry is the leader in the manufacturing sector in the South African economy, accounting for about 7.5% of GDP, a contribution that is growing annually. Although the industry is responsible for only 0.8% of the world’s vehicle production (66-million units), it produced over 75% of Africa’s vehicle output. • Total Market Size represents new and used vehicle sales, workshop revenue, spares, accessories

and other trading revenue • Total exports represents the total value of both components and vehicles in terms of the Motor

Industry Development Program (MIDP) • Total imports represents the total value of imports of both components and vehicles in terms of

the MIDP • Imports from the U.S. also reflects the value of components and vehicles Imports of automotive components have risen dramatically, from 32.2% of the domestic market in 1994 to 47.3% in 1998. These trends were linked directly to the South African Government’s incentive policy for the automotive industry: the Motor Industry Development Program (MIDP). In September 2008, the South African Government approved the new Automotive Production and Development Program (APDP) which replaced the MIDP. The APDP aims to stimulate growth in the automotive vehicle production industry to 1.2 million vehicles per year by 2020, with associated strengthening of the components industry. This program would have the following four key elements: • Stabilize and moderate import tariffs from 2012, pegged at 25% for completely built-up

vehicles, and at 20% for components used by vehicle manufacturers; • Establish a local assembly allowance, to be introduced in 2013, allowing manufacturers with

plant volumes of 50 000 units a year or more to import 20% (reducing to 18% over three years) of their components duty free;

• Set a production incentive, from 2013, in the form of a duty credit aimed at raising production; Provide for an automotive investment allowance, to be introduced in 2009, in the form of a direct grant to support investment in new plant and machinery. This would amount to 20% of the project value over three years.

Automotive Parts & Components. Overall, South Africa has been one of the best performing automobile markets in the world in recent years. New vehicle sales figures soared to record-breaking levels from 2004 to 2006. In 2006, sales increased by 14.4% to just under 650,000 units, generating revenue of $14.8 billion. Sales then dropped by 5.4% in 2007, and as Country Commercial Guide for South Africa 2009 expected, dropped further in 2008 as adverse economic conditions, higher interest rates and rising fuel prices curbed spending. The National Automobile Association of South Africa (NAAMSA) noted that sales of new vehicles declined to 488,951 units in 2008, versus 612,708 in 2007. However, exports may help keep the local industry buoyant. Vehicle exports amounted to 170,000 units in 2007, and the NAAMSA projected an increase to 285,000 in 2008. This is extraordinary growth, especially when compared to 1997, when the number of units exported was below 20,000. • South Africa currently exports vehicles to over 70 countries, mainly Japan (around 29% of the

value of total exports), Australia (20%), the UK (12%), and the US (11%). African export

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destinations include Algeria, Zimbabwe and Nigeria. The top 10 automotive parts and component imports are:

• Engine parts • Automotive tooling • Tires • Stitched leather components • Gauges/instrument parts

• Brake parts • Catalytic converters • Transmission shafts • Car radios • Lighting equipment

Automotive Aftermarket: Specialty Equipment. Demand for automotive specialty equipment and accessories has grown rapidly in South Africa. The market is estimated at $2-$2.5 billion. Over the last eight years, 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 and accessories with little regard to price. In this lucrative segment, South Africans are highly receptive to U.S. brands and often follow trends set in the U.S. The large number of model derivatives imported has widespread implications for the aftermarket, which represents an opportunity for U.S. companies. Further, there is a lack of telematic components that are essential for inflating airbags, the facilitation of security and control of tracking devices, and the control of engine/transmission functions. These functions demand more and more sensors, making repair difficult and expensive. Industry sources predict significant growth in the proportion of new cars that will feature automotive telematics. Electronic systems account for as much as a third of the manufacturing costs of new cars and the proportion is increasing – yet another opportunity for U.S. technology to develop in the South African automotive component market. A constant need to distinguish and individualize vehicles creates opportunities for U.S. suppliers of automotive 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; and xenon light kits. Best Products/Services Auto Parts/Accessories • Airbags and Airbag Packs • Air-Conditioning Compressors • Engine and Engine Components • Center Consoles • Chassis Modules and Components • New Generation Manifolds • Aluminum Forging and Castings

• Instrument Panels • Metal Substrates • Electric Power Assisted Steering Wheel • Plastic Moldings and Paintings • Leather Products • Body Parts • Electronic Components

Aftermarket • 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

SOUTH KOREA Overview In 2008, Korea manufactured 4 million automotive vehicles, making it the fifth largest car manufacturer in the world after Japan, the U.S., China, and Germany. The total size of the automotive parts market was estimated at $36 billion in 2008, a 21% drop from 2007. The OEM market segment accounted for about 94% of total market demand and the aftermarket approximately represented the remaining 6%. Imports decreased to $3.9 billion in 2008 from 4.0 billion in 2007 to account for 11% of the total market demand. The drops in 2008 statistics are mainly due to the substantial KRW depreciation against USD. When looked at on KRW basis, the market has experienced a nominal 3% decrease overall. In the import market, Asian countries including Japan are the principal exporters to Korea, accounting for 48% of total imports. The EU and North America follow Japan with a 38% and 12% market share, respectively. Major U.S. export items for the OEM market include gear boxes, wheels, steering parts, and engine parts, among others. For the aftermarket, road wheels, spark plugs, and ignition cables, among others, are well received U.S. products. 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 the planned launch of Kia Motors’ Georgia plant in 2009 will accelerate this trend. Best Products/Services • 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 cars, fuel cell cars, and other low-emission related technologies • 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 • Accessories, like window films Opportunities 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 Korean automaker 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 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.

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SPAIN Overview Since the mid-1990s, car customization, or “tuning” as it is known among enthusiasts, has become an increasingly popular trend in Spain. The “tuning” sub sector is heavily influenced by trends from the United States. As such, Spanish distributors and consumers of “tuning” accessories are interested in products from the United States—especially exhaust pipes, self-adhesive appliqués and lighting and signaling equipment (including light-emitting diodes, or LEDs)—based on their reputation for quality and reliability. In 2008, a delegation of 160 Spanish firms attended the AAIW SEMA Show in Las Vegas (http://www.semashow.com/). The SEMA Show, the largest aftermarket trade show in the U.S., is internationally renowned, especially in Spain, and offers the latest innovations in the automotive industry. Currently, one third of Spain’s 24.6 million automobiles are more than 10 years old. With a large number of old automobiles in circulation, there is a growing need for properly-equipped auto shops that can meet the demand for repair and maintenance services. The rapid and steady growth of the automotive and aftermarket sector in Spain, combined with the solid reputation of U.S. automotive repair and maintenance equipment, should enable U.S. manufacturers to maintain and improve their position within the local market. Projections indicate that imports of automotive and aftermarket products from the United States will grow 10% over the next three years as highly technical/computerized equipment (mainly diagnostic and electronic equipment) becomes a standard feature of repair shops. Industry association representatives are optimistic about growth in the repair and maintenance equipment market. Emerging trends -the aging of existing automobiles, stricter enforcement of government technical inspections, new laws and structural changes aimed at market competition and consumption of new vehicles - will encourage market demand for auto repair and maintenance equipment making it one of the most attractive sub sectors in the automotive industry. These factors are expected to stimulate an average annual growth of 10 to 15% in total market size in the next few years. Resources U.S. links: SEMA (Specialty Equipment Market Association): www.sema.org Spanish links: ANFAC (National Association of Automobile and Truck Manufacturers): http://www.anfac.es Cámaras (Spanish Foreign Trade Statistics): http://aduanas.camaras.org SERNAUTO (Spanish Association of Equipment Manufacturers for the Automotive Industry), http://www.sernauto.es/ Commercial Service Spain: www.buyusa.gov/spain Trade Specialist Carlos Perezminguez: carlos.perezminguez@mail.doc.gov SWAZILAND Overview Swaziland registered 5241 vehicles in 2006 The rate of new registrations has been fluctuating for the past 3 years partly due to the rate of exchange of the rand to the dollar. There has been an influx of second hand vehicles from the Far East in the last three years. Unfortunately the numbers for these vehicles are not available.

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Best Products/Services U.S. suppliers/manufactures will find a market for passenger vehicles and road tractors for semi-trailers. Opportunities Swazis recognize the U.S. as the world leader in truck manufacturing and recently Swazi buyers have been looking more seriously at U.S.-manufactured trucks. SWEDEN Overview Sweden, with a population of about 9 million, had 4.3 million cars in 2007. This corresponds to one car to every 2.2 people. The number of commercial vehicles was 517,000. The total import of automotive parts and accessories (HS 87.08) was worth $6.6 billion in 2007. Major supplying countries were Germany (34%), Belgium (10%) and France (7%). US suppliers accounted for 2% of the import market. Best Products/Services 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% by the year 2020. In 2007, there were 55,000 new environmental vehicles registered which is an increase by 50% compared to 2006. 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. Another sector of interest is specialty vehicles. Customizing cars is a hot trend. Many Swedes consider the U.S. to be a leading country when it comes to styling and tuning their cars. The most popular products in this sector are tires and wheels, lowering kits, exhaust systems, body kits, spoilers, lighting equipment and stereo equipment. Resources • Trade Organizations: Scandinavian Automotive Suppliers

http://www.fordonskomponentgruppen.se/ • The Association of Swedish Wholesalers of Automotive Parts and Accessories

http://www.bildelsgrossisterna.se/ • Commercial Trade Specialist: Hakan Vidal hakan.vidal@mail.doc.gov SWITZERLAND Overview The total Swiss market demand for automotive parts, equipment and accessories was estimated to be $1.24 billion in 2008. The Swiss economy is projected to grow by 0.2% in 2009, in line with

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government calls of a recession. Industry sources predict less than 1% growth in market demand for auto parts, accessories and aftermarket products in 2009 due to the economic crisis. Consumers are expected to spend less on the purchase of new automobiles and accessories in order to weather the economic woes. Imports from Germany have traditionally had a solid market share, capturing 48% of the market, followed by France with 13% and Japan with 12%. In the past few years, U.S. imports have had a market share of 4.5% and were estimated at $49 million in 2008. Demand for U.S. imports is expected to grow marginally as Swiss importers and distributors feel the pinch of the economic crisis. The low Swiss franc versus the U.S. dollar nonetheless makes U.S. products competitive and affordable for Swiss consumers. U.S. suppliers should carefully evaluate their pricing and sales terms to remain competitive. Overall, Swiss automotive market demand, including sales of new and used automobiles and trucks, gasoline stations, repair and service facilities and providers of related services amounted to $68 billion in 2007, reflecting the market’s importance in the Swiss economy. The overall car fleet in Switzerland is assessed at 3.8 million automobiles and is not expected to grow significantly over the next two years as a result of higher retention rates of automobiles and the forecast downturn of automobile sales in 2009. Although Switzerland does not manufacture automobiles, it has more than 300 enterprises involved in the production parts, components and systems for carmakers around the world, employing more than 35,000 people. Lay-offs in this industry sector are expected in 2009 as the economic picture is set to deteriorate. The Swiss automotive market was liberalized on January 1, 2005, giving consumers greater choice in buying new automobiles. Many Swiss car dealers and repair facilities note that liberalization is bringing more competition into the market and is beginning to put downward pressure on prices. U.S. automobiles garnered only a meager 1% market share in 2007. The worldwide automobile crisis is forecast to send Switzerland’s car sales into a downward trajectory, which already started in November 2008. Automobile importers are anticipating a total sales volume of 270,000 in 2009, which constitutes a downturn of 5%. Best Products/Services As economic growth is forecast to grow by 0.2% in 2009, consumer demand for luxury items, including hi-fi equipment, aluminum wheel rims, wider tires, etc. is expected to grow marginally. 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. Resources • Swiss Federal Roads Authority: http://www.astra.admin.ch/ • Swiss Motor Trade and Repair Association (AGVS): http://www.agvs.ch/ • Commercial Specialist Sandor Galambos sandor.galambos@mail.doc.gov TRINIDAD AND TOBAGO Overview The importation of automotive parts and service equipment is moderate in Trinidad and Tobago. Most vehicles are imported from Japan and Europe. Because T&T is right-hand drive, models and parts often differ from those sold for U.S. versions. However, because of proximity to the U.S. and brand familiarity, distributors prefer U.S. sources when they can get matching parts, supplies

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and accessories. Total imports in 2004 were $164.0 million. In 2005 the amount grew by 2%. Total imports from the U.S. were $9.0 million in 2004 and $9.1 million in 2005. This represents a market share of a little over 5% for the U.S. for all three years. Best Products/Services Vehicle tires with HS code 401.11.000 and 401.12.000 are listed in the top 100 items imported into T&T. Motorcar batteries also represent a business opportunity. Although a local company, Automotive Components Ltd., manufactures batteries, a large number are also imported. Lubricants and other accessories, like care products, lights and other parts, are possible opportunities for U.S. exporters. T&T auto dealers are showing increasing interest in the annual automotive after-market show held in the U.S. Over the past five years in T&T, stiff competition in the automotive industry resulted in lower prices and better packages to consumers. A steady increase in imports of inexpensive Japanese and European used cars, which now account for 40% of car sales in T&T, have forced new car dealers to increase their offerings of vehicles and services. However, fraud in the used car industry is prevalent. Due to poor government standards and lax enforcement, the flood of “roll-on-roll-off” used cars from Japan in the last 5-7 years includes many vehicles that require repairs to be road-worthy (by U.S. standards), but are licensed without proper inspection. Opportunities A dealership in Port of Spain began selling new Chevrolet models in 2004. Its success could be a barometer for future demand for American vehicles and parts. Ford vehicles have a secure share of the local new car market. Otherwise, opportunities exist for U.S. manufacturers of parts usable in a variety of Japanese models. Resources • American Chamber of Commerce: www.amchamtt.com • T&T Chamber of Industry and Commerce: www.chamber.org.tt • Trinidad & Tobago Manufacturers’ Association: www.ttma.com • T&T Bureau of Standards: http://www.ttbs.org.tt TUNISIA Overview During the past two years, passenger cars produced by U.S. manufacturers have begun to penetrate the Tunisian market. Due to notable decreases of high taxes (in January 2007, the consumption tax rate decreased from 300% to 100%) on large-capacity engine vehicles, the Tunisian market presents growing potential for U.S. automobile manufacturers. Best Products/Services Tunisian dealers are increasingly looking to represent U.S. automobile manufacturers as the market presents potential niches. This will lead to an increased demand for U.S. automotive parts and components. Opportunities As the Tunisian automobile market diversifies beyond European brands, there is room for U.S. manufacturers and suppliers of spare parts. Both GM (operated in Tunisia under the GM, Chevrolet and German-made Opel brands) and Ford have successfully entered the automobile car market. GM has been assembling Isuzu trucks for several years at a plant in central Tunisia.

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Investment in manufacturing automobile components for export is a priority sector for the Government of Tunisia (see Chapter 6, Investment Climate). Several U.S. companies have successfully invested in this sector. Resources • Tunisian Government (Ministry of Commerce) http://www.infocommerce.gov.tn • FIPA (Foreign Investment Promotion Agency) www.investintunisia.com • Tunisian Industry (government site) www.tunisieindustrie.nat.tn UKRAINE Overview New car sales surged by 46% in 2008 to 542,000 new vehicles, representing nearly half of total sales, 371,000, last year. The most common auto on Ukrainian highways has an engine volume of less than 2,000 cubic centimeters. To serve such market conditions, GM entered the Ukrainian market with Daewoo and Opel car models, which are assembled at AvtoZAZ-GM-DAT, a GMUkrainian joint venture located in Zaporizhzhya. Direct imports of autos from the United States are represented by the Winner Ford dealer and the local GM-Ukraine dealer. Both have branch dealerships with service centers. Other American car brands are imported from Russian and Western European dealerships. The Ukrainian market for auto parts is well-developed, and competition is high. The supply of new parts for cars is abundant both for CIS-manufactured and Western car models. According to Ukrainian experts, the Ukrainian market for new and used spare parts is valued at approximately $240 million annually. The main suppliers in Ukrainian cities are automotive service stations, affiliates of large dealers, and automotive flea markets, which buy wrecked and obsolete vehicles for parts. Automotive flea markets are also important sources for used automotive spare parts. Used parts account for an estimated $70 million of the total Ukrainian automotive car market. Best Products/Services • Car Body, Engine, Fuel and Electric Parts • Car Batteries • Car Filters • Tires

• Automotive Glass • Car Security and Anti-Theft Devices • Brakes and Parts • Shock Absorbers

Resources • http://www.autocentre.ua • http://www.autoconsulting.com.ua UNITED KINGDOM Overview 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, with over 5,000 companies active in the sector. The motor industry in the UK is heavily dependent on overseas suppliers for parts and equipment, as well as for sales of finished vehicles. To guard against possible shortfalls in supply, most of the leading vehicle manufacturers source their parts from a variety of countries and companies. It has the strongest independent aftermarket in Europe, with many small operators doing business alongside the big household names.

The EU is the main source of legislation concerning the motor industry, and many of the changes being introduced are aimed at harmonizing the rulings concerning motor vehicle safety and pollution throughout the EU. The standardization of automotive parts and equipment is an important development for the industry because it makes the parts acceptable for use by vehicle manufacturers in any EU country. This has greatly increased competition within the industry, and has helped to make the supply of automotive parts and equipment an international activity. There are approximately 33 million cars, vans, and trucks registered in Britain. However, the UK is being hard hit by the economic downturn with a dip in consumer confidence and related decrease in market demand for new cars. The UK motor industry is currently encountering the most difficult economic conditions it has faced in many years, leading to falling output levels at UK car plants and a decline in demand for parts. These trends are likely to continue in 2009. As such, it will be a difficult year, with tough trading conditions for all businesses involved in the motor industry. Best Products/Services On the positive side, used-car sales are forecast to grow, and car owners and operators will likely keep their cars longer than the average 6.8 years. With an older vehicle “parc” (i.e. the base of registered vehicles in the UK) maintaining and repairing these vehicles will offer good potential for the repair trade and related equipment, parts, and accessories. Opportunities 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. Other prospects include replacement parts for brakes, clutches and cooling systems. Security and safety system products such as anti-hijack systems and devices to combat car-key theft, performance parts including in-car entertainment, and car care products all have potential as well. Vehicle-specific accessories are not universally accepted, except for 4x4 and SUVs. Because Britain still drives on the left and has a road system designed for smaller vehicles, there are comparatively few American-built cars registered in the UK. Resources Trade Associations • The Society of Motor Manufacturers & Traders

Forbes House, Halkin Street London SW1X 7DS Tel: 011 44 20 7235 7000, Fax: 011 44 20 7235 7112, http://www.smmt.co.uk/

• The Motorsport Industry Association Federation House, Stoneleigh Park Warwicks CV8 2RF Tel: 011 44 2476 692 600, Fax: 011 44 2476 692 601, http://www.the-mia.com/

• The Garage Equipment Association 2-3 Church Walk Daventry NN11 4BL Tel: 011 44 1327 312616, Fax: 011 44 1327 312606, http://www.gea.co.uk/

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Government Departments • UK Department for Business, Enterprise and Regulatory Reform (BERR)

1 Victoria Street London SW1H 0ET Tel: 011 44 20 7215 5000 http://www.berr.gov.uk/whatwedo/sectors/automotive/automotiveteam/page9117.html

• Department for Transport (DfT) Great Minster House 76 Marsham Street London SW1P 4DR Tel: 011 44 20 7944 9643, http://www.dft.gov.uk/

Contact Details Sara Jones, Commercial Assistant, U.S. Commercial Service, American Embassy Tel: 011 44 20 7894 0451, Fax: 011 44 20 7894 0020, Email: Sara.Jones@mail.doc.gov VENEZUELA Overview Venezuela is the fourth largest automobile assembler in Latin America behind Brazil, Mexico and Argentina. Local assemblers are General Motors, Toyota, Ford Motors, Chrysler, Mitsubishi, Hyundai, Iveco, Encava, Mack and several bus builders using locally made or imported chassis and engines. Venezuela has a motor vehicle fleet of approximately 4 million cars, trucks and buses, plus an estimated half a million motorcycles. According to data from the Venezuelan Automotive Chamber (CAVENEZ), the Venezuelan automotive market decreased 44.8%, from 491,899 in 2007 to 271,622 vehicles in 2008. Insufficient supply, rather than demand, caused the steep fall. Imported vehicle sales fell 60%, while locally assembled vehicle sales fell 12.5% due to labor conflicts and foreign currency allowance restrictions by CADIVI. According to CAVENEZ, the major cause behind the drop was regulations implemented by the Venezuelan Government’s Ministry of Light Industry and Commerce (MILCO). The regulation establishes quotas on vehicle imports in order to favor the development of local industry. Import of used vehicles is prohibited. The new regulation also mandated that all passenger cars must be dual fuel (gasoline/natural gas) beginning July 1, 2008. However, the deadline was postponed until January 1, 2009 and then again until April 1, 2009. Originally, all trucks, buses, and taxis were supposed to be dual fuel: gasoline or diesel with natural gas or ethanol. The revised regulation calls for each company to make at least two vehicles comprising at least 30% of sales to be available in dual fuel. American car assemblers continue to dominate production because of long tradition and the belief that U.S. automotive products are superior in quality. Gradually, however, this position of dominance is being eroded because of the influx of automobiles from Europe and Asia, many of which are less expensive and smaller than U.S. models. Local U.S. assemblers are only now attempting to counter this trend by assembling vehicles that can compete, some sourced from Brazil, Mexico, and Colombia. As of this writing (February 2009), there is major uncertainty in the automotive sector. MILCO has not confirmed the projected 2009 amount of vehicles they will be able to import. However, CAVENEZ estimates between 150,000 and 200,000 total sales for 2009. Given the time lag

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between orders and fulfilling necessary import documentation, imported vehicles could not be on the market until late spring at the earliest. The Venezuelan auto fleet is characterized by its age and composition. The average age of the national fleet is well in excess of 10 years. Cars in Venezuela are endlessly recycled, with many cars from the 1960s, 1970s, and 1980s still on the road in various states of repair and disrepair. Many Venezuelans, especially those owning older models, attempt their own repairs. Many also take their cars to Mom and Pop mechanics, which are legion. Owners of newer vehicles often take them to dealers or to repair shops authorized by their insurance.

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IV. Trade Events

Trade events, such as trade shows, trade missions and catalog shows, offer excellent opportunities for face-to-face interaction with foreign buyers and distributors. Of the many U.S. and international events held throughout the year, some are vertical (single industry theme) and some horizontal (many industries represented). The events organized or approved by the U.S. Department of Commerce can be especially useful for first-time or infrequent participants – they require less lead time to register and typically involve more handholding. The Trade-Event Scheduling Web sites listed below allow selective searches for upcoming events by industry, location, type and date. They typically provide the event organizer, event descriptions and costs, and people to contact for more information. The Trade-Event Scheduling Web sites listed below allow selective searches for upcoming events by industry, location, type and date. They typically provide the event organizer, event descriptions and costs, and people to contact for more information. To find upcoming events for U.S. automotive products and service equipment, use industry search terms relating to automotive, motor vehicles, and the like.

Schedules for U.S. Government Organized or Sponsored Events Domestic USDOC Events: http://www.export.gov/comm_svc/us_event_search.html International USDOC Events: http://www.export.gov/comm_svc/us_event_search.html

Schedules for Commercially Organized Events TSNN (http://www.tsnn.com/) ExpoWorldNet (http://www.expoworld.net/) Exhibition Center - Foreign Trade Online (http://www.foreign-trade.com/exhibit.htm)

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V. Available Market Research Automotive Parts and Accessories

The reports listed below are country-specific market surveys relating to Automotive Parts and Accessories written by resident U.S. commercial staff in each country. Many of these reports analyze demand trends, the competition, business practices, distribution channels, promotional opportunities, and trade barriers. All the reports can be obtained on-line at no cost from http://www.buyusainfo.net/adsearch.cfm?loadnav=no

CENTER FOR INTERNATIONAL TRADE DEVELOPMENT 13430 Hawthorne Blvd, Hawthorne, California 90250 USA

Phone: (310) 973-3173 Fax: (310) 973-3132 E-mail: mkogon@elcamino.edu

Australia: Performance and Racing Equipment Australia 6/2/2009Automotive Aftermarket Accessories and Performance Equipment Argentina 6/30/2008The Austrian Market for Automotive Replacement Parts Austria 8/6/2007The Belgian Automotive Market - Auto Accessories and Specialty Equipment Belgium 3/26/2008Automotive Aftermarket Parts and Accessories/Service Equipment Canada 7/18/2008China Automotive Market China 1/12/2007Colombia Automotive Sector Overview Colombia 7/1/2009Automotive Market Overview Colombia 8/29/2007Czech Republic: Automotive Sector Analysis Czech Republic 8/8/2008France: Automotive Maintenance Products France 9/5/2007Germany: Automotive Services 2008 Germany 7/28/2008Germany: OEM Equipment 2008 Germany 7/29/2008German Automotive Market Recessive, the Future Depressive Germany 12/12/2009Automotive Aftermarket in Israel Israel 2/24/2009Italy: Garage Repair and Maintenance Equipment Italy 8/30/2007Italy: Automotive Tuning Italy 10/30/2008Automotive Parts Industry Japan 4/30/2009Automotive Parts Japan 12/28/2009Mexico: Auto Parts & Supplies Industry Mexico 9/5/2007

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The Market for Automotive Parts and Accessories in Northwest Mexico Mexico 10/22/2007Update and Overview of the Mexican Automotive Industry 2008 Mexico 4/19/2008Mexico: Challenges and Trends in the Auto Industry Mexico 1/30/2009The Netherlands: Automotive Parts & Services Equipment Netherlands 9/7/2007Poland: Automotive Repair and Maintenance Equipment Poland 9/15/2008Automotive Aftermarket Accessories and Specialty Equipment in Portugal Portugal 1/23/2009Romania's Aumotive Market 2009 Romania 7/23/2009Saudi Arabia: Automotive Tire Industry Saudi Arabia 1/31/2009Auto Parts & Equipment Saudi Arabia 4/29/2009Automobiles, Auto-parts and Accessories Industry Slovakia 10/27/2008Spain: Automotive Repair and Maintenance Equipment Spain 7/27/2007Spain: Economic Crisis Presents Opportunity for Automotive Repair and Maintenance… Spain 2/3/2009Automotive Parts, Accessories & Specialty Equipment Market Switzerland 7/2/2007Turkey: Garage Repair and Maintenance Equipment Industry Turkey 5/5/2008United Kingdom: Garage Repair and Maintenance United Kingdom 1/30/2009

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APPENDIX

Products in Automotive Parts and Accessories by Harmonized (HS) and Schedule B Code

HS/Sch B Code Description 4011 New pneumatic tires, of rubber 4011101000 Of a kind used on motor cars (including station wagons and racing cars): Radial 4011105000 Of a kind used on motor cars (including station wagons and racing cars): Other 4011201005 Of a kind used on buses or trucks: Radial: Off-the-highway: Light Truck 4011201015 Of a kind used on buses or trucks: Radial: On-the-highway: Other 4011201025 Of a kind used on buses or trucks: Other: Off-the-highway: For use on a rim measuring 40.6 cm

or more in diameter 4011201035 Of a kind used on buses or trucks: Other: Off-the-highway: Other 4011400000 Of a kind used on motorcycles 4011610000 Of a kind used on agricultural or forestry vehicles and machines 4012 Retreaded or used pneumatic tires, of rubber; solid or cushion tires, tire treads and tire

flaps, of rubber 4012110000 Retreaded tires: Of a kind used on motor cars (including station wagons

and racing cars) 4012120000 Retreaded tires: Of a kind used on buses or trucks 4012190000 Retreaded tires: Other 4012200000 Used pneumatic tires 4012901000 Solid or cushion tires 4012906000 Other 4013100010 Inner tubes, of rubber: Of a kind used on motor cars (including station wagons and racing cars) 4013100020 Inner tubes, of rubber: Of a kind used on trucks and buses 8708 Parts and accessories of the motor vehicles of headings 8701 to 8705 8708700050 Road wheels and parts and accessories thereof: For other vehicles 8708800010 Suspension systems (including shock absorbers): For tractors suitable for agricultural use 8708800050 Suspension systems (including shock absorbers):For other vehicles 8708807000 Suspension systems (including shock absorbers): Parts 8708911000 Radiators: For tractors suitable for agricultural use 8708915000 Radiators: For other vehicles 8708918000 Radiators: Parts 8708921000 Mufflers and exhaust pipes: For tractors suitable for agricultural use 8708925000 Mufflers and exhaust pipes: For other vehicles 8708928000 Mufflers and exhaust pipes: Parts 8708931000 Clutches and parts thereof: For tractors suitable for agricultural use 8708935000 Clutches and parts thereof: For other vehicles 8708941000 Steering wheels, steering columns and steering boxes: For tractors suitable for agricultural use 8708945000 Steering wheels, steering columns and steering boxes: For other vehicles 8708948000 Steering wheels, steering columns and steering boxes: Parts

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8708950000 Safety airbags with inflater system; parts thereof 8708995800 Double flanged wheel hub units incorporating ball bearings 8708998115 Double flanged wheel hub units not incorporating ball bearings 8708998130 Slide-in campers 8714 Parts and accessories of vehicles of headings 8711 to 8713 8714110000 Of motorcycles (including mopeds): Saddles or seats 8714190000 Of motorcycles (including mopeds): Other 8714910000 Frames and forks, and parts thereof 8714920000 Wheel rims and spokes 8714930000 Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket-wheels 8714940000 Brakes, including coaster braking hubs and hub brakes,

and parts thereof 8714950000 Saddles 8714960000 Pedals and crank-gear, and parts thereof 8714990000 Other