Many Asian-owned auto companies are looking to expand their operations in the US and capitalize on rising consumer sales. In 2014, the US auto industry had its best performance since 2006, and January sales suggest that trend is likely to continue through 2015, as it saw a nearly 14% sales increase. Auto experts suggest the industry will sell over 17 million vehicles by the end of the year, and automakers are looking to capitalize on that growing demand, with companies from Japan, South Korea, and China all planning large investments.
Japanese companies Honda and Toyota are both investing millions in the US auto industry as Honda plans on spending more than $340 million to upgrade its facility in Anna, Ohio. The plant employs 2,600 people and the company has more than 14,000 employees throughout the state. Toyota, meanwhile, is investing $75 million and adding 85 jobs to its facility in Ann Arbor, Michigan as it looks to expand its powertrain engineering operations. The company also plans to construct a new multi-million dollar facility that will create roughly 250 jobs in Washtenaw County, Michigan after a $4 million grant was awarded to Toyota for relocating from Kentucky last August.
Korean-owned Hyundai Motor Group plans to invest more than $73 billion on expanding capacity and developing new vehicles by 2018. Much of the added capital will be spent within South Korea, though some investment will be used to further expand its foothold in the US after its market share declined last year. This will include entering the US commercial vehicle market, which is expected to grow almost 30% in the next decade. The United States is Hyundai’s second-largest overseas market after China.
Swedish automaker Volvo, now owned by the Chinese conglomerate Zhejiang Geely Holding Group Co., is said to be exploring the possibility of opening a vehicle factory in the US. Reports say that the company is talking to officials from North Carolina, South Carolina, and Kentucky about possible locations. The company is also likely to be the first to successfully sell Chinese-made cars to the American market, as it plans to export 1,500-2,000 vehicles this year. If successful, China will be entering a market that sees automakers from other Asian countries - Japan and South Korea - accounting for roughly 45% of all auto sales.
For further information on Asian automakers in the US, please read the special three-part series on Japan’s auto industry, available here (Part I), here (Part II), and here (Part III).
Update:On May 11, 2015, Zhejiang Geely Holding Group Co. announced that South Carolina had won the bidding to host the new Volvo facility. The state is expected to gain 2,000 new jobs from the facility, possibly growing to 4,000 in the future.
Nate Schlabach is a Research Intern at the East-West Center in Washington and a graduate student at the Center for Justice and Peacebuildingat Eastern Mennonite University.