Luxury Vehicle [Image Source: Dexter Flexter, Unsplash]

Chinese Demand for Alabama Luxury Cars During Pandemic Underscores Strong Economic Relations


As the coronavirus pandemic swept across the world, Alabama auto exports to China increased more than 170% from a year ago in the first quarter of 2020, indicating increased interest in luxury cars and the importance of trade to Alabama’s economy.

Compared to the first quarter of the previous year, Alabama’s overall exports to China grew 45%, reaching $534 million. Alabama is home to three foreign automakers – Honda, Hyundai, and Mercedes-Benz – all of which operate assembly plants in the state. These assembly plants contribute to the production of nearly 1 million vehicles a year in Alabama for domestic sales and export. All three were shut down in various capacities from mid-March to the end of May as the United States fought to reduce the spread of coronavirus.

“Export opportunities around the globe are critically important to the Alabama economy. There’s a direct link between growth in exports and growth in jobs." said Greg Canfield, Alabama director of the Department of Commerce, highlighting the importance of supporting the export industry in Alabama. In Alabama alone, over 90,000 jobs related to manufacturing are classified as export-supported, with over 4,000 Alabama businesses selling products overseas. In 2017, the top goods exported to China included motor vehicles, resins and synthetic fibers, basic chemicals, pulp and paperboard mill products, and oilseeds and grains. China is also Alabama’s top market for services, and has grown by 18% per year. Top service exports include travel, education, and equipment installation, maintenance and repair.

The export industry in Alabama has stimulated economic growth in terms of American jobs as well. Alabama exports to Asia have generated 13,719 directly supported jobs, and 26,471 indirectly supported jobs. In 2016, Alabama’s exports to China supported 17,400 American jobs. Chinese greenfield investment in Alabama was estimated at $37.6 million in 2019, demonstrating the value China places on a strong economic relationship with the state.

Betty Nen is a Research Intern at the East-West Center in Washington. She is a recent graduate of the University of Wisconsin, Madison with majors in Political Science and Southeast Asian Studies, and a returned David L. Boren National Security Scholar to Indonesia.