NEW RECORD: From the Far East to the Arabian Desert, Alabama exports top $7 billion

From the Far East to the Arabian Desert, Alabama-built vehicles continue to make their mark across the globe.

The value of Alabama auto exports topped $7 billion last year, a record annual total and a 5.8 percent gain from 2014. Meanwhile, overseas shipments of Alabama-made motor vehicle parts reached $1.2 billion, an 18 percent increase.

In 2015, China was the top export market for Alabama vehicles, growing nearly 9 percent to $2 billion and knocking Canada out of the top spot, according to trade data from the U.S. Department of Commerce. Canada was No. 2, with Germany, Mexico and the United Kingdom rounding out the top five.

Rapid growth in overseas shipments has propelled Alabama to a No. 3 spot ranking auto-exporting states, trailing only Michigan and South Carolina. Over the past 15 years, Alabama’s vehicle exports have risen tenfold.

“Alabama’s auto industry has become an exporting powerhouse, with vehicles produced in the state finding markets around the world,” said Greg Canfield, secretary of the Alabama Department of Commerce. “This creates jobs in our state and solidifies the position of the Alabama auto assembly plants in a global business.”

The Mercedes-Benz factory in Tuscaloosa County accounts for the lion’s share of Alabama’s auto exports, but the assembly plants operated by Honda and Hyundai contribute to the total, too.

In Honda’s case, the redesigned Alabama-made Pilot SUV is turning heads in countries including Qatar, Oman, Saudi Arabia and United Arab Emirates.

The 2016 Pilot is equipped with Honda’s new “Intelligent Traction Management” all-wheel drive system, which is designed to excel in mud, snow and sand.

A few months ago, an engineer from Honda’s Talladega County plant traveled to Dubai, where the new Pilot’s capabilities were demonstrated by driving up and down large sand dunes.

The Dubai Honda sales team was impressed.

“They are really excited about it because now they can take this Pilot out to the sand dunes whereas the old one didn’t have that capability,” said Jeff Tomko, head of Honda’s Alabama operations. “That plugged the gap on why it didn’t sell more than it could; now, the Pilot will probably outsell the Odyssey in Dubai.”

UNDERSTANDING EXPECTATIONS

The Talladega County plant typically exports 10 to 15 percent of its annual output, a number that varies depending on the global vehicle market. Honda produced nearly 350,000 vehicles at its Alabama plant last year.

Each export region requires different certification, and that testing can take time.

“We’re sending a lot of our associates to customers in Dubai and Russia and China and Korea to understand their expectations because their expectations may be different from the customer in the U.S., Canada or Mexico,” Tomko said.

For example, South Korean customers are strongly focused on paint quality, fit and finish. And in Russia, they want a sturdy suspension to cope with rugged roadways.

While the Odyssey and Pilot vie for the most popular Alabama Honda export, the Alabama plant – which also produces the Ridgeline pickup and Acura MDX sport utility – supplies every export region that wants one of those vehicles, Tomko added.

“That puts a big demand on us, but the benefit of that is when the market has a downturn in the U.S. or North America, those markets may not be in that same downturn,” he said. “That keeps us running at a higher percentage than we normally would under those circumstances.”

SPANNING THE GLOBE

Australia was the sixth most popular market for Alabama auto exports last year, according to figures from the U.S. Commerce Department. United Arab Emirates, South Africa, Korea and Chile rounded out the top 10.

Strong growth was seen in several top markets, including Germany and the United Kingdom, each registering a 23 percent growth in Alabama-made vehicle shipments from 2014, and Chile, with 46 percent growth. Qatar and Oman were among the big gainers, with increases of 148 percent and 117 percent, respectively.

Alabama-made vehicles were shipped to 76 countries last year, spanning the globe.