1.
SEPTEMBER 2018
Exhibits from the BCG Article
Shifting Trade Rules
and the Future of
North America’s Auto
Industry

2.
1
Copyright©2018byTheBostonConsultingGroup,Inc.Allrightsreserved.
Exhibit 1 | In the Passenger Car Trade, the US Has a $126 Billion Deficit, Mainly
with the EU, Canada, Japan, and Mexico
-31
Japan
8
-41
-44
-44EU
-27
-40
4
1
Canada -29 15
-35
2South Korea -16
Mexico
-5Others 20
-14
25
Sources: Trade Map; BCG analysis.
Note: Data consists of import and export values of HS Code 8703.
Total US car exports, 2017: $54 billionTotal US car imports, 2017: $180 billion
Imports
Exports

3.
2
Copyright©2018byTheBostonConsultingGroup,Inc.Allrightsreserved.
Exhibit 2 | Four Possible Scenarios for the North American Automotive Industry
Source: BCG analysis.
US out
of NAFTA
New NAFTA
auto rules
Section 232 duties
Imposed
Tough rules, easy out
• OEMs and suppliers may choose to pay low
US duties rather than comply with complex
new rules
• No impact on supply chains involving the
EU, Japan, and South Korea
• Higher consumer prices for some models
Radical disruption
• Deep impact on supply chains involving
Canada, Mexico, the EU, Japan, and South
Korea
• Higher manufacturing costs passed through
to US consumers
• Loss of US export competitiveness
Fortress North America
• No impact on compliant Canadian and
Mexican imports
• Significant impact on supply chains
involving the EU, Japan, and South Korea
• Movement of some output to higher-cost
NAFTA factories to avoid duties
Muddling through
• Low US duties assessed on noncompliant
Canadian and Mexican imports
• No impact on supply chains involving the
EU, Japan, and South Korea
• Higher consumer prices for some models
Not imposed
1
2 3
4
Impact on the North American auto industry
highlow

4.
3
Copyright©2018byTheBostonConsultingGroup,Inc.Allrightsreserved.
Global
recession
Exhibit 3 | The Ability to Shift Motor Vehicle Production to the US is Limited:
Factories Are Already Operating at Nearly Full Capacity
Source: Board of Governors of the Federal Reserve System.
Note: Average of each year's quarter values; seasonally adjusted data.
79
8685
81
79
76
69
64
44
57
71
7980
8585
80
0
20
40
60
80
100
20022001 2003 2004 2013 2015 2017
+35% points
20162014201220112005 20092008 20102007
73
2006
Significant
tightening
since recession
Manufacturing capacity (%)