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Federal Register / Vol. 86, No. 213 / Monday, November 8, 2021 / Notices
VI. Analysis A. Present Import Quantities of Automobiles Have Weakened the American-Owned Automotive Industry
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In the U.S. automobile sector, there is substantial evidence that imports have weakened the domestic industry and are causing the American-owned segment of the industry to contract. Foreign-owned automobile producers in the United States are able to offset the economic effects of a contraction in the U.S.
market by maintaining significant sales volumes in their protected home markets. However, as explained in Appendix F, under the present trade regime, American-owned manufacturers are unable to meaningfully penetrate those same protected foreign markets to offset their shrinking sales in the United States. In fact, as shown in Figure 1B
above, from 1995 to 2017 Americanowned automobile producers share of the global automotive market contracted by 24 percentage points, from 36
percent to 12 percent, while EU
automobile producers share grew from 20 percent to 23 percent and Japanese automobile producers share stayed relatively steady at 26 percent and 24
percent during the same period. Clearly, American-owned manufacturers are trailing behind their foreign-owned
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competitors in the global market, which impacts their sales revenue and, hence, R&D investments in technologies that are integral to maintaining Americas technological advantage in military applications. Consequently, Americas ability to cost-effectively project power globally is also trailing behind. As set forth in Section VI.C, the U.S. military depends heavily on innovation in the commercial automotive sector, and in particular will depend on Americanowned manufacturers innovation capabilities in time of war. The following sections analyze the impact of imports on the U.S. automotive market, the weakened competitive position of American-owned producers, and the consequent threat to the impairment of national security.63
1. U.S. Automobile Production Volume Has Eroded Over Three Decades Due to Imports The strength of the U.S. automotive industry has weakened since 1985.
Evidence establishes that purchasers have increasingly shifted away from domestically-produced automobiles to imported vehicles, and data provided in Figure 3 show that from 1985 to 2017
demand for automobiles in the U.S.
63 See
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market grew by 11 percent, but total domestic production by both Americanand foreign-owned firms declined by 4
percent. More specifically, U.S. demand for automobiles grew from 15.4 million units in 1985 to 17.1 million units in 2017, while production by domestic automobile producers declined from 11.4 million units in 1985 to 10.9
million units in 2017.64 Over the same period, U.S. imports of automobiles nearly doubled from 4.6 million units to 8.3 million units.65 Expressed as a percentage of market share an indicator of competitive strength, domestic producers share of the U.S. market declined over this 32-year period from 70 percent of overall U.S. demand in 1985 to 52 percent in 2017.66
Production by domestic manufacturers of automobiles held steady in 2018.67
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64 According to Wards Intelligence InfoBank, U.S.
automobile production peaked at 12.6 million units in 1999, but subsequently plummeted to 5.6 million units in 2009 as a result of the economic recession.
Although production ultimately recovered to 11.9
million units in 2016, by 2017 production again slipped to 10.9 million units.
65 Department of Commerce, Census Bureau.
66 Wards Intelligence InfoBank and Department of Commerce, Census Bureau. Domestic producers market share is calculated as domestic sales minus imports divided by domestic sales.
67 Wards Intelligence InfoBank.

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