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Asian automakers build US plants as GM, Ford close some of theirs
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By MIRA OBERMAN

CHICAGO, Mar. 15 (AFP) — A fundamental transformation is taking place in the US auto industry as Asian automakers increase their domestic production and market share while General Motors and Ford continue to shrink.

The shift was kicked off 21 years ago when Toyota opened its first US manufacturing plant, and it was highlighted again on Monday when both Toyota and Hyundai subsidiary Kia announced plans to open new assembly plants.

"There’s no doubt the footprint is shifting and the players are shifting," Michael Robinet, an auto analyst with CSM Worldwide, told AFP.

The same advantages which fuelled the growth of Asian automakers in the 1980’s are helping them today: A strong focus on fuel-efficient vehicles and lower production costs.

Japanese automakers Toyota, Nissan, Honda, and Fuji Heavy Industries (the maker of Subaru), and Korea’s Hyundai currently build 27 percent of the vehicles produced in North America and command 34 percent of the US market.

CSM expects the Asian production share to rise to 35 percent by 2012 as new facilities come online and GM and Ford complete restructuring plans that include the closure of more than two dozen facilities.

That shift has helped propel the economic decline of Detroit and the state of Michigan. While US automakers are still headquartered in and around the Motor City, Asian and European manufacturers have built most of their plants in the less union-friendly southern states.

Building vehicles in the market where they are sold has a number of advantages.

"It stabilizes the cost base and politically it can’t hurt," Robinet said. "If you locate a plant in a new state, that’s two more senators flying your flag."

Some of the increased production by Asian automakers will replace vehicles previously imported, Robinet said. But a large chunk could come from new Asian models aimed at further chipping away the diminishing market share of GM and Ford.

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