South Korean automaker Kia has already started to look at ways to diversify exports from its Mexican operations in the event that its vehicles produced there fall afoul of revised NAFTA rules, Manufactura reports. It may also face risks from the section 232 review of the automotive sector should the carve-out for Mexico that includes a vehicle quota, as outlined in Panjiva research of August 29, have an impact.

Panjiva analysis of AMIA data shows Kia exported 194k vehicles from Mexico in the 12 months to July 31, making it the fifth largest exporter ahead of Toyota and behind Ford. While it’s exports improved by 36.4% in 2Q there was a marked decline of 28.2% in July. That may reflect a degree of stockpiling in exports to the U.S. due to the risk of tariffs.

Chart segments Mexican exports of vehicles by manufacturer on a monthly (dotted) and quarterly average (solid) basis. Calculations based on AMIA data.   Source: Panjiva

Part of Kia’s strategy appears to have been to diversify its Mexican exports away from simply supplying the U.S. Panjiva data shows 57.6% of its total Mexican exports went to the mainland U.S. in the three months to July 31 compared to 62.2% in the same period in 2017 and 91.4% in 2016 shortly after it started production in the U.S.

Chart segments Kia’s exports from Mexico by destination and product (HS-4) in the three months to July 31, denominated in dollars.   Source: Panjiva