Countries That Rely on U.S. Car Sales: Japan, Germany and More

The U.S. has long been one of the world’s biggest markets for automobiles, and many foreign automotive industries have built their success by selling into the American market. In fact, nearly half of all cars sold in the U.S. in recent years have been imported​.

This means U.S. consumers play a pivotal role in the fortunes of automakers around the globe. Historically and today, countries like Japan, Germany, South Korea, Mexico, and Canada have relied heavily on U.S. car sales to drive their automotive industries. Below, we explore each of these key exporters and how their dependence on U.S. auto sales has evolved over time.

Massive car-carrier ships transport vehicles from ports in Asia and Europe to the United States, underscoring the scale of America’s imported car market. The U.S. imported around 8 million passenger vehicles in 2024, worth about $240 billion​

Japan’s Reliance on U.S. Auto Sales

Japan built one of the world’s largest automotive industries in the late 20th century, in large part by exporting cars to the United States. Japanese brands like Toyota, Honda, and Nissan gained huge popularity among American buyers starting in the 1970s for their reliability and fuel efficiency. By 1980, American imports of Japanese cars had surged to 1.8 million vehicles annually​

which was significant enough to trigger trade tensions. In response to U.S. pressure, Japan agreed to voluntary export restraints in 1981 to limit the flood of cars into the U.S. market​

This led Japanese automakers to begin building factories in the U.S. (so-called “transplant” assembly plants) to meet American demand locally​

Despite that shift, Japan continued to export a massive number of vehicles to the U.S. each year.

Over time, Japan’s reliance on U.S. car sales has remained high even as the global market expanded. North America (mainly the U.S.) accounts for roughly 37.5% of Japan’s vehicle export volume as of 2022​

In 2023, Japanese manufacturers exported about 1.49 million vehicles to the United States​

statista.com. This is only slightly down from the peak years of the 1980s and 1990s, because even though Japanese companies now produce many cars inside the U.S., America still imports well over a million Japan-built cars annually​

reuters.com. The U.S. is by far Japan’s largest overseas market for autos. In recent years, Japanese automakers have diversified somewhat (for example, China’s car market has grown, and Japan also exports to Europe and elsewhere), but the American market remains a cornerstone of Japan’s auto industry. Trade policies have occasionally impacted this relationship – for instance, Japan and the U.S. have negotiated agreements instead of tariffs, avoiding major trade barriers on Japanese cars. As a result, Japanese brands continue to count on strong U.S. sales for their global success. Today, Japan is consistently among the top exporters of cars to the U.S., typically only rivaled by Mexico and sometimes South Korea​

Germany’s Dependence on the American Car Market

Germany is another auto manufacturing giant with a long history of selling into the U.S. market. German automakers (like Volkswagen, BMW, and Mercedes-Benz) began making inroads in the U.S. as far back as the 1950s and 1960s – for example, the VW Beetle became a cultural icon in America. Germany’s exports to the U.S. grew further in the late 20th century, especially in the luxury and performance segments where German cars became status symbols. However, Germany’s reliance on U.S. car sales has generally been more moderate compared to Japan or South Korea, because German automakers also focus heavily on Europe (their home market) and, in recent decades, China.

Currently, the United States is one of the largest single-country markets for German car exports, but it represents only about 13% of Germany’s new car export volume​

In 2024, Germany exported roughly 430,000 vehicles to the U.S.​– a significant number, but far less than Mexico or Japan sent. Part of the reason is that German companies have also built factories in the U.S. (for example, BMW’s Spartanburg plant in South Carolina and Volkswagen’s plant in Tennessee) to serve American consumers. Additionally, German auto exports are spread across many countries; the UK, France, Italy and other European neighbors import a lot of German cars, and many German-brand cars sold in China are produced in joint-venture plants in China rather than being exported from Germany.

Over time, Germany’s dependency on U.S. sales has fluctuated but remained important. In the 1980s and 1990s, the U.S. was a vital market for high-end German sedans and sports cars. By the 2010s, China had overtaken the U.S. as the largest market for some German luxury brands (though those China sales mostly come from local production, not exports). Still, American buyers deliver huge revenues for German automakers – especially for luxury SUVs and premium models that are often built in Europe and shipped to the U.S. German industry observers have noted that any U.S. trade barriers would hit Germany hard, given that about 10–13% of German car exports head to America​

​This was evident in 2018–2019 when the U.S. government threatened a 25% tariff on imported cars; German officials and industry leaders were alarmed, as such a tariff would directly affect Germany’s sizable exports to U.S. customers​

Fortunately, those specific tariffs didn’t materialize broadly, and as of 2025 the transatlantic auto trade remains robust. In summary, Germany’s auto industry does depend on the U.S. market – particularly for profit-rich luxury vehicles – but not to the singular extent of Mexico or Canada. Instead, the U.S. is one key pillar among several (alongside Europe and China) for German automakers’ global sales strategy.

South Korea: Growing Exports to the U.S. Market

South Korea’s automotive industry (led by brands like Hyundai and Kia) has seen dramatic growth in its reliance on U.S. car sales over the past few decades. South Korean cars first entered the U.S. market in the 1980s with budget models, and over time their quality and popularity have surged. Today, the U.S. is the number one export destination for Korean automakers by a wide margin. In 2024, nearly half of South Korea’s auto exports (about 49%) went to the United States, totaling $34.7 billion in value​

That year, South Korea shipped roughly 1.4 million vehicles to U.S. shores​ making it one of the top three foreign suppliers of cars to America.

This level of reliance is a relatively recent development. As recently as the early 2000s, South Korea exported fewer cars to the U.S., focusing also on emerging markets and Europe. However, a few factors reinforced Korea’s U.S.-centric growth: the Korea–U.S. Free Trade Agreement (KORUS) in 2012 gradually eliminated U.S. tariffs on Korean-made cars, helping Hyundai and Kia gain price advantages. Meanwhile, Korean automakers invested heavily in understanding American consumer preferences (like the demand for SUVs) and rolled out successful models tailored for the U.S. By the early 2020s, Hyundai and Kia had a lineup of SUVs and sedans winning sizable U.S. market share, from the Hyundai Tucson to the Kia Telluride. The export numbers climbed accordingly – South Korea’s car exports to the U.S. jumped 44.6% year-on-year in 2023 alone, hitting a record high​

It’s worth noting that South Korean companies have also opened manufacturing plants in the United States (for example, Hyundai operates a plant in Alabama and Kia in Georgia) to assemble some of their popular models locally. Still, a large portion of their production remains in Korea for export. South Korea’s dependence on U.S. sales is such that any shift in American trade policy or demand strongly impacts Korean automakers. For instance, new U.S. laws promoting electric vehicle (EV) production in North America (as in the 2022 Inflation Reduction Act) have prompted Hyundai and Kia to announce plans for EV factories in the U.S., aiming to preserve their access to American EV consumers. In summary, the South Korean auto industry today leans heavily on the U.S. market for volume and growth, more so than ever before, making the U.S. a critical pillar of its global strategy.

Mexico: An Automotive Powerhouse Built on U.S. Sales

Mexico has become a powerhouse in automotive manufacturing largely because of the U.S. car market. Over the past 25 years, Mexico’s auto industry transformed from a smaller domestic-focused sector into an export-driven giant. The implementation of NAFTA in 1994 (now updated as USMCA) was a game-changer – it eliminated tariffs and integrated Mexico into North American auto supply chains​

Automakers from the U.S., Japan, and Europe invested heavily in Mexican assembly plants to produce cars for export. The result: Mexico is now the #1 foreign supplier of cars to the United States​

The numbers underline Mexico’s reliance on U.S. car sales. In 2024, Mexico exported about 3.48 million vehicles, and a whopping 79.7% of those went to the United States​. That equated to roughly 2.77 million Mexican-made cars sold in the U.S. in one year​ about 18% of all light vehicles sold in America​

No other country exports as many cars to the U.S. Mexico’s exports to the U.S. have grown steadily, from just a few hundred thousand units per year in the early 1990s to well over two million in the 2010s. By 2014, Mexico had surpassed Japan to become the second-biggest car exporter to the U.S., and soon after it overtook Canada for the top spot​

This growth has been fueled by Mexico’s competitive advantages: lower labor costs, geographic proximity to U.S. dealers (for quick shipments), and numerous free-trade agreements​

Automakers build a wide range of vehicles in Mexico – from small cars and sedans (Nissan, Honda, Toyota have plants there) to SUVs and pickup trucks (GM, Ford, Stellantis all produce models in Mexico).

Mexico’s auto industry is almost entirely export-oriented. It produces far more cars than the local Mexican market can absorb – in 2024, for example, about 87% of vehicles made in Mexico were exported​

This means Mexican auto jobs and factories depend directly on demand from the U.S. (and to a lesser extent Canada). Trade policies have a huge impact here. The new USMCA trade agreement raised the required North American content in cars to 75% (up from 62.5% under NAFTA)​, pushing automakers to source even more parts within North America. This change was aimed at boosting U.S. manufacturing, but Mexico has adjusted by attracting more auto parts production domestically as well. Additionally, USMCA introduced rules for labor wages, encouraging higher pay for some Mexican autoworkers over time. Despite these tweaks, Mexico has retained its status as a favored manufacturing base. Major investments continue – for instance, automakers are expanding Mexican plants for upcoming electric vehicles and components, indicating confidence that U.S. demand will remain strong.

In summary, Mexico’s reliance on U.S. car sales is perhaps the most extreme of any country: roughly four out of five Mexican-built vehicles end up in American driveways​

This reliance has brought economic growth and jobs to Mexico (the auto sector is a top source of foreign investment and manufacturing GDP there), but it also means Mexico’s industry is highly exposed to U.S. market fluctuations or protectionist moves. So far, integration under free trade has been a win-win, with North American consumers getting affordable cars and Mexico developing into a global export hub.

Canada’s Automotive Exports to the U.S.

Canada has one of the oldest and most deeply integrated automotive trade relationships with the United States. As early as 1965, the U.S. and Canada signed the Auto Pact, which effectively unified the two countries’ auto industries by allowing duty-free movement of vehicles and parts between them. American “Big Three” automakers (GM, Ford, Chrysler) have built cars in Canadian plants for over a century, and Canadians have assembled many vehicles destined for U.S. showrooms. Because of this, Canada’s auto industry has always been heavily oriented toward U.S. sales.

Today, Canada remains extremely dependent on the U.S. market for its car exports. Approximately 90–93% of all Canadian-built vehicles are exported to the United States​

In dollar terms, vehicles were Canada’s second-largest export category in 2023 at $51 billion, and nearly all of that value came from U.S. purchases​

In 2024, Canada exported about 1.1 million vehicles to its southern neighbor​

These include not only cars from the Detroit automakers but also models from Toyota and Honda, which operate major assembly plants in Ontario.

Historically, Canada was once the #1 foreign supplier of cars to the U.S. (particularly in the late 1990s and early 2000s when Canadian production peaked). Back in those years, Canada produced over 2.5 million vehicles annually, with the vast majority sent to the U.S. market. In recent times, Canada’s rank has slipped – Mexico surpassed Canada in vehicle exports, as did Japan and South Korea to some extent – but Canada still typically falls within the top five exporters of cars to the U.S. The U.S.–Mexico–Canada Agreement (USMCA) signed in 2020 helped update and preserve the close trade ties, setting new rules (like the 75% North American content requirement and labor wage standards) that affect Canada as well. Canadian auto plants have adjusted by focusing on higher-value or niche models (for example, trucks and luxury SUVs) and by securing new investments to produce electric vehicles and batteries in the coming years.

One notable trend is that Canada, like the U.S., saw some auto production jobs move to Mexico over the past two decades due to lower costs there. Nonetheless, Canada has leveraged its skilled workforce and proximity to U.S. markets to remain a key player. Virtually every car coming out of Canada finds an American buyer thanks to the integrated supply chain – often a car will have parts that crossed the border multiple times during assembly. Canadian officials have been vocal whenever U.S. tariff threats emerge; a few years ago when a 25% U.S. auto tariff was floated, it was called a “direct attack” on Canada’s economy, since over 90% of Canada’s vehicle exports go to the U.S.​

bloomberg.com. This highlights how closely Canada’s auto sector is tied to U.S. policy. Going forward, Canada is aiming to stay relevant by pivoting to electric vehicle production (with companies like Ford, GM, and Stellantis announcing EV or battery projects in Canada) – all with the goal of continuing to supply the U.S. market in the new era of autos.

Trends and Shifts in U.S.-Focused Auto Trade

The reliance of these countries on the American car market has not been static; it’s continually shaped by global trends, trade policies, and supply chain shifts. A few key trends stand out:

• Diversification vs. Continued Dependence: Some traditional exporters have diversified their markets somewhat (for instance, Japan and Germany now sell heavily in Asia and Europe respectively), but they still count on the U.S. for a large share of sales. Meanwhile, countries like Mexico and Canada remain almost singularly focused on U.S. demand for autos. South Korea has moved closer to the North American-dependent model in recent years, with about half its exports going to the U.S.​reuters.com. In contrast, Germany’s automakers have reduced their export dependence on the U.S. percentage-wise (only ~13% of German export volume now) by expanding in China and other markets​ Still, the U.S. market’s sheer size and high profit margins (especially for SUVs, trucks, and luxury cars) ensure that it stays a top priority for all these exporting nations.
• Impact of Trade Policies: Trade agreements and policies have played a massive role in shaping these dynamics. NAFTA (and now USMCA) encouraged auto companies to build supply chains spanning the U.S., Mexico, and Canada, effectively making North America one integrated production base. USMCA’s updated rules (like raising required North American content to 75%​ ustr.gov and introducing minimum wage rules for a portion of production) aim to rebalance some production towards the U.S., but all three countries are still benefiting from trilateral trade. Similarly, the Korea-U.S. FTA reduced barriers for Korean cars, aiding their U.S. sales growth. On the other hand, tariff threats and trade disputes have occasionally loomed – for example, between 2018 and 2020 the U.S. considered tariffs on imported autos under national security grounds. Allies such as Japan, South Korea, Germany, Canada, and Mexico (who together supply the bulk of U.S. auto imports) all lobbied against broad tariffs, given what’s at stake. So far, outright auto tariffs were averted, but the period did lead to some negotiated arrangements (and certainly caused these countries to consider mitigating strategies). Overall, free trade frameworks have generally enabled the high dependence on U.S. sales, and any shifts – whether new agreements or tariff barriers – quickly influence where companies build cars.
• Industry Shifts and Supply Chain Changes: The automotive supply chain is evolving with technology and post-pandemic economic shifts. One major change is the rise of electric vehicles (EVs) and the push for localized battery production. The U.S. Inflation Reduction Act of 2022, for instance, created strong incentives for EVs built in North America. This has prompted automakers from South Korea, Japan, Germany, and others to announce new U.S.-based EV and battery plants, effectively bringing more of the production closer to the end market (the U.S.) rather than exporting finished EVs. In the long run, this could reduce some export volumes from overseas (for example, fewer fully built cars shipped from Korea or Japan if those companies build them in the U.S.), but it reinforces the reliance on American demand in a different way. The supply chain for traditional vehicles has also seen adjustments – companies are “near-shoring” more production to Mexico or the U.S. to reduce risks from overseas disruptions. The COVID-19 pandemic and semiconductor chip shortage exposed the vulnerabilities of long global supply lines, so automakers in Japan, Korea, and Germany are looking to ensure steady supply for the U.S. market by producing more components regionally or maintaining higher inventory.
• Competitive Landscape: Another shift is the changing competitive landscape of auto exporters. Notably, China has recently become the world’s largest auto exporter (surpassing Japan in 2023 in total global exports), but Chinese-made cars have very little presence in the U.S. due to tariffs and political considerations. If that ever changes, it could alter the hierarchy of who relies on the U.S. market. For now, however, American dealers are filled mostly with vehicles from the five countries discussed above, and those nations have entrenched relationships and brand loyalty in the U.S. market that newcomers find hard to match.

In conclusion, the American car market has been – and remains – a critical lifeline for many countries’ automotive industries. Japan’s automakers rose to prominence largely by conquering U.S. sales; Germany’s luxury marques bank on American appetite; South Korea’s rapid growth was turbocharged by U.S. demand; and Mexico and Canada have deeply tied their manufacturing sectors to serving U.S. consumers. Each country has seen its reliance evolve with economic, political, and technological changes, but none can afford to ignore the U.S. market. As the industry moves into the future (with electric vehicles, new trade norms, and shifting consumer tastes), these nations are adapting strategies but still betting on a simple fact: Americans love cars, and as long as they do, the U.S. will remain a key destination for automotive exports around the world.

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