Automotive | SHOP REPORT | 19
Windsor-area engine plant.
It sounds like good news all around for Canada’s
auto sector. But the industry is vast and complex,
and negative indicators can coexist with positive
ones. For example, vehicle production in Canada
is faltering. A year-over-year comparison shows
car production falling from nearly 80,000 units
in November 2015 to just over 74,000 units in
November 2016. Light, medium and heavy trucks
did a bit better; in November 2015 141,100 of
them were built here, while 142,900 were built in
Dennis DesRosiers, president of DesRosiers
Automotive Consultants, says while Canadian
governments have done a good job in dedicating
resources to help the country’s automotive sector,
getting new investment is still a challenge and we’ll
be doing well if we hold on to what we have.
Despite the decline, Canada still punches above
its weight when it comes to vehicle production.
While Canada accounts for only around nine per
cent of North American auto sales, some 13 to 14
per cent of vehicles built in North America are
made here. But that doesn’t translate into similar
success in the auto parts sector.
“We get more than our share of vehicle
production,” Desrosiers says, “but our auto parts
sector has rarely gotten much more than six or
seven per cent of North America production. And
it’s down in the five per cent range now, well below
what you might consider our ‘natural’ share.”
Overall, Canada’s auto sector is still struggling
to recover to where it was before the 2008 financial
crisis. Despite a partial recovery, the industry is
still a long way from getting back to that level,
“Our recovery is very weak compared to the US
and Mexico. One reason is that basically the US
southern states and Mexico are providing better
options for suppliers. They’ve both been huge
winners in the last decade. That acts as a magnet to
drive the supplier sector into those jurisdictions. So
they’ve grown at the expense of Canada.”
Another reason is the falloff in automotive-sector
investment in Canada following the cancellation
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of the Auto Pact in 1989. “That may seem like a long time ago,”
DesRosiers says, “but the investments under the pact carried us
forward into this century. The investments that didn’t come after the
cancelling of the Auto Pact were still hurting us a decade later. Most
multinationals left Canada. They were here primarily because of Auto
Pact rules. There are very few of them left. They consolidated into the
US and Mexico.”