Canada’s motor vehicle and motor vehicle parts manufacturing industries are enjoying a solid start to 2017. American sales continue to speed along at a record pace, which ensures strong demand for Canadian automotive products. Canadian automakers export nearly 9 out of 10 vehicles they assemble to the U.S., and parts manufacturers sell about half their products south of the border.
However, uncertainty surrounding the future of the North American Free Trade Agreement (NAFTA) continues to undermine an otherwise optimistic industry outlook. NAFTA hastened the integration of the North American auto sector, but the Trump Administration has signalled that it is looking to boost production in the U.S., even if heightened protectionism comes at the expense of foreign trade partners, including Canada and Mexico.
The Canadian subsidiaries of the Detroit Three have reached contract agreements with their workers that include stable production volumes through 2020. General Motors is closing its Consolidated Line in Oshawa in 2017, but work on other models should maintain production in Oshawa at current levels. Canadian auto assemblers specialize in the more profitable truck segment of the North American light-vehicle market— which is also a segment in which parts makers have a competitive advantage.
Demand should be sufficiently strongly to sustain parts manufacturing at healthy levels throughout the forecast. The growing export intensity of the auto parts manufacturing industry will help shield parts makers from the closure of the Consolidated Line.
In this webinar, Sabrina Bond presents the short-and medium-term economic and profitability outlook for Canada’s Motor Vehicle Manufacturing Industry and Motor Vehicle Parts Manufacturing Industry. Based on the Conference Board’s Canadian Industrial Outlook Service, Sabrina will cover production, prices, investment levels, employment revenues, labour and material costs, profits and prof