Canadian Industrial Outlook: Motor Vehicle and Parts Manufacturing—November 2020
The Conference Board of Canada
November 2, 2020
This report examines the short-and medium-term economic and profitability outlook for Canada’s motor vehicle parts manufacturing industry.
- To fight the spread of COVID-19, factory closures and stay-at-home orders were announced in mid-March, severely hurting the motor vehicle and parts manufacturing industry’s performance during the second quarter of this year. The effect of the shutdown on output was particularly severe due to supply chain disruptions, while sales suffered as a result of historically low levels of consumer confidence.
- The restart of production in May marked the beginning of the industry’s recovery. Sales rebounded strongly toward the end of the second quarter, kick-starting an upward trend that continued into the third quarter, fuelled by pent-up demand, bargain hunters, and an increased preference for private vehicle ownership.
- Looking ahead to the end of the year and into 2021, the industry’s recovery is expected to decelerate as the coronavirus thwarts attempts to fully reopen the economy. A multi-year recovery is predicted, with sales, output, and employment returning to pre-pandemic levels only by the latter half of 2022.