A Revised North American Free Trade Pact—CUSMA has restructured the terms of automotive trade in North America. The revised and expanded terms should lift domestic production and investments while deterring manufacturers from further shifting their operations to lower-cost jurisdictions. However, there will be a greater cost of compliance under the new pact than there was under NAFTA.
Cutting Operational Costs—Demographic and economic signs are pointing to a slowdown in U.S. vehicle sales. In turn, Canadian auto manufacturers are taking measures to cut operational costs so as to preserve their tight margins at a time of falling sales, while also boosting cash reserves to accelerate spending on new technologies.
Disruptive Technologies—Automakers are putting more resources into the development of connected, electric, and autonomous vehicles. Several automakers have mandated a shift in their product mix toward electrification before 2023.