Canadian Industrial Outlook: Motor Vehicle Manufacturing—Spring 2017
The Conference Board of Canada, 16 pages
July 26, 2017
This report examines the short-and medium-term economic and profitability outlook for Canada’s motor vehicle manufacturing industry.
- U.S. Economy—Broad economic conditions remain strongly positive for Canadian motor vehicle manufacturers. Low fuel prices, robust labour markets, low interest rates, and a favourable currency situation have pushed demand south of the border to record levels for two consecutive years, and the industry’s financial performance is improving as a result.
- Foreign Competition—Mexico has recently eclipsed Canada in terms of relative contribution to North American light vehicle production. Generous government subsidies and low wage costs for Mexican producers are a direct threat to Canadian market share, pushing Canadian automakers to streamline operations and consolidate production in high-value-added light truck assembly.
- Trade Uncertainty—Due to its heavy reliance on internationally integrated supply chains, the current uneasiness in North American trade relations poses a risk to automakers’ investment and production on Canadian soil.