This report examines the short-and medium-term economic and profitability outlook for Canada’s Motor Vehicle Manufacturing Industry.
Canada’s Motor Vehicle Manufacturing Industry: Industrial Outlook Autumn 2011
Canada’s Motor Vehicle Manufacturing Industry: Industrial Outlook Autumn 2011
Industry Sector Economics
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- Improving Sales—After more than three years of spending austerity, there is a lot of pent-up demand. Strong replacement demand, increased manufacturer’s incentives, and low financing rates are driving sales. Buying intentions remain strong.
- High Material Costs Squeezing Profit Margins—Prices for primary metals, such as iron and steel, are high. Material costs, which make up 80 per cent of the total cost of production, are squeezing profits and profit margins.
- More Incentives—After falling considerably during the recession, the use of incentives to lure customers is rising again. Although this does help sales, it has a negative effect on manufacturers’ bottom lines.
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