Canada’s Motor Vehicle Manufacturing Industry: Industrial Outlook Spring 2012

This report examines the short-and medium-term economic and profitability outlook for Canada’s Motor Vehicle Manufacturing Industry.

Document Highlights

• Surging Sales—Strong replacement demand, together with low financing rates and a desire for better fuel efficiency, are driving sales. As a result, buying intentions remain strong despite soft macroeconomic fundamentals.
• Moderating Raw Material Prices and a Lower Loonie—The European debt crisis and softer growth in developing countries will weigh on oil and primary metals prices. This will lead to lower material costs for automakers and a slight weakening of the Canadian dollar, both of which will benefit profits.
• Rising Competition—Honda and Toyota have largely recovered from their losses last year. Their comeback will increase competition in the industry, squeezing the already-thin margins.