Automotive Industry in Canada

Published on June 2016 | Categories: Documents | Downloads: 61 | Comments: 0 | Views: 980
of 13
Download PDF   Embed   Report

The document gives you detail description about the automobile industry in Canada.

Comments

Content


The Automotive Industry in Canada 1
The Automotive Industry in Canada.
Opportunities for Swiss Companies.
March 2012
osec.ch
The Automotive Industry in Canada 2
Content Leader:
Geofrey S. L. Green, P.Eng.
President, Pegasus Global Initiatives
[email protected]
Swiss Business Hub Canada uses primary, secondary sources and tertiary sources of
information to produce a variety of reports on the Canadian market for small to medium
sized Swiss enterprises. For further information on our services, please contact:
Elias Bardouniotis, MSc, MBA
Director
Switzerland Trade and Investment Promotion
Swiss Business Hub Canada
154 University Avenue, Suite 601
Toronto, ON M5H 3Y9, Canada
Tel. : +1 416 593 5288
Fax : +1 416 593 5083
[email protected]
While this report is intended to provide an overview of this specifc market and its
opportunities at the time of its edition, each individual manufacturer, exporter or company
may have to conduct their own analysis to get a better understanding of the possibilities
and opportunities available to them. You are encouraged to explore and develop your
opportunities based on research and in-depth analysis. Readers should take note that
the Government of Switzerland does not guarantee the accuracy of any of the information
contained in this report, nor does it necessarily endorse the organizations, associations,
companies and individuals listed herein. Readers of this report should verify the accuracy
and reliability of the information contained herein before making a business decision.
© Swiss Business Hub Canada 2012
The Automotive Industry in Canada 3
The Automotive
Industry in Canada.
This article has been written to familiarize Swiss companies with the Canadian Automotive
industry and to examine opportunities for trade and investment with Canada.
Canada is a giant in the production of automobiles and automobile components for North
America and is the largest producer of vehicles in North America. Total revenues in 2007
were $96.7 billion, while export revenues were $70.5 billion. Total employment is in excess
of 90,000 and 84 percent of the vehicles built in Canada are exported. Capital investment
has averaged $3.5 Billion over the past ten years. Table A compares production of vehicles
in key States and Provinces.
Table A. North American Vehicle manufacturing by locations
Province/State Production Percentage of Total Production
Ontario, Canada 2.5 Million 22%
Michigan, United States 2.25 Million 19.8%
Ohio, United States 1.6 Million 14.1%
Kentucky, United States 1 Million 9%
Total Production (North America) 11.36 Million 100%
Canada is the third largest exporter of automotive products after Japan and the United
States. The total industry employs about 170,000 in over 1000 companies in manufacturing
and an additional 300,000 in distribution.
There are a number of reasons for Canada’s success:
• A 6.4% cost advantage over the United States.
• The calculation of the estimated annual labour costs for a typical automotive.
component manufacturing operation shows that Canadian locations ofer competitive
cost levels compared to many U.S. counterparts.
• An important contributor to Canada’s competitive labour is the lower costs of providing
employee benefts. Under Canada’s national healthcare system, most medical
insurance costs are publicly funded, rather than paid by the employer.
• Better productivity than plants in the United States and Mexico.
• The second lowest corporate tax rate among the world’s top ten automotive countries.
• High Research and Development spending. This is supported by tax credits.
• Capital investment of $3.5 billion per year.
• Availability of qualifed engineers and skilled workers.
The Automotive Industry in Canada 4
• The highest quality of life among the top ten automotive countries.
• Integrated into NAFTA (i.e. Canada, U.S., Mexico).
• Globally competitive.
• The eighth largest automotive sector in the world.
One of the dominant factors contributing to the ongoing success of the industry in Canada
is research and development. The main areas of research include:
• Metal processing
• Advanced materials
• Advanced design
• Visualization and manufacturing
• Information and communications technology
The research and development activities are conducted across Canada, although there is
a concentration in Ontario. Annual investment in research and development exceeds $0.5
Billion per year.
The activities are conducted on a broad front and include:
University based research
• McMaster University
• University of Waterloo
• University of Toronto
Industrial Research
• The major suppliers are working to develop next generation products.
• The major automotive assemblers are working in partnership with suppliers and
universities to meet their future needs.
• Focused research facilities.
• AUTO21 supports more than 300 researchers across Canada.
• National Research Council (NRC).
Canadian Areas of Expertise.
The Canadian industry excels in a number of areas as detailed below:
Metal Processing:
• Advanced casting of light metals
• Cutting and machining
• Sheet and tube forming
• Welding and joining
• Powder metallurgy
The Automotive Industry in Canada 5
Advanced Materials
• Lightweight materials
• Nano materials
• Bio-materials
Advanced Design, Visualization & Manufacturing
• Inspection and vision systems
• Laser imaging
• Tooling and robotics
• Stereo-lithography, laser deposition
• Virtual design
Advanced Technologies
• Mechatronics
• Powertrain engineering
• Hydroforming
• Clean diesels
• Fuel cells, hydrogen & alternative fuels
Manufacturing in Canada.
In Canada, there are ten automobile assembly plants, which produce almost 2.5 Million
vehicles per year. All of these plants are located in Ontario. Table B shows the automotive
assembly plants in Ontario, with details of locations, models produced, ownership and
employment:
Table B. Assembly Plants in Canada
Company Locations Models Produced Ownership Employment
Toyota Cambridge, Ontario
Woodstock, Ontario
Toyota Corolla, Matrix, RAV 4, Lexus
RX 350
Japan 6,000
Honda Alliston, Ontario (2 plants) Honda Civic, Acura CSX/MDX/ZDX Japan 4,300
General Motors Oshawa, Ontario (2 plants)
Ingersoll, Ontario
Chevrolet Impala, Camaro, Equinox,
GMC Terrain
United States 10,000
Chrysler Brampton, Ontario
Windsor, Ontario
Chrysler 300, Town and Country
Dodge Charger, Grand Caravan
VW Routan
United States 9,000
Ford Oakville, Ontario Ford Edge, Flex, Lincoln MKT, MKX United States 14,000
The Automotive Industry in Canada 6
Production of Vehicles.
Below is a summary of the level of activity in the automotive sector in Canada.
Table C. Overall Production of Automobile and Trucks
Passenger Vehicle
Assembly
Heavy Duty Vehicle
Assembly
Motor Vehicle Parts Truck Body and
Trailer Production
Employment 35615 61193 12304
Number of Plants 55 41 944 237
Production Units 1, 479, 161 11321 NA NA
Shipments ($ Billion) 33.1 2.00 19.1 2.6
Exports (Billions) 26.7 1.4 10.2 0.9
Canadian
Consumption
6.4 0.6 8.9 1.5
Export Ratio 81 72 53 35
Automotive Component
Manufacturers.
As shown in Table D, the industry includes many international companies as well as
Canadian companies. The manufacturing of components covers the full spectrum of parts
required to assemble the vehicles. These plants range from manufacturing plastic parts to
stampings and castings.
The supply chain for the automotive industry is global. In order to compete, a high level of
automation is included in the manufacturing processes. The majority of this automation is
designed and built in Canada.
Leading Manufacturers in Canada include:
• CAMI Automotive Inc. (GM-Suzuki)
• Chrysler Canada Inc.
• Continental AG (formerly Siemens VDO)
• Denso Corporation
• Ford Motor Company of Canada Ltd.
• General Motors of Canada Ltd.
• Honda Canada Inc.
• Johnson Controls Inc.
The Automotive Industry in Canada 7
• Linamar Corporation
• Magna International Inc.
• Martinrea International Inc.
• Toyota Canada Inc.
• TRW Inc.
These are the largest companies, but with over 1000 companies in the industry, there is the
excellence and capability to produce parts with zero defects, with on-time delivery to meet
the schedules of the assembly plants, both in Canada and the United States.
Table D. Component Manufacturers
Company Location Specialization Ownership Website
Denso Ontario HVAC Japan http://www.globaldenso.com
Johnson Controls Ontario Electronics United
States
http://www.johnsoncontrols.
com
Linamar Corporation Ontario Precision metallic components for vehicle
transmission and driveline systems
Canada http://www.linamar.com
Magna International Inc. Ontario Automotive systems
Assemblies
Modules
Components
Canada http://www.magna.com
Martinrea International Inc. Multiple components for:
Engine & transmission
Power Steering and Brakes
Fuel System
HVAC
Body & Chassis
Exhaust components
Canada http://www.martinrea.com
TRW Canada Ltd. Ontario Electronic systems
Braking Systems
United
States
http://www.trw.com
Woodbridge Group Ontario Seat Cushions
Seat Frame Components
Occupant Safety Components
Noise/vibration/Harshness Solutions
Composite Sheet Foam products
Cargo Management Components
Canada http://www.
woodbridgegroup.com
The industry has confrmed Ontario as one of the premier locations in the world to research,
design, develop and manufacture vehicles and component parts. Ontario shipments
totalled $26.14 Billion or 95% of total Canadian output.
The Automotive Industry in Canada 8
The automobile assembly plants are supported by a components industry that comprises
over 400 Canadian companies and supplies the assembly plants in Canada, the United
States and internationally.
The industry’s export market is largely the United States. This is because an agreement
was signed between the two countries in 1965. The Automotive Pact provided the sale
of automobiles and parts to be made without duty at the border. This agreement was the
foundation of the automotive industry as it is today. It provided access to the US markets,
but in addition, it was the catalyst to create a major industry.
The agreement had a broad impact. Not only did it present an opportunity; it was the
foundation of a very competitive industry that has been built from that initial agreement.
As a result, Canada began to produce far fewer diferent models of cars and much larger
branch plants producing only one model for all of North America were constructed. In 1964,
seven percent of vehicles made in Canada were sent to the United States, but by 1968, the
fgure was sixty percent. By the same date, forty percent of cars purchased in Canada were
made in the United States and automobile and parts production quickly became Canada’s
most important industry.
The Pact was replaced in 1988 by the Free Trade Agreement between the United States
and Canada and by the North American Free Trade Agreement (NAFTA) in 1994. This tri-
lateral agreement was signed by Canada, the United States and Mexico and is still in efect.
The Ontario automotive corridor extends from Oshawa to Windsor. The main centres and
the number of plants are detailed below:
Burlington 29
Chatham 37
Guelph 36
Hamilton 27
Kitchener-Waterloo 61
Mississauga 137
Oshawa 26
St. Catherines 45
St. Thomas 20
Stratford 22
Toronto 169
Windsor 107
Woodstock 35

Windsor has a large automotive industry because of its proximity to Detroit and the US
Market. With the changes in the industry, the tendency has been for the plants to be
located in the proximity of the assembly plants that they serve. Whereas, Windsor had a
number of assembly plants, now that number has been reduced because of outsourcing
and rationalization. Nevertheless, Windsor remains a centre for the industry.
The Automotive Industry in Canada 9
This article deals with the manufacture of automobiles, but it is necessary to share the full
spectrum of the automotive manufacturing industry in Canada. Therefore the other areas
will be discussed but not in the same depth.
There is no question that the industry in North America is driven by the US market and by
US corporations. But now, due to the economic situation in the United States, Canada is
the location of choice for international companies that want to develop or expand their
markets in North America. Some of the reasons were detailed earlier in this article. But now
one of the main factors is the fscal security in Canada, which reduces the risks for these
companies.
Other Automotive
Sector Activities.
In Table E, there is a breakdown by Province of the other main sectors within the industry.
It can be seen that there is signifcant activity in these industries and the manufacturers are
in clusters to promote their supply chain efciency. The companies are located mainly in
Ontario, Quebec and Manitoba.
Table E. Main Sub-Sectors by Province
Aftermarket Manufacturers
and Rebuilders
Trucks Buses
Province # of Companies Employment # of Companies Employment # of Companies Employment
Ontario 84 10,500 209 18200 14 3100
Quebec 56 5,000 96 8000 10 1300
British Columbia * * 62 2700 5 800
Alberta * * 71 7800 * *
Manitoba * * 25 2400 17 5400
*Blanks indicate low activity
The Automotive Industry in Canada 10
Geographic Breakdown of
Industry Activity in Canada.
Ontario
Automotive assemblers and parts manufacturers are making major investments, positioning
Ontario as one of the world leaders in the manufacture of vehicles and component parts.
Auto parts manufacturing shipments in Ontario totalled $26.14 billion in 2007, or 94.6
percent of total Canadian output. Ontario assembly plants are highly ranked by J.D.
Powers among facilities in North America.
Ontario’s workforce competes favourably in terms of quality and cost against the best in the
world, consistently winning the initial quality survey from J.D. Powers and the Harbour Report
productivity survey. As a region, Ontario has more qualifed engineers per capita than any G7
country. Of Ontario’s roughly 135,000 highly- skilled autoworkers, 43 percent have a post-
secondary education, and on average they stay with an employer for nine years.
Throughout Ontario, world-leading companies collaborate with more than 150 university,
college and public research centres to bring new technology, new products and processes
from the laboratory to the marketplace.
Ontario is the largest producer of light vehicles and components in Canada, with over
1000 plants. There is a manufacturing corridor from Oshawa to Windsor, where most of the
component plants and assembly plants are located. The Ontario component manufacturers
supply assembly plants which are located in Ontario and the United States. Ontario exports
most of the production to the US, so whether it is assembled vehicles or component parts,
delivery to the US has to be efcient. The consolidation in the industry in Ontario has resulted in
the infrastructure necessary to provide fast access to US assembly plants.
Quebec
The Quebec automotive sector comprises over 250 companies and employs approximately
15,000 people in two main market segments: the original equipment market (OEM), and the
secondary market, comprising of replacement parts and accessories.
The automotive sector brings together internationally renowned companies in Greater
Montréal, including Rio Tinto Alcan, Mecachrome and Raufoss Automobile Components
Canada. Montréal’s strong expertise in light metals represents a competitive advantage
with large, cutting-edge research facilities such as the Industrial Materials Institute (IMI),
the Center for Applied Research on Polymers (CREPEC) at the École Polytechnique, and
Concordia University’s Center for Composites.
Manitoba
The automotive industry in Manitoba is centred in Winnipeg. The cluster of companies
specializes in the bus market. Over one third of the North American market is supplied from
this group. The main companies are Motorcoach Industries and New Flyer Industries which
are supported by a diversifed supplier network.
In addition, there are about forty companies building other types of vehicles, including
motor homes, fre engines, etc.
The Automotive Industry in Canada 11
British Columbia
The British Columbia Fuel Cell cluster is the largest in the world, in terms of the number of
companies and employment. The Automotive Fuel Cell Cooperation (AFCC) was formed
in 2008 as a joint venture between Daimler, Ford and Ballard and is now responsible for
the research and product development of automotive fuel cells. The AFCC employs
approximately 200 people to commercialize this technology in automotive applications.
There is a cluster of supplier companies supporting these eforts.
Summary.
We have looked at the Canadian automotive industry and seen that there is a capable
supply chain. But the industry demand is signifcant to a number of other industries:
37% of steel foundry production
17% of rubber production
14% of processed Aluminum
13% of wire goods
9% of carpeting and fabric
8% of glass
This demonstrates the opportunities, not only for conventional automotive parts, but for
other products and technologies that can be applied to present and future automotive
products. The industry is open to new products and technologies that can support it to
become more competitive, better meet environmental requirements, and become greener
and cleaner. This includes the development of hybrid and electric cars (including fuel cells).
The development of these technologies is underway but there are many opportunities for
international companies to participate.
The industry provides a broad spectrum of opportunities for Swiss companies to take
part in its growth. The industry is already international, but there are many opportunities
to expand into Canada for the supply of the North American market. These opportunities
extend beyond components and into new technology and products that can be
incorporated in vehicles in the future. The technology can range from new power systems
such as Fuel Cells to environmental technology and the production of greener vehicles.
The Automotive Industry in Canada 12
More information is available through the websites listed below:
Invest in Canada
http://investincanada.gc.ca/eng/industry-sectors/automotive.aspx
Industry Canada
www.ic.gc.ca/eic/site/gvc-cvm.nsf/eng/00026.html
Ontario: North America’s Automotive Powerhouse
www.ontario.ca/economy
Manufacturers’ Association
www.apma.ca
AUTO21
www.auto21.ca

Osec
Stampfenbachstrasse 85
Postfach 2407
CH-8021 Zürich
Telephone +41 44 365 51 51
Fax +41 44 365 52 21
[email protected]
Osec
Corso Elvezia 16
Casella postale 5399
CH-6901 Lugano
Telephone +41 91 911 51 35
Fax +41 91 911 51 39
[email protected]
Osec
Avenue d’Ouchy 47
Case postale 315
CH-1001 Lausanne
Telephone +41 21 613 35 70
Fax +41 21 613 35 02
[email protected]
Copyright © Osec February 2011. All rights reserved.
Our Hotline 0844 811 812
www.osec.ch
Copyright © Osec March 2012. All rights reserved.

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close