Toyota outproducing Big Three omen of bigger industry shifts

AUTOS

• Toyota Canada Inc. out- produced its Detroit- based counterparts for the first time in 2015, a sign of the shifting dynamics in the Canadian auto industry that are poised to accelerate if the Trans- Pacific Partnership is implemented.

Although the final numbers have not yet been released, Toyota Canada’s new CEO Larry Hutchinson said the company had produced 14,000 more units than Gen- eral Motors Canada at the end of November and “that gap probably widened” in December.

That would make 2015 the first year a Japanese manufacturer has been the l argest vehicle producer in Canada, a shift that’s occurred as the Detroit Three have gradually moved production to the United States and Mexico.

It’s a notable change for an industry undergoing a period of substantial flux that may only get more turbulent if the federal Liberals implement the TPP trade agreement as it stands.

“Honestly, for me it’s not about beating the Detroit Three or anyone else,” Hutchinson said in an interview Monday at the North American International Auto Show in Detroit.

“Tome, it’ s about our philosophy of building where we sell and contributing to the Canadian economy ... Toyota’s a good contributor to society in Canada, and I certainly hope the government thinks about that and gives consideration as to what the right policies are from a global point of view.”

Not surprisingly, Toyota Canada has been a vocal supporter of the TPP, which will phase out the existing 6.1 per cent tariff on imported passenger vehicles over five years once implemented — a move that is expected to lower the cost of Japanese-made vehicles for Canadian consumers.

Hutchinson said the TPP wouldn’t directly affect Toyota’s production levels in Canada, but it will make the automaker more competitive at the dealership level, which could impact investment down the road.

Without t he TPP, “it doesn’t give us as many resources to do the other things we’d really like to do in Canada and that to me is where the negative comes in,” he said. On the other side of the debate is Ford Canada CEO Dianne Craig, who has been the only CEO of a Canadian auto manufacturer to publicly speak out against the TPP.

In particular, Craig is critical of the fact that the U. S. has negotiated 25 years to phase out its vehicle tariff, while Canada only has five.

“The Canadian automotive industry is at an inflection point and 2016 is a very important year for the industry,” Craig said in an interview.

“We need reasons to invest in Canada and TPP was a big disappointment for us. … We see no upside at all for Canadian exports. The agreement didn’t do anything to promote Canadian investments in Canada, and that’s why I was vocal about it.”

Craig, together with her counterparts at GM and Chrysler, recently met with International Trade Minister Chrystia Freeland to voice concerns about the TPP. She said she “felt very optimistic coming out of the meeting.”

Ford has been a victim of the turmoil in the Canadian auto industry in another sense, losing the sales crown it held for five years to Fiat Chrysler Automobiles in 2015.

Craig blamed the decline in sales, which were down 4.6 per cent from 2014 levels, on the company’s shift to an aluminum version of its popular F-150 pickup truck, which hurt supply, as well as a decision to reduce sales to rental fleets.

“That is behind us for ’ 15, so in ’ 16 we will be in very good shape in terms of capacity and, assuming the industry’s going to be strong again like we think it will, then we’ll be in great shape,” Craig said.