Auto industry making recovery
As 2015 draws to a close, there are signs Canada is moving in the right direction
We started 2015 on the usual grim note about disappearing production and lack of competitiveness in the Canadian auto industry.
But as 2016 draws near, there are slivers of hope shining through. There’s no definitive direction yet, but the conversation’s changing. There’s a little more urgency, a little less resignation to the fact that our fate has been sealed.
Here are few things that show how car manufacturing in Canada may have some staying power after all: The low dollar It may be no fun shopping in Buffalo anymore, but there are bigger things at stake here. The dipping loonie may not be enough to attract new automotive production.
It will, however, go a long way in convincing manufacturers to retain their current footprint.
Our dollar is likely to remain muted for some time, which means companies can plan for the long haul.
The low dollar also means we can be less defensive about our “high cost” of business.
Which brings us to . . . Ray Tanguay The former Toyota executive continues to show he is the right man for the job of advising our auto sector.
In a recent interview with Automotive News, Tanguay made the strongest case for the Canadian auto industry in recent memory.
“There’s perception, and there’s reality,” he told the industry’s go-to publication.
“And the reality is that when you take a holistic approach and look at all the costs, all the indirect costs, we are not that far off” from manufacturing facilities in Mexico and the Southern U.S.
The general consensus is the Liberals will be better for the auto sector. While Trudeau hasn’t released any specific policies, Ontario Premier Kathleen Wynne is putting the province out there
That’s the kind of marketing I have been expecting for a while and it’s great to see someone with the right experience and industry respect trying to spread the message.
Please, let’s give this man an actual office, a budget and staff — like they have in Michigan. The Liberals The general consensus right now is that the Liberals will be better for the auto industry.
We haven’t seen any specific policies from Team Trudeau but Kathleen Wynne is putting Ontario out there. Her reps were in Japan recently trying to drum up interest in automotive investments in the province.
Tanguay also believes that such tours are critical to spreading the word about Canada.
Since even the federal Liberals have a lot at stake in this province, they might be willing to back Wynne and Tanguay in their efforts with both policy and investments. Toyota We lost the Corolla to Mexico, but we got the Rav4, and that may just be a better deal. The Japanese automaker will invest $500 million in its Cambridge, Ont., plant in order to locally build its flagship SUV. Crossovers, SUVs and trucks continue to be high-margin products and, arguably, we make them better than anyone else.
Toyota’s decision — which came with a clear message that they have long-term intent in Ontario — sends strong signals to other automakers. The tide may be finally turning. Kumar Saha is a Toronto-based automotive analyst with global research firm Frost & Sullivan.