Record sales are boosting production, but investments in Mexico and the US will wreak havoc on Canada's sector.
April 19, 2013
by PLANT STAFF
TORONTO – A sharp rebound in US auto sales and growth in the Canadian and Mexican markets has led to an 18% increase in North American automotive production, with double digit increases seen in all three countries.
Production in 2012 totalled close to 15.4 million units, reaching the highest level seen since 2005, according to a report from TD Economics.
To a lesser extent, unfavourable exchange rates around the world – in Japan especially – also helped to give North American production a boost, as automakers have been shifting more production here, moving toward a ‘build where you sell’ model. The Detroit-3 automakers, however, lost market share of sales last year. The production-to-sales ratio across the continent was 90%, up from the 80% that was typically seen in the years leading up to the recession, and the highest level seen since 1997.
Foreign automakers now represent roughly 45% of auto assembly output in North America.
With the outlook for US auto sales over the next few years positive, expected to reach the 16 million unit mark by the end of 2013, the TD report expects North American automotive manufacturing to continue to grow as well, albeit, like sales, at a slower pace than seen in 2012. The increase, however, will not be spread evenly throughout the continent. In both Mexico and the US, production of light vehicles is expected to record further healthy gains over the next few years. In contrast, the number of vehicles assembled in Canada is likely to hold relatively steady compared to last year’s turnout.
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