Canada shut out of global auto assembly investment again
Global report tracks most capacity expansion to China and Brazil.
WINDSOR, Ont. — Of the $17.6 billion global new capacity announcements made by automotive assemblers in 2013, Canada’s share was zero as it failed to get on the board for the third consecutive year, according to annual report prepared by the Office of Automotive and Vehicle Research (OAVR) at the University of Windsor’s Odette School of Business.
Over a four-year period from 2010 to 2013, Canada has received less than one per cent of all global auto assembly capacity investments.
The Annual Automotive Assembler Investment Report notes capacity investments were up 9.2% from the $16.1 billion reported in 2012, with China leading the way at 72.2% (almost $12.7 billion).
Indeed, 62.6% of announcements made over the past four years (more than $46.9 billion) have been for China. Brazil was a distant second at almost $1.61 billion.
The report also notes assembly in Canada fell by 3.7% in 2013 to 2.4 million units as the North American market grew nearly 5%. It identified the stronger Canadian dollar, higher labour costs and the generous incentives offered by the US and Mexican governments as barriers to investments in Canada.
Global vehicle production was 81.9 million units, up 3.3% from 2012. The report forecasts a return to pre-downturn North American volumes by 2015. Most new capacity will come from New North American Manufacturers (NNAMs), not the Detroit 3, and will go to the Southern US and Mexico.
The report observes production will grow significantly in the Asia/Pacific region (China, India, Indonesia and Thailand), in Eastern Europe (Russia, the Czech Republic, Poland, Romania and the Ukraine), and in South America (Brazil and Argentina).
“North American parts makers must continue to look to the Chinese and Indian automotive markets and assemblers,” the authors advised in a release. “Major Chinese and Indian assemblers such as Geely, Chery, Great Wall Automobile, Nanjing Automobile, Changfeng, ChangAn, Tata, Mahindra & Mahindra and others will be growing their parts purchasing in China, India, Eastern Europe, Latin America and, in the not too distant future, North America.”