New directions for Ontario auto industry

Ontario automotive alliance promoting increased trade

August 4, 2011   by Erika Beauchesne

TRAVERSE CITY, Mich.—Members from Ontario’s auto manufacturing sector have banded together to boost investment in what they say is a rapidly changing industry.

The new Ontario Automotive Communities Alliance consists of representatives from auto manufacturing hubs in the Waterloo, Chatham-Kent, Windsor-Essex, and Woodstock-GTA regions.

“We all have a similar goal—to attract foreign direct investment and enhance business opportunities— so we need to work together,” says Bill Elliot, vice-president of business development with Canada’s Technology Triangle for the Waterloo Region.

“Even though we’re competing with each other, it’s the same value chain. Lots of jobs in one city positively affects all of us,” he says.

Currently, they’re working with OEMs as well as Tier 1,2, and 3 suppliers.

This week the alliance headed to Traverse City, Mich. to promote Ontario’s auto manufacturing talent at the Centre for Automotive Research’s annual CAR Management Seminar.

It’s been pitching the Canadian investment story and convincing global players to plug into the province’s manufacturing hub.

“We have a 400km stretch from Oshawa to Windsor. It’s sustainable and compact, when you compare it to other jurisdictions like the U.S. where the manufacturing corridor is more fragmented,” Elliot says.

Ontario’s auto industry took a beating during the recession, but the pace of recovery is picking up.

The Conference Board of Canada forecasts the country’s auto assembly industry’s profits to hit nearly $1 billion this year. For parts manufacturers, the projection was $455 million.

Adding to the momentum have been recent investments from both the federal and provincial governments, including the University of Windsor’s $112-million Centre for Engineering Innovation and Oshawa’s $100-million GM Automotive Centre of Excellence.

As Ontario manufacturers turn the corner on the economic downturn, they’re heading into a very different industry—one propelled by technology.

Intelligent and connected vehicles present “huge” opportunities for suppliers, Elliot says.

“The stuff GM is coming out with in terms of ONSTAR is just mind-boggling. They’re looking at technologies now that you would think were for the aerospace sector.”

Elliot says Canada has one of the most generous R&D credits among G8 countries and manufacturers should be taking advantage of it.

Intelligent vehicles alone won’t sustain the auto industry; advances in fuel-efficiency will be key.

“Green technologies are going to be very important for the future of auto manufacturing in Ontario,” says Eric Shapiro, spokesperson with the province’s Ministry of Economic Development.

The province has shelled out upwards of $50 million in electric vehicles rebates and smart grid upgrades to support those technologies.

Shapiro says the recent string of investments will keep Ontario’s auto sector competitive.

And it will need to be, as both consumers and manufacturers demand more fuel-efficient vehicles and manufacturing processes.

“The supply chain is changing rapidly. We’re seeing more products and services for green vehicles, whether its lightweight materials, fuel cells or electric vehicles,” Elliot says, pointing to the recent $545 million investment for energy efficient plant upgrades at Toyota’s Cambridge and Woodstock plants.

“These investments aren’t just going into greening the manufacturing process, but the whole supply chain.”

Steve Rodgers, president of the APMA, agrees.

“The green sector will be a very significant factor if you include the whole bio fibers material, the whole issue of lightweighting and the new green powertrain technologies,” Rodgers says.

“It is definitely an area that all suppliers should be thinking about and potentially investing in. To survive you need to innovate and to be different. This is a new area and a potential opportunity to differentiate oneself as a supplier,” he adds.

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