Manufacturing AUTOMATION

Scotiabank: Canada lagging other top auto producers

April 30, 2014
By The Canadian Press

A new Scotiabank report on the global auto industry says Canadian exports appear to be stuck in neutral while most other major vehicle-producing countries, including the United States, have diversified their markets by expanding sales outside their home regions.

The report also says Canada accounted for only 20 per cent of all imports to the United States last year, down from 31 per cent in 2000, losing ground to vehicles from Mexico, Europe and Asia.

Scotiabank economist Carlos Gomes writes that Canada remains the second-largest vehicle exporter to the United States after Japan, but notes that they are the only two members of the top 10 that haven’t surpassed their pre-recession output.

The report doesn’t get into the reasons for Canada’s lacklustre performance globally, but says free trade agreements with the European Union and South Korea could provide an opportunity to expand exports outside the United States.


It says Canada still exports nearly 90 per cent of its overall production – meaning the domestic market accounts for only one-tenth of the total – and the United States accounts for the vast majority of sales outside this country.

“Exports to the United States exceeded two million vehicles [in 2013], but shipments outside of North America were virtually non-existent,” the report says. “In contrast, both the United States and Mexico have significantly boosted their exports outside of North America over the past decade. U.S. vehicle exports outside of NAFTA now exceed one million units per annum and account for 10 per cent of overall U.S. production, quadruple the level of a decade ago. Export growth outside of North America has been even stronger for Mexico and totals 20 per cent of vehicle assemblies.”

Gomes said in a phone interview that Scotiabank’s research provides evidence that the auto sectors in other countries have become more diversified, while Canada remains almost wholly dependent on the United States for its exports.

“We know the numbers for Canada [but] we weren’t so sure as to what was happening with, let’s say, the European countries and with the U.S. numbers and the Mexican numbers,” Gomes said. “It’s really showing that Canada has really stood still, whereas everybody else has recognized the changing realities of the new auto industry.”

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