A new study by researchers at the University of Windsor and the Automotive Parts Manufacturer's Association says Canada continues to fall behind when it comes to global investment in the automotive industry.
The Annual Major Automotive Assembler Investment Announcements Report says automakers announced $24.1-billion in new investment in 2014. The lion's share, $12.7-billion went to plants in China. The U.S. was a distant second with $4.2-billion, but in Canada, there were no new assembler capacity growth announcements. Canada has had no new investment in four of the last five years, and since 2011, has only received $180-million or 0.2%.
The study does not include retooling like the investment being made currently at the Windsor Assembly Plant by Fiat-Chrysler Automotive.
"At one time Canada was the fourth largest. Now we're tenth," says study co-author Tony Faria. "China is attracting the investment because it's a whopping market. Over 21-million vehicles were sold in China last year compared to the 1.8-million sold in Canada."
However, Faria says Canada would be better served taking lessons from Mexico. "We have to be more aggressive in pursuing the companies," he says. "Canada has generally capped incentives at 20% of the cost of the investment. Mexico will pay up to 80%."
There is one note of optimism in the report. It says vehicle assembly climbed 4.8% in 2014 after a down year in 2013. Nearly 2.5-million vehicles rolled off Canadian assembly lines as the North American market grew 4.8%. The report says total global vehicle production will likely hit an all-time high next year with the majority of new vehicle capacity in North America, the southern U.S. and Mexico.
