Canadian Manufacturing

Canada’s auto parts production growth to stall in 2013: CBOC

The report says that since 2002, Canadian parts manufacturers have lost considerable market share in the United States to their Mexican counterparts



OTTAWA—Following a strong year in 2012, production in Canada’s auto parts manufacturing industry will slow significantly this year, according to The Conference Board of Canada’s Canadian Industrial Profile.

“The motor vehicle parts industry will produce only marginal growth this year,” said Michael Burt, Director, Industrial Economic Trends. “However, this slowdown should only be temporary. U.S. car sales are expected to reach their pre-recession level next year, which will drive parts production higher in the next couple of years.”

Vehicle parts manufacturers are expected to post pre-tax profits of $1.16 billion in 2013, down more than 16 per cent from 2012 levels but well above pre-recession levels.

Since 2002, Canadian parts manufacturers have lost considerable market share in the United States to their Mexican counterparts.

Parts production will edge up just 0.1 per cent this year due to weak demand from automakers in late 2012 and early 2013. Production is expected to increase 5.5 per cent next year, in line with strong gains in U.S. vehicle sales. However, with the ongoing shift in North American vehicle assembly away from the U.S. Midwest and Ontario to the southern states and Mexico, the long-term growth of the auto parts sector is threatened.

The Canadian Industrial Profile Service is part of The Conference Board of Canada’s Industrial Economic Trends research. It produces outlooks for 23 industries each year, with the Summer 2013 edition focusing on Aerospace Products Manufacturing, Furniture Products Manufacturing, Motor Vehicle Parts Manufacturing, Paper Products Manufacturing, Printing Services and Wood Products Manufacturing.

The report can be obtained for a fee at the Conference Board of Canada’s website.

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