Canadian vehicle production set for growth

TORONTO—Economic recovery is revving up car sales in nearly every nation according to Scotia Economics’ Global Auto Report.

The report says the pace of job creation is fueling global car sales and that the ongoing improvement should help even Europe and the US climb out of their deep holes.

Emerging markets are seeing most of the sales growth and the report predicts that in 2011, new car sales in China, Brazil, and India will surpass the combined volumes of Western Europe and Japan — making up roughly 30 per cent of global auto sales.

US vehicle sales also increased in 2010, by 11 per cent in to 11.5 million units. The report expects a further double-digit gain to 12.7 million units next year.

With 80 per cent of Canadian-made vehicles exported to the US, that’s good news for Canadian auto manufacturers, says Carlos Gomes, senior economist at Scotia Economics.

“We expect Canadian vehicle production to increase to 2.4 million units this year, up nearly ten per cent from 2010,” Gomes said.

Much of the production growth in Canada has been driven by US purchases of crossovers and utility vehicles, which increased by 22 per cent — double the industry’s overall growth.

“The key segment in the US that’s doing particularly well is crossover/utility vehicles, such as Equinox and Terrain, which is produced by GM and the Rav 4, which is produced by Toyota here in [Woodstock, Ont.],” Gomes said.

Canadian purchases were also up by seven per cent in 2010. A further two per cent increase is projected for 2011, lifting sales to 1.59 million units.

According to a separate report from DesRosiers Automotive Consultants Inc., most automakers saw overall sales in Canada break records last month.

Ford led that growth with its best December sales in more than a decade, nearly 20,000 vehicles. Mazda, Honda and Subaru also set new records while Chrysler and GM reported gains as well.

The sales increase is “a good leading indicator” of what suppliers can expect in the year ahead, says Canadian Automotive Parts Manufacturers’ Association President Steve Rodgers.

But more importantly, he says, is that production is picking up at most North American plants and “there’s a confidence about 2011.”

Stronger auto sales in both emerging and recovering markets will bode well for the industry as a whole, he said, adding, “there’s opportunity for growth for North American exports.

Leaders in Canadian production in 2010:

TRUCKS

• Chrysler: 290.7
• GM: 235.2
• Toyota: 215.6
• Ford: 209.5
• Honda: 65.3

CARS

• GM: 252.1
• Toyota: 209.4
• Honda: 198.0
• Chrysler: 160.3
• Ford: 89.0