According to a new report by the Office of Automotive and Vehicle Research at the University of Windsor, none of that money was spent in Canada.
“Canada’s position in the global automotive industry is continuously declining,” said Tony Faria, one of the authors of the report.
The report found that automakers have invested in Canada just once in the last four years. Slightly less than $1 billion US was spent in Canada in 2012.
China, though, has been the big winner. Automakers invested $12.6 billion US there in 2013 — the most since the $13.6 billion US spent in 2011.
“Canada was once the fourth-largest automotive assembly country in the world – it is now 10th,” according to the report.
Auto analyst Dennis DesRosiers says his statistics and those provided from Stats Canada shows “we do indeed get some automotive investment, but radically lower than most of the last two decades.”
He said the University of Windsor report “is accurate in that Canada now gets a very small fraction of global assembly plant investments.”
“We look at only investment that will increase automotive assembly capacity. Either the building of a new plant or the expansion of an existing plant to produce more vehicles,” said Faria.
The Asia-Pacific region now accounts for 50.3 per cent of all auto production. North America accounts for 19.7 per cent.
Union calls report 'a lie'
Unifor Local 444 president Dino Chiodo, whose union represents nearly 5,000 hourly employees at Chrysler’s Windsor Assembly Plant, called the report “a lie” at first blush. Chiodo was travelling when CBC contacted him and he was unable to comment further at the time.
While several automakers have invested in Canada — Ford in Oakville, for example — few have built new factories or increased capacity and added jobs at existing plants.
In 2013, for example, Chrysler’s sales and market share were up in both the U.S. and Canada. Its international deliveries also increased.
However, the report found Chrysler, with three years of profitability under its belt, made one new capacity investment announcement in 2013 totalling $770 million US and 60,000 new units of capacity.
Despite the fact Chrysler is now facing capacity issues in North America, it announced a new assembly plant to be located in Guangzhou, China.
“With the recovery of the global and North American markets, assemblers are continuing to invest in new capacity based on each company’s sales expectations and … forecasts,” the report says. “An amazing 62.6 per cent of all new capacity investment announcements made over the past four years have been in China.”
Faria said China has received more new capacity investment in the last six years than the rest of the world combined.
“There isn't a single silver bullet. An overnight return to a sixty-cent dollar will certainly prolong the industry's slide, but the lack of innovation and generally higher cost climate may minimize whatever comparative advantages we enjoy,” DesRosiers said. “Second, government can't force these changes. A role certainly exists for governments to play, especially in key areas such as energy cost reduction, trade policy negotiations and fostering innovation — but the Canadian auto sector needs to build its own competencies, instead of relying entirely on governments to game the investment conditions.”
Faria said less investment in Canada affects suppliers. Canadian tool and die and mold makers now have to look outside Canada for customers.
“If you’re a Canadian auto parts maker … you’ve got to be looking toward the Southern U.S. and Mexico,” Faria said. “We have to hold on to what we have in Canada, right now.”
Original Article
Source: huffingtonpost.ca/
Author: CBC
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