Canadian Legislative Issues

 

The Conference Board of Canada released a report on the Canadian automotive industry which does not depict a bright future for the industry in terms of production growth. Although 2015 was a record year for car sales in Canada, the production of cars is decreasing and moving South of the border. 

"Despite the strong short-term results, the Canadian auto assembly industry is struggling to grow. Over the next five years, no growth in production is expected in Canada," stated Michael Burt, the Conference Board’s Director of Industrial Economic Trends. 

The report indicates that the automotive industry will be facing many challenges in the coming years as manufacturers are turning to the southern United States and Mexico for car production. Although the Trans-Pacific Partnership agreement will increase competition for Canadian manufacturers, the agreement has yet to be ratified. 

Despite the fact that low gas prices and the high demand for trucks and cross-overs is beneficial for Canadian assembly plants, they will not be able to measure up to the substantial investments dedicated to assembly plants in the United States and Mexico. 

These challenges currently facing the Canadian automotive industry may have a significant impact on NAFA fleet managers in the long run.