EDC lends cash to Volkswagen in bid to help Canadian parts suppliers
Loan designed to help small Canadian auto parts makers supply VW's U.S. and Mexico plants.
Volkswagen Group is getting $525 million in corporate financing from Export Development Canada (EDC) in a move to boost sales by Canadian suppliers to the global auto giant.
The financing is focused on Volkswagen’s expansion in the southern U.S. and Mexico.
Carl Burlock, the EDC’s senior vice-president, financing and investment, says the financing is about relationship-building, both for EDC and Canadian SMEs in the tooling and automotive supply industries. “The value here is that qualified Canadian SMEs get a real chance to be considered by a major industry player, where they might not have an opportunity to gain that kind of access on their own,” Burlock said in a statement.
The EDC, Canada’s leading provider of financing and insurance for Canadian businesses with sales or business in other countries, targets companies like Volkswagen whose procurement needs match up with Canadian expertise.
“With the southern U.S. and Mexico increasingly becoming prime production locations for global automakers, EDC has a role to play in making sure that Canadian companies have the opportunity and financial wherewithal to compete for that business,” Burlock said. “When Canadian companies win business after our introductions, they won’t be left on their own. EDC can provide them with financing and insurance solutions to support their growth in these new markets.”