Japanese automakers keep Canadian market healthy: report (July 01, 2007)

Despite downsizing by Detroit’s “Big Three” automakers, Canada’s auto industry remains healthy thanks to Japan-based manufacturers, according to a report released by Statistics Canada’s Canadian Economic Observer.

The report stated that exports by Ford Motor Co., General Motors Corp. (GM) and Chrysler Group peaked at $51 billion in 1999, and have since fallen by one-third. By comparison, Japanese automakers have doubled the level of vehicles they manufactured in 1998 — producing approximately 900,000 vehicles in Canada in 2006 — for a 36 per cent share of the domestic market.

“On the whole, Canadian consumers are now buying almost as many overseas models as North American brands,” the report said. “In the car segment, more overseas brands than North American have been sold in Canada every year since 2001. Even in the popular SUV segment, overseas brands have practically caught up with the traditional Big Three.”

The report also said that such Japan-based carmakers as Toyota Motor Corp., Honda Motor Co. Ltd. and CAMI Automotive Inc. — a joint venture between Suzuki Motor Corp. and GM — have made more inroads in Canada than in most other countries.

Contrary to widespread belief, Japanese automakers are actually constructing parts assembly plants in North America, the report said, thereby eliminating the need to import components from overseas. “This contradicts the impression, held by many, that the Japanese-owned plants in Canada only assemble high value-added parts, such as engines imported from abroad. In reality, most Japanese firms make their engines locally.”