Can Canadian Auto Producers Really Remain Competitive in a Global Economy that Includes China?
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| The Mazda 6 will now be built in China. (Photo: Mazda Canada) |
Yesterday, January 21, the very same day that Ford announced plans to build both its European Mondeo model and start production on Mazda's new 6 in China, according to Ward's Automotive Reports, projected Canadian auto production numbers fell.
While 2003 has hardly begun, on the whole estimated industry production is down 4.3% compared to the same time last year. Specifically, the estimated calendar-2003 Canadian vehicle production now stands at 113,888 units compared to 118,986 new cars, trucks, SUVs, vans and crossovers produced in 2002.
Does this provide insight on a disturbing trend or is it just a random fluctuation that, on the whole, has no bearing on Canada's long term automotive manufacturing industry condition?
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| Dodge's popular Caravan, the number one selling vehicle in the nation, is produced in Canada. (Photo: DaimlerChrysler) |
Without overreacting, it's safe to say that the majority of Chinese production will serve China's burgeoning market, which passed the million units sold mark last year. That said it makes sense that in the long run most manufacturers will attempt to take advantage of cheap labor prices in a country highly skilled in manufacturing processes, and begin importing to North America and abroad, as long as import duties and restrictions remain reasonable.
Another chink in the Canadian production armor, which is heavily dependent on the Big 3 carmakers, shows long term North American buying trends in the car vertical favoring Japanese and European brands. They are well ahead of most domestics in quality and driving dynamics while cash prices have started to become more competitive. After all, the domestics have spearheaded retail 0% cash back incentive programs while import automakers such as Honda and Toyota haven't had to 'give away the farm' in order to spur on sales, even though both the Accord and Camry are near the top of the charts in retail numbers.