DAILY NEWS Apr 14, 2014 2:23 PM - 0 comments

Global auto investment up 9.2% with no new Canadian capacity: report

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2014-04-14

WINDSOR, Ont.-- The Annual Automotive Assembler Investment Report, prepared yearly by the Office of Automotive and Vehicle Research (OAVR) at the Odette School of Business(University of Windsor)since 1995, reports that $17.6 billion in auto assembler new capacity investments were announced globally in 2013. This is a 9.2% increase from the $16.1 billion reported in 2012.

China led the way again in investment announcements with 72.2% ($12.666 billion) of all assembler new capacity investments being made there. Brazil was a distant second with new capacity investments of $1.561 billion. Of 62.6% of all new capacity announcements made over the past four years (a total of $46.923 billion) have been in China, the report said. 

Canada once again had no new assembler capacity investment announcements during 2013. Canada has had no assembler investments in three of the last four years and, over a four year period from 2010 to 2013, has received less than one percent of all global capacity investments, the report said. 

In Canada, automotive assembly fell by 3.7% in 2013 to 2.4 million units in a North American market that grew by nearly 5 percent. There are continued concerns over the competitiveness of the Canadian automotive industry. The stronger Canadian dollar, higher labour costs and the high incentives offered by the U.S. and Mexican governments, make it difficult to attract automotive investments, the report added.

New capacity announcements from the Detroit 3 were made for China, Russia and the United States, however.

Total global vehicle production was 81.9 million units in 2013, up 3.3% from 2012. North American levels are projected to grow back to volumes approaching normal pre-downturn levels by 2015. The majority of the new capacity added in North America will be by the New North American Manufacturers (NNAMs), not the Detroit 3, and will be added in the southern U.S. and Mexico, said the report.

Outside of North America, production will be growing significantly in the Asia/Pacific region (especially in China, India, Indonesia and Thailand), in Eastern Europe (especially Russia, the Czech Republic, Poland, Romania and the Ukraine), and in South America (Brazil and Argentina).

 North American parts makers "must continue to look to the Chinese and Indian automotive markets and assemblers. Major Chinese and Indian assemblers such as Geely, Chery, Great Wall Automobile, Nanjing Automobile, Changfeng, ChangAn, Tata, Mahindra & Mahindra and others will be growing their parts purchasing in China, India, Eastern Europe, Latin America and, in the not too distant future, North America," said the report. 

Future production growth from the Detroit 3 will be coming primarily outside of North America.



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