Wednesday, November 26, 2008

Conference Board of Canada Auto Industry Report

Canada’s Automakers To Lose $1.7 Billion In 2008

Ottawa, November 25 — Canada’s auto manufacturing sector is expected lose money for the third consecutive year in 2008, with losses ballooning to $1.7 billion this year, according to the Conference Board’s Canadian Industrial Outlook: Canada’s Motor Vehicle Manufacturing Industry.

“Canadian auto manufacturers remain caught in a maelstrom of cyclical and structural industry changes, a trend that is unlikely to improve until at least 2010,” said Sabrina Browarski, Economist.

Despite aggressive price cuts and sales incentives, anemic sales figures highlight the difficulties faced by automakers in sustaining consumer demand. New vehicles sales in the U.S. are expected to fall to their lowest level since 1992 in 2009. Even the recent decline in the Canadian dollar will provide little help to exports.

In line with weaker demand from U.S. consumers, new vehicle production is forecast to decline by 15.3 per cent this year. With another decline expected in 2009, production will fall to an eight year low.

Canadian motor vehicle manufacturers will continue to lose well over $1 billion in 2009. U.S. consumer sentiment and economic conditions are expected to improve in 2010, leading to a rebound in the Canadian industry’s financial results.

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