OTTAWA, Nov. 1 /CNW Telbec/ - Canada's auto manufacturers are expected to
lose money again in 2007, before slowly returning to profitability beginning
in 2008, according to a Conference Board report released today.
"Loss of market share by the Big Three automakers and the rise of the
loonie have taken a toll on Canada's auto industry," said Louis Thériault,
Director, Canadian Industrial Outlook Service. "However, the opening of
Toyota's new Woodstock plant in early 2008 will help to increase domestic
production and boost revenues for the sector. Improved production combined
with major efforts by the Big Three to restructure will lead to a small
industry profit of $850 million in 2008."
Industry losses are expected to decline to $550 million in 2007, about
half of the loss recorded in 2006. While the high Canadian dollar is hurting
export prices-thereby cutting revenues-costs are declining even further
because of job cuts, lower production and cheaper imported parts as a result
of the strong loonie.
Although profits are forecast to continue growing through 2011, profit
margins in the motor vehicle manufacturing industry will remain extremely slim
because material and labour costs are expected to increase.
This is the first release of the Conference Board's new Canadian
Industrial Outlook: Canada's Motor Vehicle Manufacturing Industry, published
twice a year. This industry was previously covered in the Board's broader
Canada's Auto and Auto Parts Industry report.
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