Auto makers and parts manufacturers expected to post strong profit
growth thanks to rising demand
OTTAWA, June 16, 2014 /CNW/ - Booming vehicle sales on both sides of the
border are boosting industry profits for Canadian auto makers and motor
vehicle parts manufacturers. Pre-tax profits for Canadian auto
manufacturers are expected to reach $1.3 billion this year, their
highest levels since 2002, according to The Conference Board of
Canada's Spring 2014 Industrial Outlook publications.
"It was a chilly start to the year for car sales but the spring thaw has
brought customers back to the car lots at record-breaking levels," said
Jacqueline Palladini, Senior Economist. "American consumers, in
particular, are replacing their older vehicles due to a steady increase
in income, jobs, and credit availability."
Canadian auto makers are expected to post pre-tax profits of $1.3
billion in 2014, their highest levels since the recession.
Canada's auto manufacturing industry is expected to add approximately
2,900 jobs in 2015.
Mexico is expected to surpass Canada in vehicle exports to the U.S. for
the first time in 2015.
Retooling at several Canadian plants and increased competition from U.S.
and Mexican facilities drove down auto production in Canada by 3.6 per
cent in 2013. This year, Canadian production will increase by 3.1 per
cent. The revamped auto plants will be better positioned to take on
growing demand and the drop in the value of the Canadian dollar will
ease competitive pressures somewhat.
Higher production this year and investments at several plants will
result in job gains later this year and next. The industry is expected
to add 2,900 jobs in 2015.
Similarly, Canada's motor vehicle parts manufacturing industry is
expected to have a strong year in 2014. Robust demand for parts from
manufacturers in Canada and the bordering U.S. states will boost
industry production by 5.2 per cent this year. Parts producers are
expected to generate healthy pre-tax profits of $1.5 billion in 2014.
SOURCE: Conference Board of Canada
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