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Mexico’s auto industry gaining at Canada’s expense

Auto worker Valerie Stades works on a Cadillac at the General Motors Oshawa assembly plant Aug. 28, 2013.

Moe Doiron/The Globe and Mail

Canada's share of North American auto making capacity is expected to decline further by 2020 as Mexico continues its strong growth.

By the beginning of the next decade, Canada is expected to hold about 12 per cent of North American vehicle capacity, compared with 16 per cent in 2012, Jeff Schuster, senior vice-president of forecasting for LMC Automotive told an industry conference Thursday.

"Mexico we see as the winner," Mr. Schuster.

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Much of the gain comes from the billions of dollars of investment being pumped into the country by global auto makers. One of those investments began paying off as recently as Tuesday as Nissan Motor Co. Ltd., opened the first phase of a $2-billion (U.S.) plant, its third assembly plant in Mexico.

The original attraction for many auto makers was the low level of wages and proximity to the U.S. market, but government incentives and access to the booming markets of South America also make Mexico a favourable location.

Mexico had historically been a source of low-cost cars, compact cars and trucks, but has recently landed big investments by luxury manufacturers, Mr. Schuster added.

He expects BMW AG to announce an investment in Mexico soon to build its 3-Series cars.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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