Production achievements (PC+UV): Canada 10 months 2016 and forecast 2017
- In the first 10 months of 2016, Canadian automotive production (Passenger Cars + Utility Vehicles) increased by 2.9%, down from 6.4% in 2015, following model shifts to Mexico. The market grew by 3.1% in 2016 compared to 2015.
- In 2016, more than 85% of production was exported to the US and Mexican markets. The level of Canadian production is heavily dependent on the growth of the US and Mexican markets. In 2016, the US market stabilized (+ 0.1%) compared to 2015, while the Mexican market rose sharply (+15.2%).
- Two scenarios can be established:
• A first scenario of stability of US markets (+ 0.1%), with consequently growth of the Mexican market, however smaller than in 2017 (+ 5%).
The US car market will likely stabilize pending a clarification of the Trump administration's policy choices. The Mexican market should continue to grow but however less strongly if consumer confidence is affected by uncertainty about future US policy. Under this assumption, Canadian production is expected to stabilize (-0.7%).
The US car market will likely stabilize pending a clarification of the Trump administration's policy choices. The Mexican market should continue to grow but however less strongly if consumer confidence is affected by uncertainty about future US policy. Under this assumption, Canadian production is expected to stabilize (-0.7%).
• A second scenario of positive growth in the US (+ 1%) and Mexican (+ 7%) markets in 2017. The US market could slightly increase in registrations, driven by an economic growth which is expected to strengthen in 2017. Regarding Mexico, economic growth should be driven by a stronger demand for imports from the United States, if the economy dynamic of the US is positive. Under this assumption, growth of Canadian production could be + 1% in 2017, a level within the current production capacities of the country.
- It is to note that no transfer of vehicles from Canada to the USA during the year 2017 is currently planned.
Moreover, a tax on imported vehicles could only be implemented in a context of a renegotiation of the NAFTA. And results of this potential renegotiation are difficult to envisage during the 2017 year.
Moreover, a tax on imported vehicles could only be implemented in a context of a renegotiation of the NAFTA. And results of this potential renegotiation are difficult to envisage during the 2017 year.
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