By on May 10, 2013

2010ChevroletCamaro-05-1

More than any other country, Canadian-built vehicles seem to have an inordinate amount of foreign parts content, according to a study done by Scotiabank Economics.

The Windsor Star reports that Canadian made cars have an average of $15,000 worth of foreign parts content, compared to $11,000 in the U.S., $10,500 in Mexico and $10,000 in Western Europe. The global average is said to be $7,400.

Scotia’s chief economist Carlos Gomes cited engines as the costliest foreign component, stating

“Despite several top-notch engine plants in Canada, over 80 per cent of all vehicles built in Canada contain imported engines.”

Transmissions and electronic systems also rounded out the top 3, and Gomes noted that the lack of a strong base for these kinds of parts means Canada’s auto parts trade deficit will only expand in the future. Furthermore, the vast majority of Canadian auto parts are not exported, which doesn’t help matters

 

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16 Comments on “Canadian Built Cars Have The Most Foreign Parts Content...”


  • avatar
    bumpy ii

    No surprise there. I would think the vast majority of that foreign content originates in the US and Mexico thanks to NAFTA. No reason for parts suppliers to establish duplicate facilities to serve the smaller Canadian production.

  • avatar
    Vance Torino

    “This is Captain Obvious, reporting from Windsor.” [Renaissance Center and Detroit riverfront in background]

    Scotiabank! Best economists in ALL of Halifax! ;)

    • 0 avatar
      wmba

      I live in Halifax, Vance. Scotiabank moved head office to Toronto a hundred years ago, 40 King St. W. Perhaps you’re not up on current affairs?

      So this rather vapid report can be laid at the feet of Ontario economists and the mindset of the GTA, a foreign entity entirely residing within Canadian borders and oblivious of the fact. They assume the rest of Canada thinks like them.

      Over and out.

  • avatar
    DC Bruce

    The question is, given the existence of NAFTA, does it really make sense to use the term “foreign” with respect to products (or component parts) that originate in either the U.S., Canada or Mexico? In other words, for a Chrysler 300 built in Canada, does it make sense to think of the engine as “foreign-sourced” if it’s built in the U.S.? Any more than does it makes sense for a U.S customer to think of a Canadian Chrysler 300, a Mexican Ford Fusion or an Ohio-built Honda Accord as a “foreign car”?

    Obviously, the three countries are separate politically. But, in the absence of trade barriers between them, the only thing that makes a Canadian-built Chrysler “foreign” in the U.S. is the currency exchange associated with paying for it.

    • 0 avatar
      28-Cars-Later

      I see your point, but I must interject; removing the onus of being “foreign” from our minds is just what the globalists want. Canada and Mexico, while friendly, are still sovereign nations and any product of them is still foreign to one from the United States.

      • 0 avatar
        Brian P

        The report is overly simplified and doesn’t account for the integrated nature of the Canadian and US auto manufacturing sector, in particular. There are plenty of parts that are made at Canadian parts plants and cross the border to a US assembly plant and vice versa, sometimes multiple cross-border trips for the same vehicle. It doesn’t make sense in this type of market to pigeonhole where everything is coming from for any particular vehicle, and it certainly wouldn’t make sense for a vehicle manufacturer to localize ALL of that vehicle’s parts manufacturing just to appease the whims of an analyst writing an article like this.

        In fact, I can’t think of a single US-made vehicle that doesn’t include at least some Canadian content. The existence of a company like Magna pretty much ensures that …

        • 0 avatar
          28-Cars-Later

          That’s a good point, maybe we’d want to expand on our definitions of “domestic” and “foreign”, would it be as such based on the point of assembly, or the parts content within?

          I think traditionally we’d use both, but today its certainly commonplace to have a product built in point A, with content from point B, and being designed in point C.

  • avatar
    mikey

    I see the photo in the link,is the Chrysler Windsor plant. TTAC used an Oshawa asembled Camaro. Ford,Honda and Toyota all have assembly plants in Ontario.

    Interesting, I’d like to know. Were all Canadian plants taken into consideration when calculating these numbers?

    “28-Cars-Later” has a valid point. To us Mexico, and the USA are indeed foreign countries.

    I do know that in the Oshawa area,parts suppliers were dropping like flies a few years ago.

    A couple of days ago one of the B&B refered to “the curse of natural resources” Yeah,with manufactoring vanishing as it is, we had better hope that the oil buisness hires everybody.

    BTW. Just a question for our American friends. Does Al Gore have an elected position anymore? He was recently beating us up about our so called “dirty oil”. If he holds an elected office, I guess he has a right to point out our flaws.

    If Mr Gore is a private citizen,perhaps he, and Daryl Hannah, and George Cloony,could just shut the f–up,and worry about thier own country. We have enough of our very own,car hating,oil hating loony lefties….End of rant.

    • 0 avatar
      28-Cars-Later

      I invite the opinion of others, but in my view Mikey, Al Gore is essentially an elitist oligarch at least at this point.

    • 0 avatar
      rpol35

      Yeah, he was elected to be the most obnoxious, overstuffed, medling, hypocritical, world-wide whiner of all time so he’s your problem too.

    • 0 avatar
      wmba

      Forget about Al Gore, everyone else does, Mikey.

      The real problem is that the EU is going to brand tarsands oil as dirty. So King Stephen sent Joe Oliver to Europe this week.

      “Natural Resources Minister Joe Oliver is in Europe this week to fight proposed legislation he says discriminates against the oil sands and could damage the reputation of Canadian energy products around the world.”

      If Oliver could organize his thoughts clearly and logically, this might be a good trip. Unfortunately, he couldn’t give away free ice cream to kids. Fodder for the Euros. If he gets strident, as he did last week with Gore, he’ll be eaten alive and caricatured as a buffoon.

      I’m with you, though. Uninterested in listening to lectures from foreigners about our country, particularly from Europeans who have been so spectacularly financially successful themselves, and then act like our intellectual overlords. Screw that.

      • 0 avatar
        28-Cars-Later

        Something to be concerned about since the unelected EU technocrats could make trouble with their edicts, but I’d be more concerned about the US EPA working in concert with them to truly screw us all. Assuming this does not happen, I wouldn’t be concerned if Europe won’t buy your oil, the US and the East certainly will.

    • 0 avatar

      “If Mr Gore is a private citizen,perhaps he, and Daryl Hannah, and George Cloony,could just shut the f–up,and worry about thier own country. We have enough of our very own,car hating,oil hating loony lefties….End of rant.”

      Rant away. I’m not really crazy about the stuff they are telling me is bad to do in my own country, now they are souring our relations with our northern neighbors, hey thanks buddy. Um have you ever met a Canadian? They are one of the most socially conscious societies on the planet. They just don’t feel the need to smug about it.

      I feel a lot of this stink about oil sands is genuine concern about Canada becoming an economic super power while having no global, religious or idealistic agenda to force upon the rest of the world. We haven’t had that happen, well…ever.

      Besdides, the sooner I get Timmy’s in the southern US, the better.

  • avatar
    CrapBox

    I, Pencil.

  • avatar
    ect

    Given the integrated nature of the Canada-US auto market, and that fact that Canada’s population and economy is basically 10% of that of the US, it’s inevitable that cars assembled in Canada will have a larger proportion of foreign (i.e., US-made) parts. So, what else is new?

    But there have been changes. Throughout the period from 1980-2003, Canada ran a large surplus in auto parts, because the lower value of the C$ and Canada’s public healthcare system gave Canadian suppliers a substantial cost advantage.

    When oil and other commodity prices went up, and the C$ rose from US$0.63 to US$1.00, that cost advantage became a cost disadvantage. Assembly plants, if they are largely automated, aren’t so hugely affected by this, but I suspect that a lot of parts manufacturing is more labour-intensive, and so would be substantially affected.

    I had some dealings about 5-6 years ago with a parts supplier near Toronto. His dilemma, as he saw it, was that he had to pay the world market price for his raw materials (steel being the biggest), and he had to sell to OEMs in US$. But his other costs were all in C$, and he couldn’t control the exchange rate – on which he would live or die.

  • avatar
    fuckGM

    So we bailed out GM to have foreign made cars, in foreign made plants, that are also consistently terrible across the board if reviews like this: http://oppositelock.jalopnik.com/chevy-test-drive-event-why-the-spark-is-better-than-th-501898626 are any indication? Thanks Obama!


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