The Cost Of Doing Business In Canada Is Too High For Honda
The high cost of auto manufacturing in Canada isn’t solely an issue for domestic auto makers; Honda, which manufactures the best-selling car in Canada (the Civic) is grappling with this issue as well.
The Windsor Star spoke to Jerry Chenkin, Executive Vice-President of Honda Canada, who summed up the biggest issue with Honda’s Canadian production:
“Our challenge quite simply is to be competitive,” Chenkin said during an interview at the North American International Auto Show. “We’re producing Civics. We have a factory in Indiana that’s producing exactly the same vehicle. Our challenge at Honda Canada is to be competitive with our sister plants in the U.S.”
The Alliston plant has pumped out everything from the Civic to the Acura MDX, Honda Pilot, CR-V, Odyssey and Ridgeline. But most of those products have departed for other Honda plants, namely the Alabama facility that builds their minivans and SUVs. Most recently, the next-generation MDX has been the latest vehicle to leave Alliston, though Chenkin said that the capacity will be used to build Civics and CR-Vs, which are strong sellers in both Canada and the U.S.
A big part of Honda Canada’s messaging has been the Canadian origins of the legions of Civics sold over the years. The compact Honda has enjoyed a nearly two-decade long stretch as Canada’s best-selling car, with a customer base that spans the gamut of ages, genders and socioeconomic groups. There’s no reason to doubt Chenkin’s assertions that Canadian production is secure; if the market keeps growing at the kind of pace we’ve recently seen, then Honda is going to be glad that they have the extra capacity (some 390,000 cars annually) on hand.
More by Derek Kreindler
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I was looking at the Honda dealer last weekend and saw several of the 2013 Civics on the lot (sidenote: what's up with the extra chrome?). I noticed that they were manufactured in Alliston, even though I'm in the U.S. and was pretty sure they built them somewhere in the U.S. as well. Is the Indiana plant not up to speed on 2013 production yet?
When I was gowing up in Canada in the 1960s, the Canadian dollar was worth a few cents more than the American dollar. Approximate parity between them is nothing new. However, the current situation is due to the American dollar's losing value rather than the Canadian dollar's gaining value.
I'm an American who lived and worked in Toronto for six years in the 1990s. I recall the C$ was worth about US$ 0.60-0.65 cents when we were there. Canada seemed to be an export giant then. I remember driving down the 401 past the Ford plant where thousands of vans were waiting for export to the US. I had US$ investments I used to buy a nice house and cars on the cheap. When I came back to San Jose we didn't have a pot to piss in due to exchange rates.
As an Indiana resident, all I can say is that we're Canada's Mexicans now, LOL.