FP News Top Story

The Canadian Press - ONLINE EDITION

Canada's vehicle makers headed for most profitable year since 2001: report

By: The Canadian Press

Posted: 11/22/2012 8:27 AM | Comments: 0 | Last Modified: 11/22/2012 9:01 AM

A worker on the production line at Chrysler's plant in Windsor, works on an engine on January 18, 2011. (THE CANADIAN PRESS/GEOFF ROBINS)

OTTAWA - Canada's vehicle manufacturers are poised to have their most profitable year in a decade in 2012, according to the Conference Board of Canada.

The Ottawa-based economic forecaster estimates the industry will have $1.35 billion in pre-tax profits this year, its best year since 2002.

"The industry will continue to benefit from brisk growth in vehicle sales, both this year and next," said Michael Burt, director, industrial economic trends.

Burt noted that while Canadian sales are set to surpass their pre-recession level this year, sales in the United States are not expected to return to 2007 volumes until 2014.

"This increasing U.S. demand is expected to lead to a prolonged recovery in Canadian auto exports," he said.

Through the first eight months of 2012, Canadian automotive production rose almost 20 per cent compared with the same period last year, according to the Conference Board report.

Sales in Canada surged 7.1 per cent between January and August of this year and are on track to reach 1.72 million vehicles — the most since 2002.

Across Canada, truck sales continued to outnumber passenger car purchases, particularly in the Prairies where brisk activity in the mining and construction industries is driving sales.

Sales to the U.S. have posted double-digit sales growth three years in a row, culminating in a 15 per cent increase in Canadian exports this year.

Yet, U.S. sales remain 1.7 million units below where they stood in 2007, leaving room for further growth assuming that Congress and the White House take measures to avoid the looming "fiscal cliff" — the combination of big U.S. government spending cuts and the end of Bush-era tax breaks set to kick in automatically at the start of 2013.

Going forward, production growth will slow over the next five years from this year's "torrid pace," with Canadian sales gains limited because demand that built up during the recession "has effectively dried out," the report said.

The Conference Board also noted that General Motors will close one of its Oshawa plants in 2014 and growth in sales will also start to level off in the United States.

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More FP News Top Story

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.