While Windsor, Ontario was once billed as the British Empire’s auto capital, today its’ unlikely the plunging Canadian currency would benefit in the immediate future the car manufacturing sector.
There are new investments currently being made there, such as FCA US’s decision to build the next generation of the Chrysler minivan, but overall they can’t overcome the other “ruins” – plants that have been abandoned ore demolished. While Japan Inc – headed by the world’s largest automaker, Toyota Motor Corp., has benefited strongly from the weaker yen when exporting overseas the car produced at home; the same cannot be said about Windsor, which has so far failed to replace lost production. While the auto manufacturing hub suffered from the latest great recession, unlike the Southern neighbor it has so far failed to gain pace with its recovery – even as customer demand for automobiles has grown beyond the wildest forecasts. “This whole notion that a weaker currency is going to be good for exports is going to take a lot longer than people think,” comments David Woo, head of global rates and currencies research at Bank of America Merrill Lynch in New York.
According to figures sourced from the Center for Automotive Research, since 2009 Canada has managed to attract just $4 billion in investments related to the automotive industry – in stark contrast to the US, which has won $50 billion, or Mexico, which has been given $20 billion. Fortunately, last month marked an improvement: General Motors said it would pour C$560 million in its Ingersoll, Ontario assembly facility to manufacture the company’s new Chevrolet Equinox. Fiat Chrysler Automobile NV’s manufacturing facility in Windsor is now undergoing a C$2 billion retooling to build the new minivan.