2012 may be the most profitable year in the last decade for Canada’s auto manufacturers, thanks to the recovering U.S. economy and increasing demand on both sides of the border.
The Canadian motor vehicle manufacturing industry is expected to post its third consecutive annual year of profitability in 2012. At $1.35 billion in pre-tax profits, the industry will enjoy its best result since 2002.
“The industry will continue to benefit from brisk growth in vehicle sales, both this year and next. 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,” said Michael Burt, Industrial Economic Trends director at the Conference Board of Canada.
In the first eight months of 2012, Canadian automotive production rose almost 20 percent compared to the same period last year. Sales in Canada increased 7.1 percent between January and August and are on track to reach 1.72 million vehicles, the highest levels since 2002. Truck sales continue to outnumber passenger car purchases across Canada, particularly in the Prairies where brisk activity in the mining and construction industries is driving sales.