Automotive News Canada - January 2018 - 17

* J A N U A R Y 2 018

TWO CONTRASTING
threads wove through
Automotive News Canada's 2017
coverage: prosperity and uncertainty.
Canadian auto sales were
headed to exceed two million
vehicles for the first time, topping 2016's record year. But
issues such as fragile NAFTA
talks and policies aimed at
expanding electric-vehicle and
hybrid sales made industry
watchers nervous.

2017
A YEAR
OF GROWTH
AND RED
FLAGS
By STEVE MERTL

VA N C O U V E R C O R R E S P O N D E N T

JANUARY:

The year began with the
news of a record 1.95 million new-vehicle sales in 2016, up 2.6 per cent from
2015. The outlook for 2017 was for a
flattening of the pace, which was overly pessimistic as it turned out.
But concerns
were being raised
about new-vehicle sales reporting regulations
in the works, and
the January issue
brought a warning for Canada
in the dramatic collapse of
Australia's automaking sector
after government support was withdrawn.
Canada also signaled that it was
ready to leap into the future. Onetime
smartphone giant Blackberry entered
the autonomous-vehicle race, developing core software via its Ottawa-based
QNX arm, a major player in automotive infotainment and telematics.

FEBRUARY: Most investors hate uncer-

tainty, and U.S. President Donald
Trump's new administration's tough
position on the automotive provisions
of the North American Free Trade
Agreement (NAFTA) was beginning to
be felt. Canadian parts producers were
holding off plans to create new production in Mexico, fearing U.S. tariffs if
NAFTA was cancelled.
American negotiations would

demand as much
as half the content of NAFTAeligible vehicles
be sourced in the
United States,
potentially disrupting the existing supply chain.
Canadian parts
producers have
115 facilities in
Mexico.

country, as happened after Hurricane
Katrina in 2005.
Unifor
President Jerry
Dias targeted
cheap Mexico
labour in the auto
sector ahead of
the next round
of NAFTA talks.
September coverage included a
two-page spread
outlining what
was on the table, who the players were
and their strategies.

MARCH:

The first Automotive News
Canada Congress in Toronto in
February brought together industry,
union and government leaders. The
message, as reported, was that
Canadian companies had the
wherewithal for leadership in
the evolving technology
of mobility, but
it would
require
nimbleness
in government policy-making and sectoral investment to succeed.
Elsewhere, the automotive industry in Ontario took aim at provincial power rates that they say makes
them less competitive with the United
States.

APRIL:

An exclusive interview with
Navdeep Bains, federal minister of
economic development, underscored the message from the
Toronto Congress
in March that
investing in innovation is key to
the auto industry's future in
Canada. Bains
said Ottawa was
prepared to partner with companies that promote technology research and development and
create jobs.
Meanwhile, Quebec announced
it was expanding its electric-vehicle
incentive program to cover used models, but only imported from outside the
province to prevent double-dipping.

MAY: The federal government wasn't

putting the brakes on the use of asbestos auto parts until 2018, but anticipation of the ban began biting into
imported products containing the carcinogen in 2016.
Automotive News
Canada began
a series covering the effects of
asbestos in the
January edition.
A class-action lawsuit
covering more
than 100,000
Volkswagen diesel owners and lessees was settled in April and reaction
was predictably mixed. Some were satisfied with the compensation offered
while others remained confused about
the individual evaluation process.
Meanwhile, buyers unfazed by the
scandal snapped up leftover 2015 VW
diesels with updated emissions software.

JUNE: A story about EV rebates con-

firmed the obvious: interest in EVs
and even hybrids was practically nil

OCTOBER: The issue reported on the

outside British Columbia, Ontario and
Quebec, the only provinces with government incentives. Not helping was
the fact that some offerings were made
available only in those provinces. For
example, the Toyota Prius Prime is
only available in Quebec.
Automakers found ways to celebrate Canada's 150th birthday with a
variety of promotions and contests,
some that put participants in line
to win new vehicles. Most automakers used their events to showcase the
country, not themselves, however.

JULY: The front page looked at the

future of car dealerships through the
experienced eyes of billionaire British
Columbia dealer Jim Pattison. The
consensus: The way people buy and
use vehicles is
changing but
there'll be a role
for dealerships,
perhaps with a
smaller physical footprint and
more emphasis
on service.
The slow-moving Takata airbag recall disaster continued to
affect more than five million Canadian
vehicles. Transport Canada reported
less than a fifth had their faulty airbags replaced as of late June due to
parts shortages worldwide.
Mid-year auto sales numbers
showed purchases maintained record
levels despite early predictions of a
slowdown. More than one million vehicles were sold in the first six months,
up almost five per cent from the first
half of 2016.

AUGUST:

The first round of NAFTA
talks began in Washington with no
sign that industry lobbying had softened U.S. insistence on raising the
American content
on vehicles produced within the
zone to qualify for
tariff-free importation.
Canadians'
increasing preference for utility vehicles, and
their greater
profitability, put
traditional family sedans under increasing threat.
Automakers such as FCA were culling
weak-performing passenger models,
which required more incentive money
to move.

SEPTEMBER: As hurricanes lashed

the southern United States, Canadians
were warned to watch for flood-damaged vehicles that could slip into the

federal government's zero-emission-vehicle-policy review, which was supposed to produce a plan by
2018 aimed at
increasing EV
sales, especially in provinces
without incentive programs.
Are Quebec-style
sales quotas on
the table for the
rest of the country?
Unifor's strike at GM's CAMI plant
was settled after nearly a month, but
not before the automaker threatened
to shift production of the hot-selling
Equinox utility vehicle to Mexico.

NOVEMBER:

A front-page story reported the Ontario government was
months behind in paying EV rebates
to dealers who
had fronted the
incentive money
to customers.
The total ran into
millions, with
one dealer claiming he was owed
$780,000.
Ongoing
NAFTA coverage
looked at what
analysts said
might happen if talks to renew the deal
failed. There would be a six-month
window to salvage the agreement or
create bilateral deals, but supply-chain
disruption seemed inevitable.

DECEMBER:

As new-vehicle sales
closed in on the two-million mark for
2017, a front-page story took a careful
look at the numbers below the surface,
casting concern over the long-term
health of the industry. Higher incentives, dependency on trucks, the crumbling sedan market and long-term
financing issues were all red-flagged.
Looking ahead to 2018, eyes will
focus on the outcome of the dragging
NAFTA talks while also looking at
Canada's role in a future where automakers continue evolving from car
builders to mobility suppliers. - ANC

Table of Contents for the Digital Edition of Automotive News Canada - January 2018