Automotive News Canada - May 2018 - 17

* MAY 2018

Innovation Fund as an example. The
program is designed to allow up to
$500 million to be contributed toward
the construction of greenfield projects. According to the federal government's website, the fund has supplied funds for 10 projects in Canada
since 2008, the largest and most
recent of which was $102 million to
Ford Motor Co. in 2017 as it upgraded its Canadian plants.
Faria said that while the fund
does not hurt Canada's chances for
investments, government must commit more funds to attract automotive
developments, and leaders should
more effectively communicate an
automotive manufacturing strategy
to automakers and suppliers.
"Canada
doesn't have an
automotive policy and needs one,"
Faria said. "If
we have an automotive policy in
Canada, I'd like to
know what it is."
Toyota Canada
Stephen
Vice-President
Beatty:
Stephen Beatty,
Manufacturing speaking with
"creates
Automotive News
opportunity."
Canada at the
Toronto auto show
in February, echoed Faria's point.
"At the moment, we see a lot of
support for setting up new engineering programs, which is fine," he
said. "I have no issue with that. But
we just need to be mindful of the fact
that it's manufacturing that puts the
big investments down, that creates
a huge multiplier effect, that creates
wealth, and by creating wealth, creates opportunity."

LABOUR COSTS, ALL OVER THE MAP
Mexico, meanwhile, has a host
of advantages over Canada and the
midwestern United States when it
comes to attracting investment. For
instance, the country has free trade
agreements with 45 countries, making it an attractive place for investment for automakers who hope to
ship vehicles built in North America
to other continents.
And labour rates are much lower
than in Canada or the United States.
According to a 2017 report by the
Center for Automotive Research
in Ann Arbor, Mich., automakers
paid their workers in Mexico about
US$5.21 ($6.71) per hour on average.
Workers at Mexico parts plants were
paid less than half of that.
According to Statistics Canada,
Canadian vehicle assembly workers
made an average of $34.85 per hour
in 2016.

All-wheel-drive could give the 2019
Nissan Altima a boost against
changing trends that favour compactutility vehicles and trucks over cars.
PHOTO: NISSAN

Production at Volkswagen's Chattanooga, Tenn., plant, where incentives
totaled US $800 million ($1.03 billion). P H O T O : V O L K S W A G E N

Having an unenthusiastic
champion can be fatal. Local
champions need to have a
position within the corporate
organization that allows them
to be heard by key decision
makers.
From a 2017 automotive
study by Charlotte Yates
and Wayne Lewchuk
While labour accounts for only a
small fraction of a vehicle's overall
costs, Rubin said automakers have
been under pressure from shareholders to take advantage of Mexico's low
wages to boost profits.

10 YEARS SINCE A NEW PLANT OPENED
Faria said Canada needs government and industry to step up to create a vision for manufacturing in the
country if it hopes to remain a major
manufacturer.
He pointed to Toyota's Woodstock,
Ont., plant that builds the RAV4.
Opened in 2008, it is the last auto
assembly plant to be built in Canada.
Toyota spent $1.2 billion to build the
plant, in addition to $125 million in
government incentives.
"A lot of the reason for Woodstock
was the really, really hard work of

Ray Tanguay while he was at Toyota
Canada and was arguing and arguing for more manufacturing in
Canada," Faria said, adding that he
does not see that type of leadership
in the industry today.
A 2017 study by Charlotte
Yates, the principal investigator
at the Automotive Policy Research
Centre at McMaster University in
Hamilton, and Wayne Lewchuk,
a labour and economics professor
there, came to a similar conclusion.
"Having an unenthusiastic champion can be fatal," the study reads.
"Local champions need to have a
position within the corporate organization that allows them to be heard
by key decision makers."
Likewise, the study's authors say
government should do more to promote advantages Canada has over
other jurisdictions, including "the
high quality of Canadian labour, the
stability of Canadian society, and
the attractiveness of the current
Canadian tax regime."
"In addition to offering monetary
incentives, governments can shape
perceptions of a location's attractiveness," the study reads.
In the meantime, though, Faria
said Canada's next-best shot at
attracting a new plant might be
when a Chinese or Indian auto manufacturer looks to build an assembly
plant in North America.
"As of now, I don't really see that
they would pick Canada either as
a site for an assembly facility," he
said. "It's far more reasonable to
pick a site in either the southern U.S.
or in Mexico." - ANC

AWD without
paying for a
utility vehicle
to get it
By JOHN IRWIN
TORONTO BUREAU

NISSAN WILL OFFER ALL-WHEEL
drive on all trims of the redesigned 2019
Altima when it goes on sale later this
year, a feature the company hopes will
win over consumers who stretch their
budgets to get it.
Michael Bunce, Nissan North
America vice-president for product planning, told Automotive News Canada that
the company saw an opening in the midsize sedan space to add all-wheel-drive,
which is a rarity in the segment. He said
buyers who prioritize the feature are
usually forced into a utility vehicle, costing them thousands of dollars more in
the process.
"A consumer that walks in today
and wants all-wheel-drive typically
has to move four or five thousand dollars up in transaction price," Bunce
said. "The goal of myself and the team
was really about how can we make allwheel-drive affordable and give the
consumer one less reason to stretch, if
you will, beyond their budget to get the
all-wheel drive."
The powertrain will be optional on
all trim levels with a 2.5-litre four-cylinder engine, states a Nissan Canada press
release. An optional four-cylinder, variable-compression turbo engine will also
be available.
All-wheel-drive is currently offered
in Canada on just two midsize sedans:
the Subaru Legacy and the Ford Fusion
Sport.
"We were really examining closely why people were starting to shift to
SUVs. For some it's about fuel prices, longer financing, low interest rates.
And then there were also the pragmatic
needs of the customer. We spent a lot of
research to look at those needs," Bunce
said. "But all-wheel-drive was coming
up over and over again."

NORTHERN ATTRACTION

Toyota's plant in Woodstock, Ont., is the most recent auto assembly plant
to be built in Canada. It opened in 2008, supported by $125 million
in government incentives. P H O T O : T O Y O TA

AWD is also designed in part to
appeal to consumers in colder climates
where winter weather drives demand.
The Altima redesign comes amid plummeting midsize-sedan sales. Altima
sales in Canada were down 17 per cent
through April of 2018, compared with
a year earlier, following a 15 per cent
year-over-year
drop in 2017.
- ANC

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