Automotive News Canada - July 2023 - 30

30
* JULY 2023
By KELLY TAYLOR
WINNIPEG CORRESPONDENT
JANUARY
PROJECT ARROW IS ON
target. The collaborative electric
-vehicle prototype made its global
debut at CES in Las Vegas. It's
the culmination of three years
of work involving
nearly 60
NEWS
ANALYSIS
Canadian suppliers,
spearheaded
by the
Automotive Parts Manufacturers'
Association. The estimated
$20-million project was created
to showcase the depth of supplier
innovation and talent in Canada.
■ ■ ■
SIX MONTHS
IN
MONTHS
THE HALF YEAR
IN REVIEW
Taxpayer
APRIL
The auto industry is railing
against the proposed federal government's
mandate requiring 20
per cent of new-vehicle sales in
2026 to be zero emissions, with
increasing percentages until 2035
when 100 per cent is reached.
■ ■ ■
New-car sales appear set for a
downturn. Although inventories
are rising, higher average transaction
prices for new and used
vehicles signal a looming affordability
crunch. A cooling economy
- largely related to higher
interest rates - has analysts
predicting increased incentive
spending to keep sales rolling.
■ ■ ■
Automotive News Canada's
first retail salary survey finds
that working at a dealership can
be incredibly lucrative: The average
pay is $131,200, with managers
averaging $161,900. Analysis
also revealed that during the
course of the COVID-19 pandemic,
increases in compensation far
outpaced high inflation.
FEBRUARY
THE U.S. INFLATION
Reduction Act (IRA) - which
provides billions of dollars to
fund EV production - is beginning
to gnaw at Canada's automotive
manufacturing sector,
and the industry is concerned the
federal government is powerless
to stop it. The IRA has already
lured at least one battery plant to
Michigan, and industry experts
are calling on the Canadian government
to be more competitive.
■ ■ ■
Honda Canada CEO Jean
Marc Leclerc is warning that the
new federal zero-emission-vehicle
sales mandate will collide
with an immovable object: the
reluctance of Canadian consumers.
Caught in the middle, he
said, is Canada's auto industry.
Mass adoption of EVs " will not
be possible " without quick work
on overcoming psychological
barriers such as range anxiety
and fear of insufficient charging
ability, he said. ■ ■ ■
Electricity
is in the air as the Canadian
International AutoShow in
Toronto returns. The last show
took place in February 2020,
just before the COVID-19 pandemic
arrived. The Montreal
International Auto Show
returned in January. Both events
focused on EVs and Ford was conspicuously
absent. Most regional
shows, such as in Ottawa,
Edmonton and Vancouver,
remained cancelled for 2023.
MARCH
VOLKSWAGEN AND ITS
battery subsidiary Power Co.
pick St. Thomas, Ont., as the site
of a massive battery manufacturing
facility, ending months
of speculation. Financial details
weren't disclosed, but FrançoisPhilippe
Champagne, Canada's
minister of innovation, science
and industry, told reporters the
plant would be " the largest single
investment " in Canadian
automotive history. Volkswagen
said the plant is scheduled to
begin producing battery cells in
2027, but few other specifics were
shared. A full accounting of the
investment, as well as the government
backing, were to be
announced at an event in St.
Thomas. ■ ■ ■
Magna
International commits to
investing $470 million to open
a battery-enclosures plant in
Brampton, Ont., and expand five
of its other auto parts plants in
southern Ontario. The spending
will create more than 1,000
jobs, the company said. ■ ■ ■
The
2023 Automotive News Canada
Congress - held in conjunction
with the Canadian International
AutoShow in February - disbillions
help
land the largest
investment deal
in Canadian auto
history, but the
complications and
the controversy
of government
intervention -
including ZEV sales
mandates - are
just beginning.
AUTOMAKERS ARE PUSHING
back at the notion that it's their
responsibility to increase vehicle
security to address the rising
auto theft plaguing Ontario.
The industry pointed fingers at
the Port of Montreal, a " porous "
gateway through which stolen
cars get on ships bound largely
for Africa. ■ ■ ■
Volkswagen's
planned battery plant in St.
Thomas, Ont., has industry
watchers salivating over the
possibility that sibling company
Audi might choose southern
Ontario for a new EV assembly
location. ■ ■ ■
A $400-million
class-action lawsuit, brought
by Toronto law firm Diamond
and Diamond, accuses Magna
International and three other
companies of hiring Mexican
workers, circumventing immigration
laws and paying less
than minimum wage. Magna
said in a statement that, " Their
claims are without merit, and we
will contest them vigorously. "
MAY
VOLKSWAGEN AND ITS
battery subsidiary PowerCo provided
more details in late April
for a new battery plant in St.
Thomas, Ont. Among them, covered
extensively in the May edition,
a $7 billion price tag, including
$700 million and $500 million
from the federal and Ontario
governments, respectively. To
secure the plant, Ottawa pledges
to match tax incentives available
in the United States, equal to an
estimated $8 billion to $13.2 billion.
■ ■ ■
Rising vehicle prices
and interest rates are driving
increases in 84-month loans for
used-vehicle purchases, said J.D.
Power's Canadian automotive
used-vehicle purchases, said J.D.
: 45 per cent in 2022 vs.
practice: 45 per cent in 2022 vs.
25 per cent in 2021. Buyers are
stretching their loans to keep
monthly payments affordable,
but at the expense of remaining
upside down - owing more
than the vehicles are worth -
for a longer period of time.
■ ■ ■
The Quebec government
mandate to boost adoption.
plans to toughen its ZEV sales
The current mandates are
already more aggressive
than the proposed federal
mandates and the new targets
widen that spread significantly.
For example,
the federal ZEV target
for 2027 is 23 per cent,
the current mandate in
Quebec is 34 per cent and
cussed the economic headwinds
facing the industry, the changing
dealership buy-sell landscape,
EV readiness and digital retailing.
It was the first in-person
Congress held since 2020.
the newly proposed mandate is
45 per cent. Industry stakeholders
warn that the changes could
hamper vehicle affordability and
keep older, more polluting cars
on the road longer.
JUNE
THE FEDERAL AND ONTARIO
governments face blowback
for the financial support of the
VW battery plant. In particular,
there's countrywide criticism
over the sheer amount of the
incentives, as high as $13.2 billion
that almost entirely benefits
Ontario. Questions also loom as
to whether Canada can afford to
lure such investment. Somewhat
related, Stellantis and LG Energy
Solution halt construction at
the module portion of their battery
plant in Windsor, Ont., saying
Ottawa is not matching the
incentives provided under the
U.S. Inflation Reduction Act,
which it had promised to do. In
a bizarre twist, the feds take to
social media to cryptically accuse
Ontario of not doing its fair
share. At the end of June, there
was still no resolution. ■ ■ ■
The
push to secure battery manufacturing
has prompted Canada's
mining industry to also look for
funding. Canadian mining companies
say support for projects
providing critical minerals for
the battery industry pales in comparison
to the VW and Stellantis
battery-plant deals. " I'd be greatly
disappointed if we provided
such strong grants to foreign entities
without providing it for fellow
Ontarians, " Frontier Lithium
President Trevor Walker said.
■ ■ ■
General Motors announces it
will spend $280 million to retool
the Oshawa Assembly Plant
northeast of Toronto to build the
next generation of internal combustion
engine full-size pickups.
GM did not release product
details and timing related to the
pickups. - ANC
Automotive News Canada - July 2023

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