Strategic Review of the Canadian Automotive Industry
1. Strategic Review of the Canadian Automotive Industry Dennis DesRosiers - February 28, 2007
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5. Final Retail = $156 Billion in Revenue including Financing Automotive Finance Parts and Service Used Vehicles New Vehicles $38 B Loan $29 B $17 B $53 B Four Windows” to Automotive - 2007 $20 B Lease
6. Raw Material MTDM Parts Manufacturing Vehicle Assembly Vehicle Distribution Vehicle Retailing Vehicle Trade Ins Wholesale Trade / Auction Asset Acquisition Retailing Credit Adjudication Funding Admin Collection Asset Disposal Parts Manufacturing Warehouse Distribution Wholesaling Installation / DIY Parts Return / Disposal New Vehicles Used Vehicles Vehicle Finance Aftermarket Vehicle Retailing The Auto Sector by Function Manufacturing Focus in Red Distribution Focus in Blue Retail Focus in Yellow
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8. Raw Material MTDM Parts Manufacturing Vehicle Assembly Vehicle Distribution Vehicle Retailing Vehicle Trade Ins Wholesale Trade / Auction Asset Acquisition Retailing Credit Adjudication Funding Admin Collection Asset Disposal Parts Manufacturing Warehouse Distribution Wholesaling Installation / DIY Parts Return / Disposal New Vehicles Used Vehicles Vehicle Finance Aftermarket Vehicle Retailing Global Focus in Red North American Focus in Blue Canadian Focus in Yellow The Auto Sector by Geography
13. Source: DesRosiers Automotive Consultants Inc., AIAMC and CVMA Canadian Light Vehicle Market 2000 - 2007 The Canadian market is moving away from Mid-Sized Family Vehicles and instead is becoming primarily a market for small entry level vehicles …. Large/luxury is growing driven by demographic issues … the commercial use market is very stable and will remain so.
14. Retail Units (Thousands) Fleet Units (Thousands) Fleet Consumer Fleet vs. Retail 1990 – 2007 Calendar Year Canadian Light Vehicle Sales 1990 – 2007
15. Consumers are moving away from Mid-Sized Family Vehicles as well as light truck for personal use Vehicle Consumers Purchase
16. Fleets also moving away from the mid size/family market with a distinct move up-scale. Vehicle Fleets Purchase
17. Entry Level Market Share vs. Gas Prices - Jan. 2004 – Jan. 2008 Source: MJ Ervin & Associates, DesRosiers Automotive Consultants Inc. Gas Prices (cents) Entry Level Market Share
29. North American Production of Vehicles # of Units 4 million units fewer Detroit based vehicles produced has resulted in huge downsizing at any entity touching these companies … suppliers, tool and die, dealers, raw material etc … and the OEMs themselves
30. North American Production of Vehicles # of Units There does not appear much downsizing left out of Detroit .. The upside for Canada is to get another one or two assembly plants from the new domestics
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32. N.A. Original Equipment and Aftermarket Parts Market There are very few components coming into North America from overseas, most of the activity is overseas suppliers building plants in North America
33. Canada has traditionally been very successful within the North American automotive assembly sector. We are actually operating from a relatively strong position. Although there are serious issues emerging that threaten our current success.
60. Need to set the Rules of Engagement for Government Policy What is the role of Government Policy? Can the Gov’t play in this sector, if so how, how aggressively, where etc.
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64. Governments at all levels in Canada need to use policy tools available to them to help the Canadian automotive sector embrace higher skills and to move up the intellectual curve. The other options are not palatable to most in the sector
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66. Questions? Dennis DesRosiers DesRosiers Automotive Consultants Inc. 80 Fulton Way, Suite 101 Richmond Hill, Ontario t: 905.881.0400 f: 905.881.7456 e: dennis@desrosiers.ca www.desrosiers.ca
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