Canada offers business opportunities in the automotive sector, especially as the Canadian government aims to achieve carbon neutrality by 2050, noted the U.S. Department of Commerce.
While Canada is North America‘s second largest automotive market, imports account for approximately three-quarters of the new vehicle market.
Most of the world’s vehicle manufacturers have a presence in Canada, including five with local assembly lines: Ford, General Motors, Stellantis (formerly FCA), Toyota and Honda.
In addition to new vehicle sales, the Department of Commerce refers that the annual value of the automotive aftermarket was estimated by the industry at more than $19 billion and remained relatively stable in 2021.
To achieve carbon neutrality, the Canadian government has earmarked large investment resources in the 2021 and 2022 budget for infrastructure and the green economy.
Meanwhile, Canadian subsidiaries of US automakers announced major investments, such as General Motor (US$785 million), Ford (US$1.5 billion) and Stellantis (US$1.14 billion), to prepare their production lines for electric vehicles.
Business opportunities
In addition, in early 2022, GM Canada, Ford Motors Canada and Stellantis Canada announced the construction of their own facilities to manufacture batteries for electric vehicles.
Advanced technology clusters are also business opportunities. As an example, the Department of Commerce points to the autonomous vehicle cluster Kanata North Business Association. Already several municipalities are developing related programs.
Example of significant opportunities in the components and parts sub-segments showing Canadian imports in 2021:
- Gearboxes (transmissions) and parts: $1.6 billion.
- Drive axles with differential and parts: $803 million.
- Suspension systems and parts, including shock absorbers: $1.0 billion.
- Mufflers and exhaust pipes and parts: $340 million.
- Clutches and parts: $288 million.
