The Canadian Automotive Sector
Overview and Competitive Advantages
Jerry Suyavong
President, M.E. International Inc.
Vice President, Linear Transfer Automation Inc.
ProExport Colombia Seminar July 23, 2013
1
TABLE OF CONTENTS
1. Canada Automotive Industry Overview
2. Competitive Advantage
3. Automotive R&D Centre
4. Next Generation Vehicles
5. Outlook, Challenges and Opportunities
© 2013 Jerry Suyavong – Confidential
Disclosure or duplication without consent is prohibited.
2
Snapshot of Canada’s Auto Sector
© 2013 Jerry Suyavong – Confidential
●
Manufacturing – Canada produces passenger and
commercial vehicles, auto parts and systems, truck bodies
and trailers, as well as machines-tools-dies-moulds (MTDM)
and tires
●
Automotive is the largest manufacturing sector in Canada.
In 2012 it accounted for:
•
10% of manufacturing GDP
•
$80.4 billion in revenues
•
115,025 in direct employment
•
21% of merchandise trade
•
16% of NAFTA vehicle production (2.45 million units)
●
Highly concentrated in Ontario; also in Quebec, Manitoba
and B.C.
●
Very export intensive (three-quarters of annual output)
Disclosure or duplication without consent is prohibited.
3
Snapshot of Canada’s Auto Sector
•
•
Assembly: 19 passenger and commercial vehicle plants, 37,155 employed
• 87% exported,16.5% of North American vehicle production over the last 5 years
• 2.45M vehicles produced in 2012
Auto parts: ~10% of North American parts shipments
• ~350 automotive parts plants, including leading Canadian parts supplier and
large Multinationals
•
•
•
~300 Tool, Die and Mould makers
1,240 facilities, 64,305 employed, $27.5 billion revenues, 46% exported
Key Inputs & Services: Reliable access to raw materials, such as, steel, metals,
plastics, alternative materials, as well as business services and automotive sales
and service
© 2013 Jerry Suyavong – Confidential
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4
Vehicle Assembly Locations
© 2013 Jerry Suyavong – Confidential
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5
Assembly Plants in Canada
Light Vehicles
Parent
Chrysler
[FIAT]
Ford
GM
Honda
Toyota
Plant / Location
Products
Brampton Assembly Plant (Brampton ON)
Chrysler 300/300C; Dodge Charger and Challenger;
Lancia Thema
Windsor Assembly Plant (Windsor ON)
Chrysler Town & Country; Dodge Grand Caravan; Lancia
Voyager; Ram Cargo Van
Oakville Assembly Complex (Oakville ON)
Ford Edge and Flex; Lincoln MKX and MKT
CAMI Automotive (Ingersoll ON)
Chevrolet Equinox (2010MY) and GMC Terrain (2010MY)
Oshawa Car Plants 1-2 (Oshawa ON)
Buick Regal and Regal eAssist; Cadillac XTS; Chevrolet
Camaro, Equinox and Impala
HCM Plants 1-2 (Alliston ON)
Acura MDX and ZDX; Honda Civic and CR-V
North and South Plants (Cambridge ON)
Toyota Corolla and Matrix; Lexus RX 350
West Plant (Woodstock ON)
Toyota RAV4 and RAV4 EV
Heavy Trucks
and Buses
Parent
Plant / Location
Products
Blue Bird
Micro Bird (Drummondville PQ)
Type A school buses
Hino [Toyota]
Hino Motors Canada (Woodstock ON)
Class 4-7 trucks (CKD)
Lion Bus
Lion Bus Inc. (St. Jerome PQ)
Type C school buses
MCI
MCI International (Winnipeg MB)
intercity buses
New Flyer
New Flyer Industries Canada (Winnipeg MB)
urban transit buses
PACCAR
PACCAR of Canada (Ste. Therese PQ)
Class 6-7 trucks
Nova Bus Corporation (St. Eustache PQ)
urban transit buses
Prévost Car (Ste. Claire PQ)
intercity buses
Volvo Bus
© 2013 Jerry Suyavong – Confidential
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6
Exceptional Quality and Productivity
●
●
●
●
●
The J.D. Power & Associates Initial Quality
Awards are the auto industry’s benchmark
for new vehicle quality manufacturing
Canadian assembly plants have won onethird of all J.D. Power plant quality awards
for North America, which is double Canada’s
share of regional production
Twenty-one J.D. Power & Associates Initial
Quality Awards have been presented to
Ontario plants since 1990
The only Toyota plant outside Japan to
produce Lexus vehicles is in Canada
Also home to the production of luxury
vehicles by Acura, Cadillac and Lincoln.
© 2013 Jerry Suyavong – Confidential
J.D. Power Plant Quality Awards
1990
Toyota Cambridge (Gold)
1991
Toyota Cambridge (Gold)
1992
Toyota Cambridge (Silver)
1993
Toyota Cambridge (Bronze)
1994
Ford St. Thomas (Silver)
1995
Toyota Cambridge (Gold)
1996
Toyota Cambridge (Gold), Honda Alliston (Silver)
1998
Ford St. Thomas (Gold)
1999
GM Oshawa 1 (Bronze)
2000
Toyota Cambridge (Bronze)
2001
Toyota Cambridge (Gold)
2002
GM Oshawa 2 (Gold)
2003
GM Oshawa 1 (Gold)
2005
GM Oshawa 2 (Gold), GM Oshawa 1 (Silver)
2006
GM Oshawa 2 (Gold), Chrysler Windsor (Silver)
2007
GM Oshawa 2 (Silver)
2009
GM Oshawa 1 (Silver)
2010
Toyota Cambridge (Gold)
2011
Toyota Cambridge (Platinum)
2012
Toyota Cambridge (Gold) + Woodstock (Bronze)
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7
Canadian Vehicle Production
Country
2007
NORTH AMERICA
2008
2009
2010
2011
2012
15,102,752
12,616,916
8,626,384
11,954,843
13,153,240
15,449,563
Canada
2,542,150
2,045,539
1,479,162
2,062,653
2,145,241
2,453,969
Mexico
2,006,871
2,060,921
1,526,257
2,257,617
2,551,771
2,874,460
10,553,731
8,510,456
5,620,966
7,634,573
8,476,228
10,121,034
United States
OEM
2007
2008
2009
2010
2011
2012
GM
964,239
589,323
347,363
529,568
661,884
683,058
Chrysler
534,774
479,046
314,504
475,382
496,081
585,923
Toyota
302,749
287,395
319,547
458,729
412,829
519,215
Honda
390,580
383,011
259,796
278,366
254,051
409,849
Ford
349,808
306,764
237,952
320,608
320,396
255,924
Total
2,542,150
2,045,539
1,479,162
2,062,653
2,145,241
2,453,969
© 2013 Jerry Suyavong – Confidential
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8
Ontario has been NAFTA’s Leading Sub-National
Jurisdiction for Vehicle Assembly since 2004
Vehicle Production by Top 6 Sub-National NAFTA Jurisdiction (units)
3,500,000
3,000,000
Ontario
2,500,000
Michigan
2,000,000
Ohio
1,500,000
Indiana
1,000,000
Kentucky
500,000
Alabama
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Source: Wards Automotive
© 2013 Jerry Suyavong – Confidential
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9
Part of a Huge North American Market
●
●
Canada is part of a fully integrated North
American market with annual sales of 20
million units, normally
Motor Vehicle Sales in North America
(in millions of units)
25
Mexico
Although the U.S. market collapsed in
2008-09, sales have started to recover and
should return to peak levels by 2013
U.S.
20
Canada
15
●
●
Lost production is being restored, and North
America should remain one of the world’s
largest and most lucrative automotive
markets
The N.A. Free Trade Agreement (NAFTA)
ensures duty-free trade for originating
goods throughout the region
© 2013 Jerry Suyavong – Confidential
10
Forecast
5
0
2007
2008
2009
2010
2011f
2012f
2013f
2014f
2015f
2016f
2017f
Source: Industry Canada, from IHS | CSM Worldwide
Note: Figures include passenger and commercial vehicles
Disclosure or duplication without consent is prohibited.
10
Top 15 Countries
Light Vehicle Production & Global Ranking
Country
China
United States
Japan
Germany
South Korea
India
Brazil
Mexico
Canada
Thailand
Russia
Spain
France
United Kingdom
Czech Republic
Top 15 Total
Major Market Total
Top 15 %
BRIC
BRIC %
2012
18,298,986
10,121,034
9,544,740
5,586,276
4,480,015
3,851,575
3,172,783
2,886,788
2,454,069
2,312,489
2,078,368
1,939,352
1,926,863
1,563,734
1,113,559
71,330,631
78,556,570
90.8
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Country
China
United States
Japan
India
Germany
South Korea
Brazil
Mexico
Thailand
Russia
Spain
Canada
France
United Kingdom
Czech Republic
Top 15 Total
Major Market Total
Top 15 %
27,401,712
34.9
BRIC
BRIC %
2017
27,001,903
11,563,208
8,774,997
6,000,000
5,429,028
4,475,000
4,376,875
3,651,916
3,000,000
2,569,699
2,261,628
2,084,876
2,007,828
1,548,521
1,323,577
86,069,056
94,730,000
90.9
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
39,948,477
42.2
Source – Wards/AMIP/AutomotiveCompass (Brazil, Russia, India, China)
© 2013 Jerry Suyavong – Confidential
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11
Top 15 Global Brands
Light Vehicle Production & Global Ranking
Brand Owner
Volkswagen
Toyota Motor
General Motors
Renault/Nissan
Hyundai Motor
Ford Motor
Fiat-Chrysler
Honda Motor
PSA/Peugeot-Citroen
BMW
Daimler
SAIC-GM-Wuling
Mazda Motor
Suzuki Motor
Maruti Suzuki
Top 15 Brands
Major Market Total
Top 15 %
2012
9,218,940
8,648,879
8,127,929
7,654,459
7,177,294
5,613,074
4,249,527
3,913,446
2,820,247
1,864,422
1,851,783
1,471,397
1,314,700
1,265,603
1,220,408
66,412,108
78,556,570
84.5
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Brand Owner
Volkswagen
Renault/Nissan
Toyota Motor
General Motors
Hyundai Motor
Ford Motor
Honda Motor
Fiat-Chrysler
PSA/Peugeot-Citroen
BMW
Daimler
Maruti Suzuki
SAIC-GM-Wuling
Mazda Motor
Suzuki Motor
Top 15 Brands
Major Market Total
Top 15 %
2017
10,497,562
9,481,705
9,238,350
8,914,736
7,709,046
7,039,180
5,090,754
4,968,593
3,296,780
2,115,224
2,111,693
1,698,155
1,641,764
1,625,226
1,605,369
77,034,137
94,730,000
81.3
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Source – Wards/AMIP/AutomotiveCompass
© 2013 Jerry Suyavong – Confidential
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12
COMPETITIVE
ADVANTAGE
© 2013 Jerry Suyavong – Confidential
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13
Part of an Integrated North American Market
● The N.A. Free Trade
Agreement integrates Canada
into a market with annual sales
of 20 million vehicles.
● No tariffs on OE parts imported
CANADA
Montreal
Seattle
into Canada (vs 2.5% tariff in
the U.S.)
Toronto
Detroit/Windsor
Chicago
800 km
U.S.A.
400 km
Atlanta
Los Angeles
● Canada and the U.S. are
actively expanding border
capacity.
Miami
MEXICO
Mexico City
© 2013 Jerry Suyavong – Confidential
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14
Canada is Strategically Located
●
There are 37 high-volume assembly
plants within a 500 km radius of the
Windsor-Detroit border. These plants
produced 7.2 million vehicles in 2012.
●
Canada is also close to all major
automotive R&D centres in Michigan
and Ohio.
© Automotive News
© 2013 Jerry Suyavong – Confidential
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15
139 Million Consumers within a Day’s Drive
Daily Two-way Goods Trade between Ontario-USA for 2011 Valued at C$716 million
Sources: Industry Canada, Statistics Canada and US Census Bureau
© 2013 Jerry Suyavong – Confidential
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16
Low Import Tariffs
Average Applied MFN Tariffs On $100 Million In Imports
$ millions
$4.3
$3.0
$2.8
$1.9
$1.7
$1.2
$0.0
Transport equipment
$0.0
Electrical machinery
$0.0
Non-electrical machinery
Source: Finance Canada. The Federal Budget, and World Trade Organization. Trade Profiles.
© 2013 Jerry Suyavong – Confidential
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17
Competitive Corporate Taxes on Manufacturing
Ontario (in 2012)
Ontario (in 2010)
25.0%
28.0%
31.5%
Ontario (2008)
Texas
32.9%
Alabama
34.4%
Michigan
34.8%
Georgia
35.8%
Kentucky
36.0%
Tennessee
36.1%
Illinois
36.2%
Great Lakes States
36.6%
Ohio
36.9%
Indiana
37.4%
2010 Combined Federal and State/Provincial
© 2013 Jerry Suyavong – Confidential
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18
Corporate Income Tax Rates on Manufacturing
2011
2012
Federal
16.5%
15.0%
Ontario
10.0%
10.0%
Combined
26.5%
25.0%
© 2013 Jerry Suyavong – Confidential
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19
Accelerated Capital Cost Allowance
•
•
•
Manufacturing and Processing Equipment (M&P):
Since 2007, the depreciation rate for eligible M&P equipment
has been temporarily increased to a 50% straight line rate
(Class 29 as defined by the Canada Revenue Agency) for
eligible machinery and equipment purchased after March 18,
2007 and before 2014.
Companies who locate in Ontario can take advantage of this
generous rate of write-off for capital expenditures in
manufacturing or processing machinery and equipment each
year up to the end of 2013.
ACCA claims can be deferred indefinitely to subsequent years.
© 2013 Jerry Suyavong – Confidential
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20
Accelerated Capital Cost Allowance
Asset Class
Eligible Allowance
Depreciation Rate
Depreciation Method
“Half-Year” Rule
43
Capital Cost Allowance
(CCA)
30%
Declining Balance
Yes
29
Accelerated Capital
Cost Allowance
(ACCA)
50%
Straight Line
Yes
ACCA Benefits
 Allows business to completely depreciate qualified capital cost over a three year period.
 Provides additional cash flow in the three years following the capital expenditure by
reducing the taxable income.
 Provides higher return on capital in the long term.
© 2013 Jerry Suyavong – Confidential
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21
Training Tax Credits in Ontario
 The Ontario government offers Training Tax Credits to
encourage employers to hire and train apprentices and
workers in specific skilled trades.
 Ministry of Training, Colleges and Universities:

Apprenticeship Training Tax Credit: Maximum $10,000 per apprentice over 48 months.
 Employer Signing Bonus: $2,000 signing bonus if a new apprentice is registered.

Employment Ontario: Wage incentives and other recruitment support.

Ontario Youth Apprenticeship: School to work transition program.
 Ministry of Finance:

Co-op Education Tax Credit: Refundable tax credit of up to $3,000 per placement.
© 2013 Jerry Suyavong – Confidential
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22
Tax Rates & Other Support for the Auto Industry
• Corporate
Tax Reform: The government’s comprehensive tax package is providing $4.8
billion in overall tax relief over three years, including CIT cuts that started July 1, 2010:
- The general Corporate Income Tax (CIT) rate was lowered from 14 per cent to 12 per cent
- The CIT rate for manufacturing and processing was lowered from 12 per cent to 10 per cent
• Infrastructure
Investment: Support for Detroit-Windsor gateway, including the Detroit River
International Crossing and the Windsor-Essex Parkway to ensure people and goods move
safely and efficiently through the US-Canada border
© 2013 Jerry Suyavong – Confidential
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23
For example, Ontario Attracts Investors from
Many Countries
Foreign direct investment projects in Ontario, by source country, 2011
Other
19%
Japan
4%
UK
4%
US
55%
France
5%
China
6%
Germany
7%
© 2013 Jerry Suyavong – Confidential
Source: FDI Intelligence, March 2012
Disclosure or duplication without consent is prohibited.
24
AND ... Ontario is Home to the Majority of
Foreign-Controlled Head Offices in Canada
Foreign Head Office Distribution in Canada, 2011
Rest of
Canada
40%
Ontario
60%
Source: Statistics Canada
© 2013 Jerry Suyavong – Confidential
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25
Canada has Suppliers in Every Product Category
AUTOMOTIVE INTERIORS
ABC Group
AGS Automotive Systems
Aisin Canada
ArcelorMittal Tubular
Bend All
Brose Canada
Canadian General-Tower Limited
Commercial Spring and Tool Co.
DBG
Enstel Manufacturing Inc.
Exco Technologies Limited
Falcon Tool & Die (1979) Ltd.
Freeway Washer Limited
H. Paulin & Co. Ltd.
Hayashi Canada Inc.
Hematite Manufacturing
Invotronics
JYCO Sealing Technology
Lear Canada
Magna International Inc.
Martinrea International Inc.
Marwood Metal Fabrication
Matcor Automotive Inc.
MetriCan Stamping Co. Inc.
Mitchell Plastics
Omron Dualtec Automotive Inc.
Papp Plastics
PlasmaTreat North America Inc.
Salflex Polymers Ltd.
Samuel Automotive
Schukra Of North America Ltd.
Sealed Air (Canada) Co./Cie.
Stahlschmidt Cable Systems
The NARMCO Group
The Woodbridge Group
Tiercon
TG Minto Corp.
Toyota Boshoku Canada
TS Tech
Van-Rob Inc.
Vari-Form
Velcro Canada Inc.
Windsor Mold Group
Woodstock Stampings Inc.
PRODUCTION HANDLING
ABB Inc.
Marwood Metal Fabrication
ODG Group
Panasonic Canada Inc.
Schaefer Systems Inc.
Schenker DB Logistics
Sealed Air (Canada) Co./Cie.
SEW Eurodrive
The NARMCO Group
Valiant Tool & Mold Inc.
COMFORT & CONVENIENCE
ABC Group
AGS Automotive Systems
ArcelorMittal Tubular
DBG
Exco Technologies Limited
Magna International Inc.
Matcor Automotive Inc.
QNX Software Systems
Van-Rob Inc.
Vari-Form
Windsor Mold Group
AUTOMOTIVE EXTERIORS
3M
ABC Group
AGS Automotive Systems
Amino North America Corp.
Essar Steel Algoma Inc.
ArcelorMittal
ArcelorMittal Tubular
Enstel Manufacturing Inc.
Canadian General-Tower Ltd.
Commercial Spring and Tool Co.
DBG
Delhi-Solac Inc.
Exco Technologies Limited
F&P Manufacturing Inc.
Falcon Tool & Die (1979) Ltd.
Flex N Gate
Freeway Washer Limited
H. Paulin & Co. Ltd.
Henkel Canada Corporation
KSR International Inc.
Lanex Manufacturing Inc.
Magna International Inc.
Martinrea International Inc.
Marwood Metal Fabrication
Matcor Automotive Inc.
Maxtech Manufacturing Inc.
MetriCan Stamping Co. Inc.
ODG Group
PlasmaTreat North America Inc.
PPG Canada
Quality Safety Systems Company
Salflex Polymers Ltd.
Samuel Automotive
Sealed Air (Canada) Co./Cie.
Sinteris
The Butcher Engineering Limited
The NARMCO Group
The Woodbridge Group
Tiercon
Trimont Manufacturing Inc.
Van-Rob Inc.
Vari-Form
Warren Industries
WEGU Manufacturing
Windsor Mold Group
Woodstock Stampings Inc.
HVAC
ABC Group
ArcelorMittal Tubular
Burlington Technologies Inc.
Commercial Spring and Tool Co.
DANA Corporation
H. Paulin & Co. Ltd.
Linamar Corporation
Magna International Inc.
Martinrea International Inc.
Nichirin Incorporated
Omron Dualtec Automotive Inc.
ELECTRICAL & ELECTRONICS
Commercial Spring and Tool Co.
D&V Electronics Ltd.
DBG
Denso Manufacturing Canada
Digital Dash
Intertec Systems
Invotronics
Kasai Canada Inc.
KSR International Inc.
Magna International Inc.
Omron Dualtec Automotive Inc.
QNX Software Systems
Schukra Of North America Ltd.
Spatial View
Tyco Electronics Canada Ltd.
Van-Rob Inc.
Windsor Mold Group
PRODUCTION CONTROL EQUIPMENT
AUTOMATION & DESIGN
ABC Group
ABB Inc.
Altair Engineering Canada, Ltd.
Applied Precision Inc.
ArcelorMittal Tubular
Armada Toolworks Ltd.
Bend All
Cannon Automotive Solutions
Centreline
Clover Tool Mfg. Ltd.
DBG
Engineered Solutions Corp. (ESC)
Exco Technologies Limited
Falcon Tool & Die (1979) Ltd.
FANUC Robotics Canada Ltd.
Giffels Associates Limited/IBI Group
Henkel Canada Corporation
Husky Injection Molding
Huzura Manufacturing Ltd.
Logikor
Magna International Inc.
Marwood Metal Fabrication
ODG Group
OES, Inc.
Omega Tool
Panasonic Canada Inc.
PlasmaTreat North America Inc.
PricewaterhouseCoopers LLP
QNX Software Systems
RWDI AIR Inc.
Sanyo Canadian Machine Works
Schenker DB Logistics
Siemens PLM Software (CA) Ltd.
Solarsoft Business Systems
Stahlschmidt Cable Systems
Tech Con Automation
The NARMCO Group
Tutelar Technologies
Valiant Tool & Mold Inc.
Van-Rob Inc.
Vari-Form
Windsor Mold Group
© 2013 Jerry Suyavong – Confidential
CHASSIS
ABC Group
AGS Automotive Systems
ArcelorMittal Tubular
Armada Toolworks Ltd.
Bend All
Enstel Manufacturing Inc.
Burlington Technologies Inc.
Canadian Autoparts Toyota Inc.
DANA Corporation
DBG
DYNA-MIG Manufacturing Inc.
Electromac Group
F&P Manufacturing Inc.
Falcon Tool & Die (1979) Ltd.
Flex N Gate
Global Technologies
H. Paulin & Co. Ltd.
Jefferson Elora Corporation
Kautex-Textron
Kumi Canada Corp.
Linamar Corporation
Magna International Inc.
Martinrea International Inc.
Matcor Automotive Inc.
MetriCan Stamping Co. Inc.
MMSC Canada
Musashi Auto Parts Canada Inc.
Nichirin Incorporated
ODG Group
Sanoh Canada Ltd.
Showa Canada Inc.
Sinteris
Toyotetsu Canada Inc.
The NARMCO Group
Van-Rob Inc.
Vari-Form
Wescast Industries Inc.
Windsor Machine & Stamping
Windsor Mold Group
Woodbine Tool & Die
Woodstock Stampings Inc.
AIR INTAKE / EXHAUST SYSTEMS
ABC Group
Enstel Manufacturing Inc.
Commercial Spring and Tool Co.
DBG
Falcon Tool & Die (1979) Ltd.
H. Paulin & Co. Ltd.
Huarong Purification Inc.
Linamar Corporation
Magna International Inc.
Martinrea International Inc.
Marwood Metal Fabrication
THE NARMCO GROUP
Van-Rob Inc.
Wescast Industries Inc.
Windsor Mold Group
Woodstock Stampings Inc.
COMMUNICATION
& INFORMATION
ABC Group
AGS Automotive Systems
ArcelorMittal Tubular
DBG
Exco Technologies Limited
Magna International Inc.
Matcor Automotive Inc.
Omron Dualtec Automotive Inc.
QNX Software Systems
Tutelar Technologies
Van-Rob Inc.
Vari-Form
Windsor Mold Group
BRAKING
CTS Systems
DANA Corporation
DYNA-MIG Manufacturing Inc.
F&P Manufacturing Inc.
KSR International Inc.
Linamar Corporation
Martinrea International Inc.
Maxtech Manufacturing Inc.
Nichirin Incorporated
Sinteris
POWERTRAIN
ABC Group
AGS Automotive Systems
ArcelorMittal Tubular
Bend All
Burlington Technologies Inc.
Commercial Spring and Tool Co.
D & V Electronics Ltd.
DANA Corporation
DBG
Electrovaya
Exco Technologies Limited
F&P Manufacturing Inc.
Freudenberg-NOK Inc.
H. Paulin & Co. Ltd.
Invotronics
Linamar Corporation
Magna International Inc.
Martinrea International Inc.
Musashi Auto Parts Canada Inc.
Nichirin Incorporated
NTN Bearing Mfg Canada
Sinteris
The NARMCO Group
UltraFit Manufacturing
Van-Rob Inc.
Vari-Form
Zenn Motor Company
Disclosure or duplication without consent is prohibited.
BODY SYSTEMS
ABC Group
AGS Automotive Systems
ArcelorMittal Tubular
Armada Toolworks Ltd.
Cannon Automotive Solutions
Commercial Spring and Tool Co.
DBG
Enstel Manufacturing Inc.
Exco Technologies Limited
F&P Manufacturing Inc.
Falcon Tool & Die (1979) Ltd.
Flex N Gate
Freeway Washer Limited
H. Paulin & Co. Ltd.
Hematite Manufacturing
Huzura Manufacturing Ltd.
KSR International Inc.
Lanex Manufacturing Inc.
Magna International Inc.
Martinrea International Inc.
Marwood Metal Fabrication
Matcor Automotive Inc.
Maxtech Manufacturing Inc.
MetriCan Stamping Co. Inc.
Multimatic
ODG Group
Omega Tool
Omron Dualtec Automotive Inc.
Samuel Automotive
Sinteris
The NARMCO Group
The Woodbridge Group
Tiercon
Van-Rob Inc.
Vari-Form
Warren Industries
WEGU Manufacturing
Windsor Mold Group
Woodstock Stampings Inc.
Yachiyo of Ontario Manufacturing
ENGINE COOLING
Bend All
Brose Canada
Denso Manufacturing
Magna International Inc.
Martinrea International Inc.
The NARMCO Group
Vari-Form
ENGINE MANAGEMENT
Invotronics
Magna International Inc.
Omron Dualtec Automotive Inc.
Zenn Motor Company
SAFETY
ABC Group
Intertec Systems
Magna International Inc.
Quality Safety Systems Co.
Tyco Electronics Canada Ltd.
MANUFACTURING MACHINERY,
TOOLS & EQUIPMENT
ABB Inc.
ArcelorMittal Tubular
Burlington Technologies Inc.
DBG
Electromac Group
Falcon Tool & Die (1979) Ltd.
Flex N Gate
Magna International Inc.
The NARMCO Group
ODG Group
Stahlschmidt Cable Systems
Valiant Tool & Mold Inc.
Van-Rob Inc.
Exco Technologies Limited
PlasmaTreat North America Inc.
J.P. Bowman Limited
ABC Group
Anchor Danly
Husky Injection Molding
Vari-Form
Windsor Mold Group
FANUC Robotics Canada Ltd.
Nachi Robotic Systems Inc.
Yaskawa Motoman Canada Ltd.
TRW
EDUCATION & RESEARCH
Advanced Design &
Manufacturing Institute (ADMI)
AUTO21 Inc.
CON*NECT
Conestoga College
Georgian College
Humber College
McMaster University-MAC Auto
Mohawk College
Ontario Centres of Excellence
Seneca College of Applied Arts &
Technology
University of Waterloo - WatCAR
University of Windsor
ECONOMIC DEVELOPMENT
Canada's Automotive Corridor
Canada's Technology Triangle Inc.
City of Brantford
City of Hamilton
Durham Region
Greater Toronto Marketing Alliance
London Economic Development Corp.
Municipality of Chatham-Kent
Niagara Economic Development Corp.
Regional Municipality of Halton
Sarnia-Lambton Economic Partnership
South Western Ontario Marketing Alliance
WindsorEssex Economic Development
TRAINING
ABB Inc.
Engineered Solutions Corp. (ESC)
Exco Technologies Limited
Henkel Canada Corporation
HumberCollege
Magna International Inc.
Ontario Centres of Excellence
The PIC Group
PlasmaTreat North America Inc.
RWDI AIR Inc.
26
Canada Supply Base is Second to None
Top OEM Suppliers
with Plants in Canada
Global Rank 2011
#2
#3
#4
#5
#6
#7
#10
#12
#13
#17
#20
#22
#35
#37
#54
#56
#76
#78
Denso (Japan)
Continental (Germany)
Magna International (Canada)
Aisin Seiki (Japan)
Faurecia (France)
Johnson Controls (U.S.)
Delphi (U.S.)
TRW (U.S.)
Lear (U.S.)
Toyota Boshoku (Japan)
Autoliv (Sweden)
Visteon (U.S.)
Toyoda Gosei (Japan)
Brose (Germany)
Nemak (Mexico)
Flex-n-Gate (U.S.)
Linamar (Canada)
Martinrea (Canada)
Source: Automotive News
© 2013 Jerry Suyavong – Confidential
●
Many of the largest global suppliers have
facilities in Canada, along with steel and other
material producers
●
Some of the biggest and most capable
suppliers are Canadian-based including ABC
Group, AGS Automotive, Linamar, Magna,
Martinrea, Multimatic, Valiant, Wescast and
Woodbridge Foam
●
Other Canadian companies – such as Ballard,
QNX Software and Westport Innovations –
are recognized global leaders in their field
●
Assemblers and Tier 1s in Canada also have
access to supply chains in the U.S. and
Mexico
Disclosure or duplication without consent is prohibited.
27
For Example, Ontario is a Significant Player in
the NAFTA Auto Parts Industry
Share of NAFTA Parts Shipments, 2009
19.4%
Michigan
10.7%
Ohio
Ontario
9.9%
Indiana
9.8%
6.5%
Tennessee
6.1%
Kentucky
Alabama
3.9%
North Carolina
3.9%
South Carolina
3.4%
California
3.4%
• Ontario parts firms are leaders in the
development of innovative components, such
as, stampings, modules and systems, &
lightweight and composite materials
Source: Statistics Canada, US Bureau of Economic Analysis
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28
Areas of Automotive Expertise
Metal Processing
•
•
•
•
•
Advanced casting of light metals
Cutting and machining
Sheet and tube forming
Welding and joining
Powder metallurgy
Advanced Materials
•
•
•
Lightweight materials
Nano-materials
Bio-materials
Advanced Design, Visualization and
Manufacturing
•
•
•
•
•
Inspection and vision systems
Laser imaging
Tooling and robotics
Stereo-lithography, laser deposition
Virtual design
© 2013 Jerry Suyavong – Confidential
Information and Communications
Technology
•
•
•
•
•
•
•
•
•
•
•
Software engineering
Navigation and positioning
Wireless technologies and networks
Microchip design, system-on-chip, engineering
Semi-conductor technologies (MEMS, RF)
Telematics, communications
Micromachining
Intelligent systems
Photonics and optoelectronics
Nanotechnology
Enhanced synthetic vision
Advanced Technologies
•
•
•
•
•
Mechatronics
Powertrain engineering
Clean diesels
Homogenous charge compression ignition
Fuel cells, hydrogen and alternative fuels
Disclosure or duplication without consent is prohibited.
29
Canada Has Highly Educated and Multicultural
Workforce
Canada ranks #1 in the OECD for its college
completion rates (23.6% of working-age
Canadians have graduated from college)1
Canada ranks #2 in the G7 in terms of the
availability of qualified engineers in its
workforce, according to the IMD 3
The WEF ranks Canada #3 in a 139country study on the quality of
management schools 2
1
OECD. Education at a Glance 2009
International Institute of Management Development. World
Competitiveness Yearbook 2010.
3 World Economic Forum. Global Competitiveness Report 2010-2011
2
© 2013 Jerry Suyavong – Confidential
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30
Ontario has a Highly Educated Population
Post-secondary Educational Attainment (%), Select Markets, 2010
(Age 25-64)
Ontario
64
Canada
62
Ireland
50
Japan
44
United States
41
United Kingdom
38
Germany
35
France
Mexico
30
Overall, 64% of
Ontario’s
population has
completed
post-secondary
education
University: 30%
College: 27%
Apprenticeship: 7%
17
Note: Not all jurisdictions count apprenticeship as post-secondary education
Sources: Statistics Canada and OECD, 2012
© 2013 Jerry Suyavong – Confidential
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31
Ontario is a Leader in Recruiting and Retaining
a Highly Skilled Workforce
Overall People-Risk Rankings, 2012
Rank
City
1
New York City
2
Toronto
3
Singapore
4
Montreal
4
London
6
Los Angeles
7
Boston
8
Chicago
9
Vancouver
9
Copenhagen
9
Hong Kong
Out of 131 global cities examined,
Toronto ranked second for low risks
associated with employment and
redeployment.
Canada’s strengths are derived from
strict enforcement of equal
opportunity laws, clear governmentmandated health and retirement
benefits, low levels of corruption, and
the high quality and broad availability
of training facilities.
Source: AON Consulting, 2012
© 2013 Jerry Suyavong – Confidential
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32
Canada is a Great Place to Live!
● Among major auto producing
World Rank - Quality of Life Factors
nations*, Canada:
• has the highest quality of life;
• has the second lowest cost of
living and the lowest apartment
rents;
• is among the safest places to
live and do business; and
• is among the least afflicted by
pollution.
8th
19th
15th
17th
25th
54th
12th
18th
● Other Canadian advantages include:
10th
• high-quality, low-cost education;
• universal health care;
• cosmopolitan cities; and
• Multi cultural society
27th
20
US=1.00
* US, Canada, UK, France, Germany, Spain, Korea, Japan, Mexico, China
© 2013 Jerry Suyavong – Confidential
Source: IMD, World Competitiveness Yearbook 2006
Disclosure or duplication without consent is prohibited.
33
RESEARCH & DEVELOPMENT
© 2013 Jerry Suyavong – Confidential
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34
Snapshot of Automotive R&D in Canada
●
●
Expertise in light weighting, biomaterials and
composites, advanced safety systems,
software and the “connected car”, alternative
fuels (particularly EVs), vehicle testing, and
more
Focus on private and collaborative R&D
Automotive R&D Expenditures
(in CAD$ millions)
$700
$600
$500
$400
$300
$200
average
$450M/year
$100
$0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Statistics Canada
●
Annual R&D spending in the motor
vehicle and parts industry averaged $450
million in the last decade
●
Over 1,400 auto-related patents granted
to inventors based in Canada.
Climatic wind tunnel at UOIT-ACE
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35
Automotive OEM R&D Centres
Chrysler Canada Inc.
•
Automotive Research & Development Centre (Windsor ON)
Ford Motor Company of Canada Ltd.
•
•
Ford Manitoba Extreme Cold Weather Test Facility (Thompson MB)
Ford Powertrain Engineering Research & Development Centre (Windsor ON)
General Motors of Canada Ltd.
•
•
GM Canadian Regional Engineering Centre (Oshawa ON)
GM Cold Weather Development Centre (Kapuskasing ON)
Honda R&D Americas Inc. (Canada)
•
Environmental testing laboratory (Dartmouth NS)
Toyota Canada Inc.
•
Toyota Canada Cold Weather Research Centre (Timmins ON)
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36
Generous R&D Tax Credits/Programs
Scientific Research & Experimental Design
● SR&ED is a generous federal tax credit which encourages businesses in
●
all sectors to conduct R&D in Canada
SR&ED is worth $3 billion/year for the manufacturing sector
Industrial Research Assistance Program
● IRAP helps support innovative R&D and commercialization of new
products and services by small- and medium-sized firms
Automotive Partnership Canada
● APC is a five-year, $145 million program that supports collaborative
university-industry in four areas: environmental performance, the cognitive
car, next-generation manufacturing, and social sciences
Automotive Innovation Fund
● AIF is a 10-year, $500 million program designed to lever large ($75M or
more) investments in vehicle assembly, powertrain and R&D operations
that focus on innovation and environmental technologies
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37
World-class R&D Institutes/Universities
National Research Council - Automotive
● Network of 20 research institutes, many specializing in automotiverelated disciplines such as light materials, aerodynamics, alternative
propulsion, sensors and telematics
CanmetMATRIALS
● National laboratory (Hamilton and Calgary) run by Natural Resources
Canada for metals, materials and processing research in support of
manufacturing innovation
AUTO21
● National network of centres of excellence for automotive R&D,
regroups 200 researchers from 46 universities to conduct applied
R&D in partnership with private companies
Magna-NRC Composites Centre of
Excellence
● Research centre to develop coEmposite technology for the Canadian
and global automotive industries
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38
World-class R&D Institutes/Universities
Fraunhofer Project Centre @ Western
● Research centre and industrial-scale test facility focused on composite
technologies for weight reduction at Western University (London ON)
MacAUTO
● McMaster University Institute for Automotive Research and Technology
(Hamilton ON): The University’s numerous automotive-related research
institutes and centres work with industry, government and academic partners in
developing and commercializing new technologies and materials that will
ensure the global competitiveness of Canada’s auto industry.
UOIT-ACE
● Automotive Centre of Excellence at the University of Ontario Institute of
Technology (Oshawa ON)
WatCAR
● University of Waterloo Centre for Automotive Research (Waterloo ON)
University of Windsor
● Automotive engineering specialization and research partnerships, such as
AUTO21 and Chrysler’s ARDC
© 2013 Jerry Suyavong – Confidential
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39
Government Supported R&D Centres Located
throughout Ontario
© 2013 Jerry Suyavong – Confidential
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40
Ontario’s R&D Cost Advantage
After-Tax Cost of $100 R&D Expenditure, Small and
Medium Sized Manufacturers, 2012
R&D Cost Advantage (%)
12.7
Netherlands
Canada
France
Ontario
9.1
R&D expenditure
(general)
(at eligible Ontario
research institutes)
Gross expenditure
$100.00
$100.00
Actual after-tax
expenditure
$51.57
$40.11
10.7
9.1
5.2
UK
Germany
0.4
US
0.0
Italy
-1.1
Australia
-5.4
Japan
R&D
expenditure
-23.4
Ontario has a
9.1% cost
advantage
relative to the
US
Note: data as of April 13, 2012.
Sources: Ontario Ministry of Finance and Canada Revenue Agency
Source: MEDI analysis, prepared using CompetitiveAlternatives.com Cost
Model, 2012 version, accessed on March 30, 2012.
© 2013 Jerry Suyavong – Confidential
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41
Benefits of Collaboration
•
•
•
•
•
•
•
Mitigates the risk of innovation
Allows the inclusion of expertise outside a companies
historic strengths
Widens the reach of expertise
Provides access to a wider scope of funding
Takes advantage of embedded relationships and contacts
Expands the scope of available facilities and equipment
Both sides benefit from new ideas
© 2013 Jerry Suyavong – Confidential
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42
NEXT
GENERATION
VEHICLES
© 2013 Jerry Suyavong – Confidential
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43
Position to Take a Leading Role in the
Development of the Next Generation of Vehicles
•
•
Automakers are developing a broad spectrum of alternative, environmentally friendly
vehicles, especially electric vehicles (EV), among other technologies i.e. advanced
hybrids, CNG, fuel cells etc.
The government has partnered with a number of firms in order to position the province to
take a leading role in vehicle electrification and lightweighting, including:

$16.7 million for Electrovaya of Mississauga (Ontario) to develop and manufacture
lithium-ion batteries

$48.4 million for Magna International and Magna E-Car to develop advanced
lightweighting technology, electrification of vehicle components and battery
development.

$2 million for Dana Canada to develop ‘Thermal Management Systems’ for hybrids
and electric vehicles

$70.8 million to Toyota Motor Manufacturing of Canada on a spectrum of initiatives,
including production of the RAV4 EV
© 2013 Jerry Suyavong – Confidential
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44
At The Forefront Of Next Generation Vehicle
Technologies Research
•
Researchers in Ontario’s network of universities and specialized institutions are
conducting leading research in advanced manufacturing and alternative
energy:
 McMaster Automotive Resource Centre (MARC) is leading hub of advanced automotive
research and development. Ali Emadi, director of MacAUTO is the holder of the $10million Canada Excellence Research Chair in Hybrid Powertrain and is one of the
world’s foremost developers of electric and hybrid powertrain technologies
 AUTO21 partners with the public and private sectors and supports more than 300
researchers across Canada in a variety of auto-related research projects
 WatCAR, an automotive research centre at the University of Waterloo, is focused on
leading-edge studies to enhance automotive innovation and competitiveness
 University of Ontario Institute of Technology’s General Motors of Canada Automotive
Centre of Excellence is a state-of-the-art research facility (including a climatic wind
tunnel) created to further R&D in the Canadian automotive industry
 Magna-NRC Composite Centers of Excellence, supports the Canadian automotive
industry in developing next-generation vehicles with lighter, more durable parts, that are
safe, affordable, environmentally friendly, and fuel efficient
© 2013 Jerry Suyavong – Confidential
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45
Government Actively Supports the Auto
Industry
•
Ontario has made important investments to support the auto
sector and to improve the overall business environment in
the province, including:

Strategic Investments: In 2011 Ontario invested $121.2 million in innovative
automotive initiatives with Dana, Magna International, Magna E-Car and
Toyota

Ontario Automotive Investment Strategy (OAIS): A $500 million, 5-year fund
leveraged about $7.8B in total investment in the sector

Restructuring of GM and Chrysler: Ontario committed $4.8 billion to the
restructuring of GM and Chrysler

Next Generation of Jobs Fund: Provided support to a number of automotive
firms, such as Ford, Electrovaya, Mitchell Plastics and Alcohol Counter
Measures
© 2013 Jerry Suyavong – Confidential
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46
Government Commitments
•
•
•
•
Commitment to fight climate change and improve air quality
 The Ontario government aims to have one out of every 20 vehicles driven in
Ontario to be electrically powered by 2020, this would support the
greenhouse gas emissions target for 2020 set out in our Go Green Action
plan. Contribution may be up to 0.6 MT (600,000 tonnes) of GHG savings by
2020
Reducing the environmental impact of the Ontario government’s operations

Commitment to purchase 500 electric vehicles for the Ontario Public Service
(OPS) passenger fleet by 2020

Contributes to the OPS goal of an annual 5% reduction in fuel consumption
Supporting alignment and direction of Ontario’s auto sector
 ‘Greener’, more sustainable and more competitive with a strong focus on
high value- added development and production of innovative auto parts and
technologies
Supporting the government’s research and innovation agenda

Programs applicable to the research, development and commercialization of
electric vehicles and their components parts
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47
Commitment to Getting Electric Vehicles
(EVs) on the Road
The Government of Ontario has been active in encouraging consumer
adoption of Electric Vehicles (EVs).
Developments include:
 Consumer Incentives: Rebates of $5,000 - $8,500 offered to consumers to
purchase electric vehicles
 EV Infrastructure Fund: On May 4th 2012, Ontario released a Request for
Information (RFI) on electric vehicle infrastructure, including home and public
charging. The RFI closed on June 4th 2012. The RFI results are currently being
analyzed
 Access to High Occupancy Vehicle (HOV) Lanes: EVs are provided “green”
license plates for EVs to drive in commuter lanes (HOV) with one occupant
 Ontario is establishing a series of charging locations at GO commuter train
stations in the Greater Toronto Area (Aurora, Lincolnville, Whitby in 2011 and
Ajax, Erindale, Oakville, Burlington in 2012)
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48
OUTLOOK, CHALLENGES AND
OPPORTUNITIES
© 2013 Jerry Suyavong – Confidential
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49
Light Vehicle Sales
Canada and NAFTA, 1990 - 2013
Unit Sales (Mil)
Canada % of NAFTA
20
14
18
12
16
10
14
12
8
10
6
8
Canada
6
NAFTA
4
Canada %
4
1999-2007:
19-20 mil. unit NAFTA market
for new light vehicle sales;
Canada @ 8% of NAFTA LV
sales
2008-2011:
Canada outperformed NAFTA
as overall sales collapsed;
Canada @ 11% of NAFTA light
vehicle demand
2
2
0
0
2012-2013+:
Recovery and organic growth
(Mexico and Canada)
Source – Wards/AMIP/AutomotiveCompass
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50
Light Vehicle Production
Canada and NAFTA, 1990 - 2019
Unit Production (Mil)
Canada % of NAFTA
20
20
18
18
16
16
14
14
12
12
10
Canada
8
NAFTA
Canada %
6
10
8
6
4
4
2
2
0
0
Source – Wards/AMIP/AutomotiveCompass
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51
NAFTA LV Production by Jurisdiction
Ontario, Michigan, Mexico Volume Trends (Mil), 2000-2019
Unit Production (Mil)
Mexico (2008+) and Michigan
(2014+) auto output (new
investment driven) growing
sharply as Ontario declines
Mexico B-car/CUV growth from
Ford, GM, Nissan, Honda, Toyota,
Mazda; C-car and CUV from
Volkswagen
Michigan B/C/D/E/F/S, CUV and
SUV growth from GM, Ford,
Chrysler
Source – Wards/AMIP/AutomotiveCompass
© 2013 Jerry Suyavong – Confidential
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52
Top 10 Auto Supplier Trends
1. Customer
Facing Focus
2. Growth
3. Cost
Reduction
4. Technology
Increasing
the Value
of the
Business
5. Brand
Management
10. Core
Competencies
9. Systems &
Modules
8. Globalization
7. Resource
Pressure
6. Supply-Chain
Transformation
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53
Sources of Automotive Growth
Key Sources of Growth
Recovery
Products
Geography
New/Replacement Products
Global
Crises
New/Replacement Processes
Vertical Integration
M&A
JVs
Marketing
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54
Megatrends
New NAFTA Environmental Regulations
•
Smaller, lighter vehicles, with upgraded fuel-efficient powertrains
•
•
•
Will people want to drive much smaller vehicles? Will vehicle profit
be high enough to justify investment?
2017-2025 standards require a 65% improvement in fuel economy
over current levels.
Higher consumer ownership and operating cost.
•
•
Will consumers accept paying more … possibly much more … for
transportation?
How do we as suppliers support global platforms and still look after
local business opportunities?
© 2013 Jerry Suyavong – Confidential
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55
NAFTA Auto Outlook
Key drivers, enablers and constraints
2013
2014-16
– Employment/Income Growth
– Driving Age Population Growth
– Age of Fleet
– Ownership and Operating Cost
– Affluence/Financial Stability
– Technology
– Fuel Economy Regs
– Supply Chain Constraints
Source: AutomotiveCompass
© 2013 Jerry Suyavong – Confidential
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56
Challenges for Canada
•
•
•
•
•
•
•
•
High Exchange Rate
Low investment in new production facilities
Fiscally conservative governments at all levels
High infrastructure costs – energy, environment
A Southern production migration
Adaptation of global platforms
A conservative attitude
Lack of overall confidence
© 2013 Jerry Suyavong – Confidential
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57
Canadian Advantages
•
•
•
•
•
•
•
•
•
•
•
Health care costs
Stable, business-oriented environment
Productivity
Quality
Resources
Infrastructure
Tax structure
Highly skilled labour/well-educated workforce; positive work ethic
Strong product and technology mix
Strong supply-base
Modern and flexible manufacturing facilities
© 2013 Jerry Suyavong – Confidential
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58
Bridging the Innovation Gap
•
•
•
•
•
•
Innovation is the key to long term success
Applies to products, processes, tooling, systems
It implies a commitment to product excellence
OEM pulling technology rather than suppliers pushing
Key Organizations that make it happen (private,
associations & government)
A commitment that the Automotive Industry is an
essential and critical industry that always receives
primary attention
© 2013 Jerry Suyavong – Confidential
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59
Collaboration with Academia
•
•
•
•
•
•
•
Unprecedented amount of technical change in the next
10-12 years
Industry cannot get there on its own
Collaboration is the only alternative
Must have access to advanced research capabilities
It will create an unprecedented demand for HQP (highly
qualified personnel) and Technological Capability
Opportunities for new manufacturing processes and
procedures are abundant
Manufacturing shapes our future!!!
© 2013 Jerry Suyavong – Confidential
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60
Challenges for Industry
• Protecting Intellectual Property
• Protecting manufacturing and product “secret
sauce”
• The publish or perish imperative
• Adhering to automotive industry timing
requirements
• Adhering to cost containment issues
• Location of facilities in proximity to manufacturing
or engineering sites
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61
Episode IV – A New Hope
•
•
•
•
•
•
Innovation must be our priority
Encouraging progress that supports this initiative
• MARC Engineering Center
• CANMET Hamilton
• WatCAR Engineering Center
• UOIT Wind Tunnel and Facilities
Embrace a new model that encourages public private
partnerships (P3) that will drive innovation
Be open to learning from around the world
Be great partners – the commitment to excellence
A unique Canadian Identity
© 2013 Jerry Suyavong – Confidential
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62
The Connected Vehicle - Canadian Stakeholders
Connected
Vehicle
APMA
Automotive Parts
Manufacturers
ITS Canada
Intelligent Transportation
Systems
Government
EMC
Electric Mobility
Canada
First Responders
Police/ Fire/
Ambulance
Federal & Provincial
CTA – OTA
Academia
CUTA
Canadian & Ontario
Trucking Associations
University
Researchers
Canadian Urban
Transit Association
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63
THANK
YOU !
JERRY SUYAVONG
Email: jerry.suyavong@gmail.com
Skype: jerry.suyavong
Mobile: +1 (647) 709-7122
64