Los Angeles, CA (PRWEB) March 01, 2013
The Car and Automobile Manufacturing industry in Canada has been on a bumpy road over the past five years. At the onset of economic turmoil in 2008, many of the larger automakers had already been enduring falling consumer demand for new vehicles. The problem was only exacerbated by the automotive crisis in the United States, the effects of which ultimately flowed through to Canadian automobile producers. “In 2008 and 2009, industry revenue plummeted 15.1% and 19.8%, respectively, as production at Canadian manufacturing plants was halted due to crippled consumer demand,” says IBISWorld industry analyst Antonio Danova.
The pace of the Car and Automobile Manufacturing industry in Canada generally moves in lock-step with export demand from the United States. Overall, the United States has consistently accounted for over 98.0% of all Canadian automobile exports over the past five years, including a 98.4% share of exports in 2013. “As US demand for vehicles plummeted during the recession, Canadian production was hampered,” adds Danova. “On the other hand, the recovery in the US automotive market in 2010 proved to be a boon for this industry.” Consumers flocked back to the market to make new vehicle purchases that had been delayed during the downturn, resulting in a 24.4% jump in revenue for 2010. Since then, the industry has continued on its path toward growth. As a result, IBISWorld expects revenue to grow 2.6% per year on average to roughly $20.6 billion over the five years to 2013, including a 2.0% increase in 2013.
The industry carries a moderate level of market share concentration. The industry landscape is dominated by several automakers that compete on a global level, including the major companies General Motors, Chrysler, Toyota and Honda. Overall, the level of industry concentration has remained relatively unchanged over the past five years, but the individual market share for each of the automakers has fluctuated significantly. While the US companies dealt with bankruptcies and suffered throughout their recession, Toyota capitalized on the opportunity to gain more market share. Nonetheless, some of Toyota's market share was cannibalized by the US Big Three in recent years in light of the production halt and parts shortage from the Great East Japan Earthquake. Over the next five years, IBISWorld expects market share concentration to remain relatively unchanged.
In the next five years, automakers will continue to benefit from steady new car sales. However, rising oil prices may ultimately subdue the true growth potential of the industry, as more expensive gas prices generally make consumers reticent to purchasing new cars. Still, a silver lining in high gas prices is that demand for hybrids and electric vehicles (EVs) is likely to rise. Higher production of these vehicles, which carry added technology and are sold at premiums, will lead to greater profitability within the industry, while simultaneously inflating revenue. As a result, industry revenue is expected to grow over the five years to 2018. For more information, visit IBISWorld’s Car and Automobile Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry manufacture cars and automobile chassis. These companies, referred to as automakers, typically produce cars, including electric cars, in assembly plants. The manufacture of light trucks (e.g. vans, pickups and SUVs), heavy trucks and motorcycles is excluded from this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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