Canada losing ground to Mexico in manufacturing race

By: | Issue #658 | at 10:04 AM | Channel(s): International Trade  

Canada losing ground to Mexico in manufacturing race

Two years back, prominent Canadian economist and car industry analyst Dennis DesRosiers shocked his countrymen when he predicted that Canada’s car manufacturing would completely die in the decades ahead.

“Somewhere between 2030 and 2040 we’ll be Australia,” he told The Economist, referring to Australia, whose three manufacturers will all cease production by the end of this year.

Imports into the US from Canada and Mexico are almost at a par with each other. Last year, some 2.7 million vehicles were shipped from Mexico to the US, while 2.3 million came from Canada. But the trajectories of the two countries couldn’t be more dissimilar. Despite Ford’s well-publicized scrapping of a plant in the Central Mexican state of Guanajuato and Toyota and Mazda’s recent announcement of a new joint venture plant in the US, manufacturers have been pouring into Mexico, while investment in Canada’s auto industry is down to a trickle. (The new joint venture plant, for example, will likely produce Toyota Corollas now made in Canada.)

Add to that the likelihood that Chinese manufacturers will possibly set up plants in Mexico and the gap will only grow larger over the years ahead…

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American Journal of Transportation