Auto Manufacturing Spending Lagging Pre-Recession Levels

The Prime Minister of Canada, Justin Trudeau, and Premier of Ontario, Kathleen Wynne, joined Unifor officials during the Ford of Canada investment announcement at the Essex Engine Plant in Windsor, Ontario, on 30 March 2017. Photo by John Skinner.

The Prime Minister of Canada, Justin Trudeau, and Premier of Ontario, Kathleen Wynne, joined Unifor officials during the Ford of Canada investment announcement at the Essex Engine Plant in Windsor, Ontario, on 30 March 2017.
Photo by John Skinner.

(RICHMOND HILL, ON) – New capital expenditures within the automotive manufacturing sector, focusing on motor vehicle assembly, parts and accessories, and truck body and trailer manufacturing, peaked in 2007 when total expenditures reached $4.1 Billion. In line with the financial crisis of 2008, capital expenditures dropped significantly to $1.7 Billion by 2009 and reached their lowest point in 2013 at just $1.1 Billion.

Despite small, occasional increases in the period between 2008 and 2017, there has been no sustained indication of a return to the heights recorded in the mid to late 90s and late 2000s. Canada’s loss of investment market share to Mexico and the southern US over this period has been well documented.

The average new capital expenditures for the motor vehicle assembly industry averaged $2.3 Billion dollars between 2000 and 2009. For 2010-17, this average dropped to $1.2 Billion; nearly half of the average in the last decade. While not quite as dramatic, the average new capital expenditures for the motor vehicle parts and accessories industry dropped from an average of $887.7 million to $565.9 million during the same time periods.

Contrary to the trend among both the motor vehicle assembly and motor vehicle parts and accessories assembly industries, investment in the truck body and trailer manufacturing industry increased and recorded average capital expenditures of $82.7 million for 2010-17 against $52.7 million for 2000-09.

More information on these numbers can be found in the DesRosiers Automotive Reports published by DesRosiers Automotive Consultants Inc. For more information on these reports please call 905-881-0400 x26 or email.

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About the Author

Dennis DesRosiers
Dennis DesRosiers
Since the founding of his independent consulting practice in 1985, Dennis DesRosiers has become Canada’s leading automotive industry analyst and one of the foremost theorists in the North American automotive industry. Email Dennis DesRosiers
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