|
|
 |
|
Viewing report
|
|
|
|
Canada Autos Report Q1 2011
Business Monitor International, Aug 2010, Pages: 23
Business Monitor International's Canada Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Canada's automotive industry.
New vehicle sales in Canada look set to finish 2010 with positive growth, although this will be largelydue to a resurgence in light truck sales, as the passenger car segment was down year-on-year (y-o-y) forthe 11 months to November. Sales of light trucks have remained buoyant and segment growth of 26% inNovember ensured that total vehicle sales for the month rose 13.6%. We have revised our full-yearforecast for 2010 up to 9% to sales of 1.59mn units, despite passenger car sales for the 11-month periodbeing 4.9% lower y-o-y.
However, BMI cautions that some of the most generous cash incentives have been offered in the truckmarket, which could be inflating natural growth. Looking ahead, BMI believes that sales growth canremain positive, with growth to moderate to an annual average of 2.5% for the remainder of the five-yearforecast period, also slightly higher than our previous projection of a 1% average. We have also raised ourproduction forecast for 2010 to show growth of 40% as shifts are added at major plants. However, as thisis largely due to the low base effect from 2009 when inventories were heavily slashed, we expect growthto return to an annual average of 5% thereafter.
Part of this increase in production comes as General Motors Company (GM) ramps up output, whichwas partly a condition of its aid from the governments of Canada and Ontario. When GM launched itsIPO in November, however, both governments declined the offer to sell more of their shares, choosing tobank on a rally in the share price in order to 'maximise taxpayer protection', according to federal IndustryMinister Tony Clement.
Supplier Magna International is also relying on its share price for future planning. After buying outchairman and former controlling shareholder Frank Stronach, Canadian automotive partssupplier Magna sees great potential in funding its global expansion through acquisitions, using 'shares asa currency', according to CEO Don Walker. The company's shift from its costly traditional NorthAmerican and European bases has taken it to the BRIC states, which BMI expects to account for onethirdof all global vehicle sales by the end of 2010. Magna will also dip into a cash pile of aroundCAD1.4mn, which has amassed under Stronach, as it looks to target acquisitions that meet three keycriteria. Geography will be a major deciding factor, along with the technology on offer and whether thecompany has customers of interest to Magna, according to Walker.'
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
