Canada is the second-largest automotive industry in North America, with five main assembly lines: Ford, General Motors, Stellantis, Toyota, and Honda. Like any other market, the Canadian automotive market faced unforeseen challenges during the COVID-19 pandemic, with sales reducing and production stopping due to the shutdown.
However, Canada has slowly emerged from the crisis year after year. The production has increased, and so have the sales and profitability. Based on the Development Assistance Committee (DAC). Four out of five light vehicles experience growth. Toyota was leading in production, followed by Honda.
Understanding the pandemic’s impact
During the pandemic's peak, things became hard for automotive manufacturers and dealers due to shutdown, economic uncertainty, and supply chain disruption. Imports in the automotive sector declined by 24% in 2020. However, in 2021, they reported a 23% growth compared to the previous year and 15% in 2022. There have been changes in consumer spending that have led people to buy more cars over the years.
Emerging trends in the Pandemic era
Structural and major shifts are happening after the severe impacts on demand and sales of automobiles due to COVID-19. A key market shift is the growing demand for electric vehicles. The Federal government is working towards net-zero emissions, which it is trying to achieve by 2050. The goal is to sell 60% of zero-emission new vehicles by 2030 and 100% by 2035. Additionally, technology integration is rising with the advanced driver assistance systems fueled by environmental consciousness and government incentives.
Challenges and Opportunities
With carbon neutrality being the main goal of the Canadian automobile industry, some challenges and opportunities come with it. The transition to electric cars presents both challenges and opportunities. The need for innovation and infrastructure poses the main challenge to manufacturers.
However, amidst these challenges, there are opportunities for collaboration that will drive growth and sustainability in the auto industry. Canada’s tier 1 and 2 automotive manufacturers have a very large supply chain to cover various high-tech needs for their process.
Strategies for Success
After the pandemic, the Canadian car market needs to bounce back to its former state. We need to be strong and able to change. This means having flexible business ways, ensuring our supply chains are tough, and investing in new ideas and technology. By being creative, working together, and caring for the environment, everyone involved in the car industry can improve things for the future.
The Road Ahead
Things are looking up for the Canadian car market after the pandemic. Even though there are problems, we're still growing. With help from the government and new technology, zero-emission vehicles will be possible, and inventory levels will increase by 2050.
