Ottawa, Ontario – The Canadian automobile industry could be profitable as early as 2010, according to a new report by the Conference Board of Canada.
The study, Canadian Industrial Outlook: Canada’s Motor Vehicle Manufacturing Industry – Autumn 2009 said that the industry will close 2009 with a pre-tax loss of $2.3 billion, but is expected to post a profit of $263 million in 2010.
“The Canadian auto industry appears to have turned a corner in the second half of 2009 and is expected to return to profitability in 2010,” said economist Sabrina Browarski. “However, production will remain below historical levels. Manufacturers will have to make concerted and ongoing efforts to streamline product lineups, control costs, and innovate to maintain profitability.”
The report said that “good news” will trickle into the motor vehicle industry gradually as the U.S. economy stabilizes and jobs are created through 2010. U.S. vehicle sales are expected to edge up to 11.6 million units in 2010, still well below their historic levels, but enough for industry revenues to rise by nearly 38 per cent.
Canadian auto production was operating at just 26 per cent of capacity in January 2009, and for the year as a whole, production will be barely half of what it was in 2007. Production is expected to steadily improve as U.S. car sales recover, but will remain below its historic high in the medium term.