July 31, 2006

Ontario remains number one in vehicle production, analyst says

Richmond Hill, Ontario – Ontario has maintained a comfortable lead over Michigan as the number one jurisdiction in North America for the production of vehicles, says industry analyst Dennis DesRosiers. In 2005, Ontario produced 2,675,788 vehicles, while Michigan produced 2,516,633. The Canadian province first out-produced Michigan in 2004.

“Michigan has obviously been hurt by the declining fortunes of GM, Ford and DaimlerChrysler and will likely see even more production declines as the current restructuring of these companies play themselves out,” DesRosiers says. “In addition, Michigan is highly unionized and has only attracted one new domestic producer (Mazda in Flat Rock) while Ontario has four new domestic plants (two Honda, Toyota and CAMI) and is about to see a fifth when Toyota opens next year. Ontario also spent most of the last two decades aggressively promoting investments with the Japanese and welcoming them into our province, while Michigan politicians, at all levels of government, spent most of the last two decades fighting the import nameplate companies, arguing for quotas, tariffs, etc., and in general being negative to any and all import nameplates.”

Other top-producing areas include Ohio at 1.79 million units, Kentucky and Missouri at 1.15 million units, Indiana at 773,000 units, Tennessee at 693,000 units, Alabama at 479,000 units, Illinois at 455,000 units, and California at 422,000 units.

“It is going to be tough but Ontario should be able to maintain and possibly grow its production over the next few years,” DesRosiers says. “We know that Toyota is adding a significant plant in Cambridge and GM, Ford and DaimlerChrysler have all recommitted to most of their plants in Canada. Honda has two significant plants and is holding its own. And CAMI is finally getting full use of its capacity in Ingersoll. There might be some lost production at GM and Ford with their restructurings announced last fall and in January, but the Toyota investment should offset these losses.”

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