Auto import sales soaring
Study shows share reaching one-quarter of market this year
Tony Van Alphen
Business Reporter
Auto imports in Canada and the United States have climbed to their highest levels in two decades, providing union leaders with more ammunition for government intervention.
Canadian and U.S. sales of vehicles from other countries peaked in 1987 and then fell for about 10 years to less than 12 per cent.
Such sales have risen steadily in the past decade to more than 25 per cent of the market so far this year, according to DesRosiers Automotive Consultants.
The trend comes despite a lot more output by the same producers here. The change supports arguments by the Canadian Auto Workers union and some companies that imports are flooding the continent while their home countries put up trade barriers to curb sales of North American-made vehicles.
The union, which represents workers at the three struggling North American-based automakers in Canada, said the increasing number of imports is causing "industrial destruction."
"The surge of imports from offshore is the dominant factor behind the non-stop restructuring announcements we've been hearing from every automaker and almost every parts maker for the last three years," said CAW economist Jim Stanford. He estimated the Canadian industry would have been able to save about 20,000 jobs in the assembly and parts sectors if the offshore market share had stayed at 1997 levels.
The union has called for government intervention to press for fair access to foreign markets and force offshore companies to build more plants here to reflect sales.
In an analysis of the statistics, DesRosiers president Dennis DesRosiers said offshore imports peaked at 4.4 million vehicles, or 27.2 per cent of the market, in 1987, during a cyclical industry downturn in North America.
"We were in a cyclical downturn and this high level of offshore penetration decimated our production of vehicles, leading to significant cutbacks and plant closings at the manufacturing level and a real crisis was upon the industry," he added.
But the number of imports gradually fell to 1.8 million vehicles or 11.2 per cent of the North American market by 1996 as offshore-based automakers jacked up output here, DesRosiers' statistics indicated.
The trend changed again in 1997. Imports started climbing to 4.1 million vehicles last year, or 23.4 per cent. Imports will surpass 4 million this year and hold about 25.5 per cent of the market, DesRosiers predicted. "This is one of the reasons that the cyclical downturn in the market is hurting the sector so much," he said.
"Not only are consumers buying fewer vehicles" he added, "but about a million more of the vehicles that consumers are buying (annually) are being sourced outside North America."
But DesRosiers said the growing popularity of offshore autos may lead to a new round of assembly plants in North America since it would be more profitable to build them here because of high volumes.
