Automotive industry in Canada

The automotive industry in Canada consists primarily of assembly plants of foreign automakers, most with headquarters in the United States or Japan, along with hundreds of manufacturers of automotive parts and systems.

Canada is currently the ninth-largest auto-producing nation in the world, and fourth largest auto exporter by value, producing 2.4 million vehicles and exporting $48.8 billion worth of vehicles in 2016. Canada's highest rankings ever were the second-largest producer in the world between 1918 and 1923 and third-largest after World War II.

Automotive manufacturing is one of Canada’s largest industrial sectors, accounting for 10% of manufacturing GDP and 23% of manufacturing trade. Canada produces passenger vehicles, trucks and buses, auto parts and systems, truck bodies and trailers, as well as tires and machines-tools-dies-molds (MTDM). The auto industry directly employs more than 125,000 people in vehicle assembly and auto parts manufacturing, and another 380,000 in distribution and aftermarket sales and service.

The oldest surviving vehicle manufactured in Canada was the Redpath Messenger built-in 1903. It had a wooden carriage body using a one-cylinder engine with shaft drive and two speed transmission. It was the first vehicle in automotive history with a tilt steering wheel. It weighed approx 650 pounds and sold for between $600 and $700 with a top speed of 10 miles per hour. There is only one model known to exist, currently on display at the Canadian Automotive Museum.

The first large-scale production of automobiles in Canada took place in Walkerville, Ontario, near Windsor, in 1904. In the first year of operations, Gordon McGregor and Wallace Campbell, along with a handful of workmen produced 117 Ford Model Cs at the Walkerville Wagon Works factory.

Through marques such as Brooks, Redpath, Tudhope, McKay, Galt Gas-Electric, Gray-Dort, Brockville Atlas, Chatham, Anhunt, Russell (CCM), Hyslop and Ronald, and McLaughlin, Canada had many domestic auto brands. In 1918, McLaughlin was bought by an American firm, General Motors, and was re-branded General Motors of Canada. In the 1930s, Studebaker built its Rockne in Canada.

Driven by the demands of World War I, Canada's automotive industry had grown, by 1923, into the second-largest in the world, although it was still made up of relatively inefficient plants producing many models behind a high tariff wall. High consumer prices and production inefficiencies characterized the Canadian auto industry prior to the signing of the Canada–United States Automotive Products Agreement.

The 1964 Automotive Products Trade Agreement or "Auto Pact" represents the single most important factor in making the Canadian automotive industry what it is today. Key features of the Auto Pact were the 1:1 production-to-sales ratio and Canadian Value Added requirements. As of 2015 major car companies that operate are Fiat-Chrysler, Ford, General Motors, Honda, and Toyota.[1]

Among the seventeen vehicles assembled in Canada, excluding assembly costs, the amount of Canadian parts content in the average vehicle assembled in Canada was $4,105 in 2016 or 17.2 percent of the overall parts content, according to a study by DesRosiers.[2] The number has fluctuated between 25.6 per cent and as low as 13 per cent in recent years.[2] Another estimated that the overall Canadian content figure is between 20 per cent and 24 per cent.[2] Canadian content at plants run by Honda and Toyota would likely be higher because they do more in-house manufacturing of parts, such as plastic-injection-moulded components, than the Canadian plants operated by the Detroit Three.[2]