NTRODUCTION
The Automotive industry (including auto components) is the largest segment of the manufacturing sector and is a key constituent of Canadian economy . The Canadian automotive sector is the eighth largest in the world (in production terms) and account for 6.71% of the countries GDP (see Annexure I). The sector is also a key source of employment providing jobs to over 570,000 Canadians in 12 light assembly plants and more than 900 auto parts manufacturers .
The automotive sector is highly export oriented in nature - the export figure for the sector for 2006 stood at CAN $49.93 bn (Annexure II) which constituted over 80% of the domestic production . A lion's share of the exports is directed to the US market ? approximately 97% of the total auto exports are made to the US market .
The automotive sector in North America is in a state of flux and the sector is witnessing a major restructuring at this point of time. The future developments in this sector will have important economics and social ramifications for both the US and Canadian economies. Thus in this paper we have decided to provide a brief background to the sector and analyze the competitive landscape and the key competitive issues facing Canadian Auto manufacturers.
PROBLEM DEFITION
The Canadian automotive sector witnessed a boom in foreign investments during the 90's ? the substantially lower labor costs and the weaker Canadian dollar. However much of the competitive advantage enjoyed by Canada has since been eroded by a stronger Can $, increasing costs and changing competitive situation in the US.
The last few years have seen a decline in the fortunes of the Canadian automotive industry on account of the restructuring and downturn in the US market. Between 2000 and 2005 th ...