SOURCE: Scotiabank

Scotiabank

September 24, 2014 08:00 ET

Canadian Auto Parts Industry Revs Up: Scotiabank Economics

TORONTO, ON--(Marketwired - September 24, 2014) - Global car sales moved higher in August, but the year-over-year gain moderated to only 1% -- the smallest advance of the past year, according to the Scotiabank Global Auto Report released today. In Canada, passenger vehicle sales remained above an annualized 1.9 million units for the second consecutive month, as enhanced incentives and the popularity of light trucks -- especially crossover utility vehicles -- more than offset a weak job market.

"The Canadian auto parts sector is rebounding sharply, benefiting from a recovery in U.S. vehicle sales, the highest North American production in a decade, as well as from the depreciation of the Canadian dollar over the past year and a half," said Carlos Gomes, Senior Economist and Auto Industry Specialist at Scotiabank. "Auto parts shipments and exports have posted double-digit gains so far this year, climbing in July to the highest level since late 2007, prior to the global economic downturn.

"Highlighting the improving fundamentals in Canada's auto parts sector, employment has jumped 5% over the past year -- the sharpest gain since 2000 when the industry was motoring throughout North America."

Other highlights in the report include:

  • While the U.S. will continue to be the main destination for Canadian auto parts exports, shipments to other jurisdictions have increased by 20% so far this year, outpacing the 16% advance to the U.S.
  • Canadian-made vehicles have the highest content of imported parts among the major vehicle-producing nations. Each vehicle built in Canada contains roughly $16,000 of imported auto parts -- double the global average and at least 25% higher than vehicles built in either the U.S. or Mexico.

Read the full Scotiabank Global Auto Report online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.

Scotiabank is a leading financial services provider in over 55 countries and Canada's most international bank. Through our team of more than 86,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers. With assets of $792 billion (as at July 31, 2014), Scotiabank trades on the Toronto (TSX: BNS) and New York (NYSE: BNS) Exchanges. Scotiabank distributes the Bank's media releases using Marketwired. For more information please visit scotiabank.com.

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