THE AUTOMOTIVE AND CONSTRUCTION

Transcription

THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY
CANADA
Fact Pack
Swedish Trade Council in Canada
2006
1
CONTENT

Overview Canadian Manufacturing Industry

Canadian Automotive Industry

Canadian Construction Equipment Industry

Recommendations

References

Appendices
Notes:
1.
The exchange rate in this report is: 1CA$ = SEK 6.5669 (as of June 1st, 2006)
2.
See Appendix 1 for definition of automotive terms used in this report.
2
THE AUTOMOTIVE INDUSTRY ACCOUNTS FOR 18.6% OF TOTAL
MANUFACTURING SHIPMENTS IN CANADA
Canada’s 5 largest manufacturing industries (2005)

Total shipments of the Canadian manufacturing
industry are more than SEK 4,015 billion (2005)

The average wage for a manufacturing industry
worker in Canada is SEK 135.34/hour (2005)

There are approximately 97,860 companies* within
the manufacturing industry in Canada (2005)
Shipments value, SEK billions
Automotive
(Assembly & Parts)
749.57
449.79
Agri-Food
Petroleum/Coal
Products
359.90

314.23
Chemical
Primary Metals

304.36
0
200
400
Manufacturing employs 1.9 million workers (2003)

600
800
SEK billion
40,000 firms are directly tied to the automotive
industry (manufacturing, sales, distribution, repair)
Automotive manufacturing – assembly and parts –
directly employs 231,800 thousand workers (2005)
*Includes 37,275 owner-operated (non employers)
and indeterminate
The Automotive Industry is Canada’s largest manufacturing sector
Sources: Statistics Canada; Desrosiers Automotive Consultants
3
CONTENT

Passenger cars and commercial vehicles

Commercial vehicles

Suppliers

Recommendations

References

Appendices
4
THE CANADIAN PRODUCTION OF LIGHT AND HEAVY VEHICLES
TOTALS SEK 458 BILLION
Canadian Automotive Industry Shipments
Automotive Production by Sector in Canada
(2005)
600 SEK billion
Heavy Vehicle
(Heavy Trucks, Buses)
500
SEK 39.6 billion
400
5%
33%
300
200
58%
4%
Auto parts
and
components
SEK 240.5
billion
100
0
2001
2002
Value of Shipments
2003
2004
Total Exports
Light Vehicle
2005
(Passenger Cars, Light Trucks)
SEK418.5 billion
Total Imports
Motor Vehicle Body
and Trailer
SEK 26.8 billion
Canada exports about 76% of total automotive production, primarily to the U.S.
Sources: Desrosiers Automotive Consultants; Industry Canada; KPMG’s Guide to International Business Costs, 2006 edition
5
2.7 MILLION VEHICLES WERE PRODUCED IN CANADA IN 2005
VEHICLE
VEHICLE MANUFACTURERS
MANUFACTURERS
PASSENGER
PASSENGER CARS
CARS
(1,356,198
(1,356,198 vehicles)
vehicles)
COMMERCIAL
COMMERCIAL VEHICLES
VEHICLES (1,332,165
vehicles)
LIGHT
LIGHT TRUCKS*
TRUCKS*
(1,267,353
vehicles)
(Weight < 6.35 t)
Key manufacturers

GM

Daimler-Chrysler

Ford

Toyota

Honda

CAMI Automotive
HEAVY
HEAVY TRUCKS
TRUCKS
(64,812
(64,812 vehicles)
vehicles)
(Weight > 6.35 t)
Key Heavy Truck mfrs.

Canadian Kenworth

International Truck &
Engine Corporation

Sterling Trucks

Hino Motor Ltd
BUSES
BUSES
(Estimated
(Estimated 20,000**
20,000** vehicles)
vehicles)
Key Bus manufacturers

Canadian Bluebird Coach

Entreprise Michel Corbeil

Motor Coach Industries

Orion Bus Industries

Prévost Car Incorporated

Novabus Corporation

New Flyer Industries

A. Girardin Inc.
*Minivans, SUVs and pick-up trucks are
categorized ‘light trucks’ in Canada although
they are mainly for non-commercial use.
Sources: R&I; Estimate of bus vehicles based on manufacturer websites
and telephone interviews
Key manufacturers

GM

Daimler-Chrysler

Ford

Toyota

Honda

CAMI Automotive
**In Canada bus production is included with heavy trucks
6
CONTENT

Commercial vehicles

Suppliers

Recommendations

References

Appendices
7
TOTAL PASSENGER CAR PRODUCTION IN CANADA IS STABLE
- Decline of North American Big Three against the rise of foreign OEM’s
Passenger Car Production in Canada
Development the last 5 years
Vehicles

1,500,000
1,200,000
Market share loss of North American Big Three
(GM, Ford, Daimler-Chrysler) matched by gain
of foreign OEMs

900,000

600,000

300,000
Government stepping up automotive investment
promotion, especially to Japan and Europe

0
2001
2002
2003
2004

2005
Sources: R&I; Desrosiers Automotive Consultants
8
Foreign OEMs (Toyota, Honda) surpassed the
Big Three sales of light vehicles (cars and light
trucks) in Canada in 2003
Big Three are undertaking major restructuring to
combat shrinking market share
SEK 6 billion in federal and provincial
government aid from 2004-2006
Capital investments in Ontario at an all-time high
Recently announced expansions by major auto
makers and parts suppliers (see Appendix 3)
FOREIGN HEADQUARTERS MAKE PURCHASE DECISIONS OF ‘BIG 3’,
WHILE JAPANESE AUTO MAKERS DELEGATE TO LOCAL PLANTS
Passenger Cars
Manufacturer
Employees
Business
Purchase decisions
Market
Share*
Foreign
Ownership
GM
20,000
Passenger cars and
light trucks
Partly GM Worldwide
Purchasing / Partly Canadian
HQ, Oshawa, Ontario
28.7%
100%
DaimlerChrysler
11,000
Passenger cars and
light trucks
Corporate HQ, Auburn Hills,
Michigan (U.S.A)
13.7%
100%
Ford
13,000
Passenger cars and
light trucks
Corporate HQ, Dearborn,
Michigan
13.4%
100%
Toyota
4,500
Passenger cars
Toyota Motor Manufacturing
Inc., Cambridge, Ontario
11.1%
100%
Honda
4,900
Passenger cars and
light trucks
Partly North American HQ,
Ohio (U.S.A.) / Partly Honda
plant, Alliston, Ontario
9.8%
100%
CAMI Automotive
(GM-Suzuki)
2,300
Passenger cars and
light trucks
Partly GM Worldwide
Purchasing / Partly CAMI plant,
Ingersoll, Ontario
(Incl. with
GM; Suzuki
is separate)
100%
*Market share = % of vehicles sold in 2005 (does not add up to 100% due to share of market for other imported vehicles)
9
ONTARIO IS CANADA’S AUTOMOTIVE POWERHOUSE AND HOME
TO ALL LIGHT VEHICLE ASSEMBLY PLANTS
Manufacturer
GM
Plant
Models and focus
Unit
production
volume
(2005)
Oshawa #1
Oshawa #2
Impala, Monte Carlo,
Allure/LaCrosse,
Grand Prix
Silverado, GMC Sierra
314,032
251,161
Oshawa (Light
Truck)
Ontario is North America’s top producer of light vehicles.
312,482
CAMI
(GM-Suzuki joint
venture)
Ingersoll #2
Torrent, Equinox,
Suzuki XL-7
165,256
DaimlerChrysler
Brampton
Windsor
300M, Magnum, Charger
Grand Caravan, Town &
Country, Pacifica
291,888
350,368
Oakville
Freestar and Monterey
New Flex Mfg. Plant
(completion 2006)
Crown Victoria,
Grand Marquis
118,112
Ford
Ontario accounts for 97% of Canada’s total automotive
production (2005) and has the highest concentration of
the country’s population (see Appendix 2).
Toyota
Lexus RX330
Corolla, Matrix
Plant under construction
(completion 2008)
66,783
214,353
Canada ranks 8th in the world for light motor vehicle
production (2003).
Cambridge #1
Cambridge #2
Woodstock
Honda
Alliston #1
Alliston #2
Civic, Acura EL
Acura MDX, Pilot,
Ridgeline
192,853
202,705
St. Thomas
10
Source: Automobil Produktion
150,450
SOUTHWESTERN ONTARIO LIGHT VEHICLE* ASSEMBLY PLANTS
Light Vehicle Plants
1
CAMI Automotive
2
DaimlerChrysler Brampton
3
DaimlerChrysler Windsor
4
Ford Oakville
5
Ford St. Thomas
6
GM Oshawa Car 1-2; Oshawa Truck
7
Honda Alliston 1-2
8
Toyota Cambridge 1-2
Toronto
7
6
2
8
Mi
ch
iga
(U n S
SA ta
te
)
1
5
3
*Light Vehicle = Passenger Cars, Light Trucks
11
4
OEMs FOCUS ON IMPROVING PRODUCTION EFFICIENCY & SUPPLY
CHAIN INTEGRATION
Trends within the Canadian passenger car industry

Competition between OEMs for market share is keeping profitability under pressure

Fierce
Fierce
competition
competition

Outsourcing of high-value design and engineering by OEMs is on the rise

Buyer’s
Buyer’s
market
market

R&D
R&D
Outsourcing
Outsourcing
The Big Three are struggling remain competitive against foreign OEMs that are rapidly gaining
market share in North America
OEMs are putting the squeeze on their suppliers in an effort to reduce costs, as raising prices is
out of the question
Growing collaboration between automakers and suppliers on parts and vehicle design
Synchronized planning and execution (OEM Æ Tier 1 Æ Tier 2)
Integrated R&D with OEM using concurrent engineering
Automotive OEMs are facing an increasingly consumer-driven market

Fragmented vehicle market means firms must be able to react rapidly to changes in demand
OEM’s are investing in flexible assembly plants that allow for quick change-over in production by
building a number of models on a single platform
12
CONTENT

Commercial vehicles

Suppliers

Recommendations

References

Appendices
13
GROWING DEMAND HAS RESULTED IN STEADY CLIMB OF HEAVY
TRUCK PRODUCTION
Commercial Vehicle Production in Canada
Development the last 5 years
Vehicles
1,400,000

1,350,000
High levels of freight movement and a strong
economy are driving increased demand

1,300,000

1,250,000
1,200,000

Hino Motors Canada recently became the first
Japanese truck maker to locate an assembly
plant in Canada (June 2006)

Canadian and U.S. governments passed
regulations in 2002 to virtually eliminate heavy
truck emissions of particulate matter by 2007,
and nitrous oxides by 2010
1,150,000
1,100,000
1,050,000
2001
2002
Light Trucks
2003
2004
2005
In terms of value, 60% of Canada/U.S. trade is
moved by truck (2005)
Over 37,000 trucks cross the Canada/U.S. border
each day
Heavy Trucks (incl. Buses)
NOTE: Light trucks data includes an estimated 70% non-commercial vehicles including mini-vans, SUVs, and pick-up trucks. Reported under commercial
vehicles for the purposes of this report.
Sources: R&I; Canadian Trucking Alliance
14
PURCHASE DECISIONS OF SOME LARGER FIRMS MADE BY FOREIGN
HEADQUARTERS, BUT MANY OTHERS MAKE DECISIONS LOCALLY
Commercial vehicles –
Heavy Trucks
Manufacturer
Employees
Business
1,500
Heavy trucks
Corporate HQ, Cantera, Ohio
(U.S.A.)
100%
758
Heavy trucks
Paccar Corporate HQ,
Belleview, Washington (U.S.A.)
100%
Sterling Trucks (owned by
Freightliner, a division of
DaimlerChrysler)
1,100
Heavy trucks
Business Unit HQ, Redford,
Michigan (U.S.A.)
100%
Hino Motors Ltd. (Division
of Toyota)
45*
Light and Heavy
trucks
Woodstock plant, Ontario
100%
International Truck and
Engine Corporation
(Owned by Navistar)
Canadian Kenworth
(Division of Paccar of
Canada Ltd.)
*Present number of employees, plant is to be completed 2006.
15
Purchase decisions
Foreign
Ownership
BOTH FOREIGN- & DOMESTIC-OWNED CANADIAN BUS
MANUFACTURERS MAKE KEY PURCHASE DECISIONS LOCALLY
Commercial vehicles Buses
Manufacturer
Employees
Business
Purchase decisions
Foreign
Ownership
Ltd.
3,000
School buses
Corporate HQ Fort Valley, Georgia
(U.S.A.) / Brantford plant, Ontario
100%
300
School buses
St Lin-Laurentides, Quebec
0%
2,000
Highway (coach)
buses
Winnipeg, Manitoba
100%
550
Urban transit buses
Mississauga plant, Ontario / Some
through central purchasing of HQ,
Greensboro, North Carolina (U.S.A.)
100%
1,435
Highway (coach)
buses
Sainte Claire, Quebec, Canada
100%
Novabus (division of
Prévost, a subsidiary of
Volvo Bus Corporation)
550
Urban transit buses
St. Eustache plant, Quebec / Growing
coordination with Volvo Bus Group
Purchasing, Göteborg, Sweden
100%
New Flyer Industries Ltd.
2100
Urban transit buses
HQ, Winnipeg, Manitoba
100%
A.Girardin Minibus Inc
200
Mini school buses
HQ, Drummondville, Quebec
0%
Orion Bus Corporation (sub.
of DaimlerChrysler)
Prévost Car Inc.
(sub. of Volvo Bus Corp.)
16
MOST HEAVY TRUCK MANUFACTURERS ARE LOCATED IN
SOUTHWESTERN ONTARIO AND QUEBEC
Manufacturer
Canadian Kenworth
Plant
Models and
focus
Unit
production
volume (2005)
Manac
Hino Motors
Sterling Trucks
Trailmobile
International Truck and Engine
Sources: 2006 APMA Directory, Company websites and contacts
International Truck and
Engine Corporation
(owned by Navistar)
Chatham,
Ontario
Class 7-8
trucks
40,000
Canadian Kenworth
(Division of PACCAR of
Canada Ltd.)
Ste.
Therese,
Quebec
Class 5-8
trucks
14,200*
Sterling Trucks (owned by
Freightliner, a division of
DaimlerChrysler)
St. Thomas,
Ontario
A-line, Lline, Acterra
24,000**
Hino Motors Ltd. (division
of Toyota)
Woodstock,
Ontario
Class 4-7
trucks
2,000º
*STC Estimate (based on production of 71 trucks/day; 200 days/year)
**STC Estimate (based on production capacity of 120 trucks/day; 200 days/year)
ºPlant under construction for completion in 2006
17
BUS MANUFACTURING IS FRAGMENTED INTO SCHOOL BUSES,
URBAN TRANSIT BUSES AND COACH BUSES
Novabus
Plant
Models and
focus
Unit
production
volume
(2005)
Ltd.
Brantford, Ontario
School buses
12,000
St Lin-Laurentides,
Quebec
School buses
2,500
(MCI) International Inc
Winnipeg, Manitoba
Highway
(coach buses)
1,200
Orion Bus Corporation
(sub. of DaimlerChrysler)
Mississauga, Ontario
Urban transit
buses
1,000
Prévost Car Inc.
(subsidiary by Volvo Bus
Corporation)
Ste. Claire, Quebec
Highway
(coach buses)
600
Novabus (division of
Prévost, a subsidiary of
Volvo Bus Corporation)
St. Eustache,
Quebec
Urban transit
buses
Private
information
New Flyer Industries Ltd.
Winnipeg, Manitoba
Urban transit
buses
1,500
capacity*
A. Girardin Minibus Inc.
Drummondville,
Quebec
Mini school
buses
Private
information
Girardin Minibus
Michel Corbeil
Prévost
Orion
New Flyer Industries
Manufacturer
Canadian Bluebird
*Unit capacity does not reflect actual production numbers, which were not available.
Sources: 2006 APMA Directory, Company websites and contacts
18
CONSOLIDATION OF THE COMMERCIAL VEHICLE INDUSTRY AS
LARGE GLOBAL PLAYERS ACQUIRE DOMESTIC PLAYERS
Trends within the Canadian commercial vehicle industry
Demand
Demand
Growth
Growth

Increasing production of commercial vehicles the result of demand growth (2001-2005)

Globalization
Globalization //
Consolidation
Consolidation
Global manufacturers have entered the North American bus market through acquisition of
several domestic bus manufacturers

Pollution
Pollution
Regulation
Regulation
Commercial vehicle production growth rate has been much higher than for passenger vehicles*
Cyclical nature of truck market demand is expected to lead to some decline in 2007
Volvo AB brought Novabus and Prevost under the same ownership
Daimler-Chrysler acquired Orion Bus Industries along with other U.S. bus manufacturers
New generation of smog-free heavy trucks will begin introduction to the market in 2007

Increased costs and payload penalties will be associated with the new equipment
Negative impact on truck sales in 2007 expected to arise from a related “pre-buy” mentality
*Production of medium/heavy trucks grew 32.5% in 2004 and 26.3% in 2005, compared with -0.3% in 2004 and 1.6% in 2005 for passenger cars.
(Souce: Ward’s AutoInfoBank)
19
CONTENT

Commercial vehicles

Suppliers

Recommendations

References

Appendices
20
THERE ARE OVER 900 AUTOMOTIVE SUPPLIERS IN CANADA
- Magna International is the world’s 9th largest auto parts supplier
Geographical concentration of
automotive suppliers
Canadian automotive suppliers

There are 900+ auto parts suppliers in Canada
(T1 and T2)

Ontario-based Magna International is one of the
top 10 largest automotive suppliers in the world

There is a very high concentration of automotive
suppliers in Southwestern Ontario

Many of the companies have less than 500
employees, including subsidiaries of foreignbased companies

Canada is a world leader in:

Concentration:
Injection and blow molding
Hydroforming
Ferrous and non-ferrous casting
Powder metal coating and facbrication
Systems and component integration
Stamping
Sources: Ontario government; Statistics Can; Industry Canada
High
Medium
Low
21
Automotive suppliers are highly
concentrated in Southwestern
Ontario, where all of Canada’s vehicle
manufacturers are located!
MAGNA INTERNATIONAL IS CANADA’S LARGEST AUTO PARTS
SUPPLIER
T1
T1 SUPPLIERS
SUPPLIERS
Electrical
Electrical systems
systems
Interior
Interior equipment
equipment
Propulsion
Propulsion
Body
Body
Power train, exhaust
Cables, sensors, semi
Body, roof, glass, doors,
Cockpit, seats, dashsystems, engines
lighting etc.
conductors, control units board, air conditioning
Magna International
Magna International
Magna International
Magna International
Siemens VDO
ABC Group
Linamar Corp.
Linamar Corp.
Automotive
Spectra Premium
Dana Canada
ABC Group
Industries
Affinia Brake Parts
Siemens VDO
Flex-N-Gate
Automotive
Solectron Invotronics
Woodbridge Group
Dana Canada
Omron Dualtec
Lear Canada
Wescast Industries
ThyssenKrupp
Automotive
Denso Mfg. Canada
Arvin Meritor
Spectra Premium
Electronics Inc.
Canada
Industries
Tenneco
Woodbridge Group
Automotive
22
Running
Running gear
gear
Suspension, brakes,
axles, steering, tires
Magna International
Linamar Corp.
TRW Canada
ThyssenKrupp
Arvin Meritor
Canada
Tenneco
Automotive
Affinia Brake Parts
MOST MAJOR T1 SUPPLIERS MAKE PURCHASE DECISIONS IN ONTARIO
T1 Suppliers
Manufacturer
Employees
Business
Location
Magna International
22,000
Stamping, interior/exterior systems, trim, electrical/ electronic
systems and parts, powertrain components
HQ, Aurora, Ontario
Linamar Corporation
8,087*
Machined components and modules for engines, transmissions
and chassis
HQ, Guelph, Ontario
ABC group
4,000
Plastics, blow and injection molded for interior / exterior systems
HQ, Toronto, Ontario
Flex-N-Gate
3,482
Body moulding for exterior systems
13 mfg. locations in Ontario (decisions
made locally)
Dana Canada
3,000
Chassis components
St. Catharines, Ontario / Corporate
HQ, Farmington Hills, Michigan (U.S.)
TRW Canada
2,355
Steering, suspension components
St. Catharines, Ontario
Siemens VDO Automotive
1,900
Electronic/electrical controls, manifolds, fuel modules
4 plants in Southern Ontario
(decisions made locally)
Wescast Industries Inc.
1,900
Exhaust manifolds, powertrain components
HQ, Brantford, Ontario
ThyssenKrupp Budd Canada
1,900
Chassis component assemblies, bumper and light truck frames
HQ, Troy, Michigan
ThyssenKrupp Fabco
1,200
Metal stampings, tubular assemblies, weldments and systems
HQ, Windsor, Ontario
Spectra Premium Industries
1,115
Fuel tanks, radiators and air conditioners
HQ, Boucherville, Quebec
Woodbridge Group
1,000
Seating foam and other interior foam parts
HQ, Mississauga, Ontario
Tenneco Automotive
1,000
Steering and suspension components; emissions control
Cambridge, Ontario
* An additional 3,000 new jobs over the next 5 years was recently announced on May 12, 2006.
23
SOME OF THE KEY GLOBAL T1 SUPPLIERS HAVE SMALL- TO MEDIUMSIZED MANUFACTURING OPERATIONS IN CANADA
T1 Suppliers
Manufacturer
Employees
Business
Location
Affinia Canada Corp.
750
Electrical equipment components including connectors, ignition
systems, wiring components, and brake parts
Solectron Invotronics
750
Motion controls, electronic control modules, instrument clusters
and displays, actuators, telematics modules, driver interface
switches
Scarborough, Ontario
Lear Canada Ltd.
700
Seating and interior trim
Kitchener, Ontario
Omron Dualtec Automotive
Electronics Inc.
400
Switch/electrical control units (switch assemblies for power
seats/windows, instrument panels, moon roof limit switches,
other micro-switch based assemblies)
Oakville, Ontario
Arvin Meritor Canada
375
Brake system parts
Tilbury, Ontario
Denso Manufacturing
Canada, Inc.
300
Air conditioners
Guelph, Ontario
24
T1 SUPPLIERS ARE STRATEGICALLY LOCATED TO PROVIDE JUSTIN-TIME DELIVERY TO MAJOR ASSEMBLERS IN CANADA & THE U.S.
Flex-N-Gate
Southwestern Ontario
Magna
Linamar
Spectra
Solectron
Denso
Tenneco
Automotive
Lear
ThyssenKrupp
Budd
Siemens
Southern Ontario is at the
doorstep of Michigan State, the
2nd largest producer of light
vehicles in North America!
Wescast
Arvin Meritor
ThyssenKrupp Fabco
25
Woodbridge
Affinia
Brake Parts
Dana
Omron
Dualtec
TRW
ABC
SOME OF THE LARGER T2 SUPPLIERS ARE FOREIGN-OWNED
SUBSIDIARIES IN CANADA
T2
T2 SUPPLIERS
SUPPLIERS
Electrical
Electrical systems
systems
Cables, bus systems,
embedded systems
Magna International
ATS Automation
Tooling Sytems Inc.
Dupont Canada
3M Canada
Company
Tyco Electronics
Canada Ltd.
Interior
Interior equipment
equipment
Propulsion
Propulsion
Cockpit, seats, dash-board, Power train, exhaust
systems, engines
air conditioning
Dupont Canada
ATS Automation
Tooling Systems Inc.
Martinrea
International
Valiant Corp.
Stackpole Ltd.
Spectra Premium
Industries
Valiant Corp.
Van-Rob
Schaeffler Canada
Guelph Tool
Maxtech
Manufacturing
Bend All Automotive
Body
Body
Running
Running gear
gear
Body, roof, glass, doors,
lighting etc.
Dupont Canada
Waterville TG
AGS Automotive
Systems
ThyssenKrupp
Fabco
Spectra Premium
Industries
Techform Products
Suspension, brakes,
axles, steering, tires
ATS Automation
Tooling Sytems
Inc.
Martinrea
International
TRW Canada
Schaeffler Canada
ThyssenKrupp
Fabco
NOTE: In Canada, T1 and T2 terms refer to products/components rather than companies, as many of the key T1 suppliers are also T2 players.
26
PURCHASE DECISIONS OF KEY T2 SUPPLIERS ARE MADE LOCALLY
T2 Suppliers
Manufacturer
Employees
Business
Location
ATS Automation Tooling
Systems Inc.
4,100
Electrical/Electronic systems and components (starters, alternators,
instrument clusters, swithces, fuses and circuit breakers)
HQ, Cambridge, Ontario
Dupont Canada
3,300
Electronic products, fuel cell parts, liners, plastics, paint and coatings
Cdn. HQ, Mississauga, Ontario
Martinrea International
3,000
Fluid Handling Systems, hydroforming parts, metal fabrication, stamping
HQ, Vaughan, Ontario
TRW Canada
2,355
Steering, suspension components
St. Catharines, Ontario
3M Canada Company
2,050
Electrical and Electronic connectors and cables
Cdn. HQ, London, Ontario
Waterville TG
1,800
Body sealing systems (rubber weather stripping)
HQ, Waterville, Quebec
AGS Automotive Systems
1,750
Metal stampings, metal painting, control parts
HQ, Toronto, Ontario
Stackpole Ltd.
1,500
Powder metal parts for engines, transmissions
Valiant Corporation
1,400
Hyrdoforming and Tool & Mold components for interior/exterior
HQ, Windsor, Ontario
Schaeffler Canada Inc.
854
Deep groove ball bearings (transmission, wheels, axles)
Stratford, Ontario
Van-Rob Stampings Inc.
850
Stampings, welded and mechanical assemblies
Aurora, Ontario
Guelph Tool
750
Metal stampings
Guelph, Ontario
Bend All Automotive
700
Hose assemblies, wire products
HQ, Ayr, Ontario
Techform Products
700
Rods (door lock, torque)
HQ, Penetanguishene, Ontario
Maxtech Manufacturing
660
Metal products (screws, brake parts)
Waterloo, Ontario
Tyco Electronics Canada
330
Electrical/Electronic connectors, switches, circuit breakers
Markham, Ontario
27
AUTOMOTIVE SUPPLIERS ARE TAKING ON HIGHER LEVELS OF
RESPONSIBILITY IN R&D AND DESIGN
Trends within the Canadian Automotive supplier industry (T1 and T2)

Process of integration in the automotive parts industry apparent throughout North America

Consolidation
Consolidation

Growing
Growing
Delegation
Delegation of
of
Tasks
Tasks
Global
Global
“Localization”
“Localization”
Increasing delegation of responsibilities (R&D, design, assembly) from OEMs to suppliers

A few larger, more diversified companies are acquiring the smaller players and offering a
broader range of products (ie Magna, Linamar)
Number of firms in the North American automotive supply chain has declined from 30,000 to
8,000 over the past 15 years
Emergence of “Tier 0.5” suppliers (Magna) who assemble Tier 1-level products, essentially
assuming responsibilities that were once the domain of the OEM
Each tier looks to its suppliers to assume new responsibilities
Production has been shifting toward where the sales are made

Foreign suppliers are relocating to Canada*, with 100+ Japanese and European parts suppliers
in Canada and growing
Traditional local suppliers find it difficult to compete with non-unionized foreign suppliers that
have new facilities, low legacy costs, new technologies, and young well trained workers
*See Appendix 4 for overview of Canada’s attractive business environment.
28
CONTENT

Manufacturers

Suppliers

Recommendations

References

Appendices
29
CANADIAN CONSTRUCTION EQUIPMENT PRODUCTION TOTALED
SEK 11.6 BILLION IN 2003
Construction Equipment Shipments in Canada
SEK billion
35
30
25
20
15
10
5
0

Imports satisfy most of Canada’s demand for
construction equipment.

Canadian market is highly fragmented, with few
manufacturing plants across Canada.
Mainly small- to medium-sized companies
Most of larger manufacturers are foreign-owned

The United States is the largest exporter of
construction equipment to Canada (2005).

2001
2002
2003
2004
2005
U.S. accounts for 62% of Canada’s total imports,
followed by Japan (13.8%) and Sweden (4.6%).
Construction Equipment Manufacturing Shipments
Construction Equipment Exports
Construction Equipment Imports
Source: Statistics Canada (data on Construction Equipment Manufacturing Shipments not available for 2004 and 2005 as of yet)
30
HEAVY CONSTRUCTION EQUIPMENT IS MAINLY IMPORTED* –
DOMESTIC MANUFACTURING IS LIMITED TO SMALLER FIRMS**
CONSTRUCTION
CONSTRUCTION EQUIPMENT
EQUIPMENT
EARTH
EARTH MOVING
MOVING
(Est.
(Est. 5,700
5,700 vehicles)
vehicles)
Excavators, wheel loaders,
backhoe loaders, Skid steer
loaders, haulers
Key manufacturers:
Thomas Equipment
Komatsu
International
Canada Inc.
MINING
MINING
(Est.
(Est. 520
520 vehicles)
vehicles)
LIFTING
LIFTING
(Est.
(Est. 1100
1100 vehicles)
vehicles)
Wheel loaders, drills,
haulers
Mobile cranes, forklifts
Key manufacturers:
Mining
Technologies Int’l
Lovat Inc.
Sandvik
Boart Longyear Inc.
Breaker Technology
Key manufacturers:
Skyjack Inc.
Weldco-Beales Mfg.
Liftking Industries
Kaverit Steel and
Crane
ROAD
ROAD
(Est.
(Est. 1600
1600 vehicles)
vehicles)
Graders, asphalt pavers,
asphalt mixers
Key manufacturers:
Volvo Motor Graders
London Machinery Inc.
*Major manufacturers, such as Caterpillar and John Deere, operate their own dealerships in Canada and import all products.
**Each sub-sector has several small and locally-based players with under 100 employees.
31
MOST CONSTRUCTION EQUIPMENT PLANTS PRODUCE RELATIVELY
LOW VOLUMES & MAKE PURCHASE DECISIONS LOCALLY
Manufacturer
Employees
Models and focus
Plant
Production vol.
Purchase decisions
Skyjack Inc. (division of Linamar)
900
Scissor lifts
Guelph, Ontario
Private information
HQ, Guelph, Ontario
Volvo Motor Graders Limited
800
Motor Graders
Goderich, Ontario
1,500
Goderich plant, Ontario
Weldco-Beales Manufacturing Inc.
500
Truck-mounted cranes
Edmonton, Alberta
Private information*
HQ, Edmonton, Alberta
Mining Technologies International
480
Drills, loaders
Sudbury, Ontario
Not available
HQ, Sudbury, Ontario
Thomas Equipment
400
Mini skid steer
loaders
Centreville, New
Brunswick
4,000
Centreville plant, New Brunswick
Boart Longyear Inc.
400
Drilling equipment
North Bay, Ontario
250
Canadian HQ, North Bay, Ontario
Komatsu International Canada
Inc.
300
Small- and mediumsized wheel loaders
Candiac, Quebec
1,500
Partly HQ, Japan / Partly Candiac
plant, Quebec
Lovat Inc.
250
Tunnel boring
machines
Etobicoke, Ontario
Private information
HQ, Etobicoke, Ontario
Sandvik Mining and Construction
Canada Inc.
200
Loaders
Burlington, Ontario
100-150
Burlington plant, Ontario
Liftking Industries Inc.
150
Forklifts
Woodbridge, Ontario
60
HQ, Woodbridge, Ontario
Breaker Technology Ltd.
130
Loaders, breakers,
mining equipment
Thornbury, Ontario
Not available
HQ, Thornbury, Ontario
Kaverit Steel and Crane
125
Cranes
Edmonton, Alberta
300
HQ, Edmonton, Alberta
(sub. of OshKosh Truck Corp.)
120
Concrete Mixers
London, Ontario
Private information**
Corporate HQ, Oshkosh, Wisconsin
(U.S.) / Cdn. HQ, London, Ontario
*SEK657 million sales revenue (2005); **SEK355 million sales revenue (2005)
32
MANY OF THE LARGER MANUFACTURERS OF CONSTRUCTION
EQUIPMENT IN CANADA ARE LOCATED IN SOUTHERN ONTARIO
Mining Technologies Int’l
Boart Longyear
Thomas Equipment
Komatsu
Kaverit Steel & Crane
Weldco-Beales
Breaker Technology
Liftking Industries
Volvo Motor Graders
Skyjack Inc.
33
Sandvik
Lovat Inc.
CONTENT

Canadian Automotive industry

Manufacturers

Suppliers

Recommendations

References

Appendices
34
CONSTRUCTION EQUIPMENT MANUFACTURERS IN CANADA RELY
ON IMPORTS AND/OR SMALL, LOCALLY-BASED SUPPLIERS
SUPPLIERS
SUPPLIERS
Electrical
Electrical systems
systems
Cables, sensors, semi
conductors, control units
Propulsion
Propulsion and
and
running
gear
running gear
Power train, engines,
exhaust systems, axles
Steel
Steel construction
construction
Hydraulics
Hydraulics
Undercarriage and body All kind of hydraulic
cylinders
Bosch Rexworth
Gerdau Ameristeel
Canada Corp.
Manitoba Metal
Hyco Canada
Pullmaster Winch
Corp.
Accessories
Accessories
All kind of hydraulic
cylinders
Cascade Canada
Ltd.
Due to a lack of publicly available data / industry associations / company listings for construction equipment vehicle manufacturers
or their suppliers in Canada, it was not possible to provide more information for the purposes of this report. However, Canada has
a number of manufacturers of attachments and accessories for the construction equipment vehicle market, which are listed in
Appendix 5.
35
SMALL-SIZED CONSTRUCTION EQUIPMENT SUPPLIERS MAKE
PURCHASE DECISIONS LOCALLY
Suppliers
Manufacturer
Employees
Business
Purchasing
decisions
Gerdau Ameristeel
Manitoba Metal
500
Steel components manufacturer for
earthmoving and road vehicles
Selkirk, Manitoba
Bosch Rexworth Canada
Corporation
240
Hydraulic power units and manifolds for
construction equipment
Welland, Ontario
Cascade Canada Ltd.
200
Forklift accessory parts (hydraulic valves, stop
drop valves, clamps)
Guelph, Ontario
Hyco Canada
120
Hydraulic cylinders and valves for cranes,
material handling equipment and road vehicles
St. Wenceslas,
Quebec
Pullmaster Winch
Corporation
50
Hydraulic planetary winches and drives for
mining and earthmoving vehicles
Surrey, British
Columbia
36
SUPPLIERS OF CONSTRUCTION EQUIPMENT ARE WIDELY DISPERSED
IN CANADA
Hyco Canada
Pullmaster Winch
Gerdau Ameristeel
Manitoba
Cascade Canada
37
Bosch Rexworth
Canada
THE CONSTRUCTION EQUIPMENT SECTOR IS DOMINATED BY IMPORTS
- Increasing share of imports are coming from Sweden
Trends within the Canadian Construction Equipment industry

Demand
Demand
growth
growth
Canadian construction equipment market experienced rising demand from 2003-2005

Growing Canadian demand for construction equipment is increasingly met by imports

Import-based
Import-based

Market
Market
fragmentation
fragmentation
Strengthening of Canadian economy
Renewed growth in the industrial, commercial and institutional (ICI) construction sector,
especially in the oil and gas sectors (many new large-scale projects)
American manufacturers dominate imports of construction equipment to Canada
The number of major construction equipment manufacturing facilities in Canada is declining
Sweden has ranked as the 3rd largest exporter of heavy equipment into Canada since 2002
with 4.6% share in 2005 (USA had 61.6% and Japan 13.8% share of imports in 2005).
Construction equipment is a highly fragmented market with a diverse customer base

Larger global manufacturers like John Deere and Caterpillar dominate the Canadian
market, operating their own dealerships in Canada that import all products
Canadian manufacturers are small and tend to be specialized
38
CONTENT

Canadian Automotive industry

Manufacturers

Suppliers

Recommendations

References

Appendices
39
RECOMMENDATIONS FOR DOING BUSINESS WITH THE CANADIAN
AUTOMOTIVE INDUSTRY
Country specific
1.
1.
Consider Canada due to its similarities in geography, climate and business environment to that of Sweden
2.
2.
Benefit from geographic proximity to USA and a well-integrated market within North America. Use Canada as
a gateway to the larger U.S. market.
3.
3.
Invest in Canada, where the overall cost of doing business is the lowest among G7 Countries*
Industry specific
1.
1.
Utilize competitive advantages as a new foreign entrant over less efficient domestic automotive players that
have higher legacy costs, unionized work force, older facilities and technology, etc.
2.
2.
Establish a diverse customer base beyond “Big Three” and target growing foreign auto assemblers & suppliers
in Southern Ontario
3.
3.
Focus on opportunities in high-value design and engineering, as automakers increase outsourcing to suppliers
*Competitive Alternatives: KPMG’s Guide to International Business Costs, 2006 edition.
40
CONTENT

Manufacturers

Suppliers

Recommendations

References

Appendices
41
HOW CAN STC IN CANADA SUPPORT COMPANIES TO DO
BUSINESS IN CANADA
Country specific
Market
Market Check
Check
Distribution
Distribution
search
search
Customer
Customer
Aquisition
Aquisition
Pre
Pre
Aquisition
Aquisition
analysis
analysis
Supplier
Supplier
search
search
To investigate market dynamics, players, potential and competitiveness for Swedish firms
To scan the market for potential candidates and to narrow down the search into a few interesting and intereted
distributors / partners for a face to face meeting with Swedish firms
To assist with business development and sales before, during and after the market entry & establishment
To assist with identification of potential companies for acquisition in a confidential manner (without disclosing the
identity of the Swedish client at initial stage) and to help with background checks and legal matters
To assist with identification of potential suppliers based on a profile defined by Swedish clients
Company
Company
establishment
establishment
To assist with incorporation of a company, immigration and management transfer, site selection, staffing, opening
bank accounts and to provide referral to business service providers
Legal
Legal
To provide referral to reputable law firms or experienced lawyers with expertise on the subject matter, when
needed. Among examples are assistance with contracts/agreements, trademarks, patents, and incorporation.
42
CANADA IS AN ATTRACTIVE MARKET AND STC HAS HELPED
MANY SWEDISH COMPANIES TO ENTER OR ESTABLISH
WHY CANADA?

Ontario is an automotive powerhouse and at the door step “Big Three” and also home to other
Asian car makers

Sound economy and politically stable

Excellent infrastructure

Among most competitive countries to do business in G7 with 5.5% cost advantage over USA*

Talented and skilled workforce with the lowest labor cost among G7 countries*

No significant trade barrier for majority of products/services

Still within reach by phone during business hours to communicate with clients/partners

No significant cultural barrier compared to many other countries

The largest U.S. trading partner with more than $1billion trade / day!
*Competitive Alternatives: KPMG’s Guide to International Business Costs, 2006 edition.
43
CONTENT

Manufacturers

Suppliers

Recommendations

References

Appendices
44
APPENDIX 1: DEFINITIONS

Shipments (value of)

Light truck

Vehicle weighing from 14,001 to 26,000 lbs (or 6.35 to 11.79 tons)
Heavy-duty truck

Vehicle weighing less than 14,000 lbs (or 6.35 tons)
Medium-duty truck

Summation of value of shipments produced by establishment, receipts of custom and repair revenue.
Vehicle weighing from 26,001 to 33,001 lbs (or 11.79 to 14.97 tons). Also included off-highway trucks.
Truck class: In Canada, truck manufacturers also use a class system to designate trucks of
various gross vehicle weight ratings:

Class 1 and 2 vehicles: Less than 10,000 lbs. (or 4.54 tons)
Class 3, 4, and 5 vehicles: 10,001 to 19,500 lbs. (or 4.54 to 8.85 tons)
Class 6 vehicles: 19,501 to 26,000 lbs. (or 8.85 to 11.79 tons)
Class 7 vehicles: 26,001 to 33,000 lbs. (or 11.79 tons to 14.97 tons)
Class 8 vehicles are 33,001 lbs. (or 14.97 tons) or more.
Sources: http://strategis.ic.gc.ca/epic/internet/inauto-auto.nsf/en/h_am00614e.html#T and
http://www.tc.gc.ca/pol/en/report/TruckActivity/Chapter3.htm
45
APPENDIX 1: DEFINITIONS (continued)

Tier 1 Supplier

Tier 2 Supplier

Producer of parts providing value-added to minor sub-assembly.
Tier 3 Supplier

NOTE:
Manufacturer to the vehicle assemblers who are responsible for delivery of the finished assembly,
product development and continued technology renewal.
Supplier of engineered materials and special services, such as rolls of sheet steel, bars and heat
treating, surface treatments.
In Canada, T1 and T2 tend to define products/components rather than companies, with many of the key
suppliers considered both T1 and T2.
Source: http://strategis.ic.gc.ca/epic/internet/inauto-auto.nsf/en/h_am00614e.html#T
46
APPENDIX 2: CANADA’S POPULATION DENSITY (2001)
High population concentration
along Canada’s southern
border with the U.S., especially
in Southern Ontario & Quebec
Area: 9,984,670 km2
47
APPENDIX 3: NEW INVESTMENTS IN CANADA’S AUTOMOTIVE
ASSEMBLY SECTOR

Recent string of major investments contributes to favourable outlook of Canada’s automotive sector
Over SEK 46 billion in new auto investments in Ontario announced since 2004
Canada is consistently receiving 20% of new North American assembly investments
Government is highly proactive in investment promotion to automotive manufacturers, with SEK 6.6
billion in government aid since 2004
Ontario auto
investments
(2004-July
2006)
Company
Project value
Government aid
General Motors
SEK 16.4 billion
SEK 2.9 billion
Ford
SEK 7.2 billion
SEK 1.3 billion
Linamar
SEK 7.2 billion
SEK 292 million
Toyota
SEK 7.2 billion
SEK 820 million
DaimlerChrysler
SEK 5.0 billion
SEK 806 million
Navistar
SEK 1.8 billion
SEK 427 million
Honda
SEK 1.0 billion
SEK 99 million
Nemak
SEK 657 million
SEK 39 million
Toyota Boshoku (parts supplier)
SEK 427 million
Not available
Total
SEK 46.9 billion
SEK 6.7 billion
Source: Federal and Ontario governments
48
APPENDIX 4: CANADA’S BUSINESS ENVIRONMENT

Canada ranks second in the G7 as a low-cost investment location for the automotive sector.

Canada has an attractive business environment for foreign investment

Budget surplus and low inflation
Lowest interest and depreciation costs in the G7
Canada offers the lowest labour and benefit costs in the G7, with a nearly 12% advantage over the U.S.

Compared to the U.S., lower construction costs (-8%), lower office lease costs (-15%), lower transportation costs (28%), and lower energy costs.
Wages generally lower than most U.S. states
Canada is well-integrated into the U.S. transportation system
“Canada’s OE parts sector has always found it easy
to work with overseas-based parts suppliers.”
Dennis Desrosiers,
Desrosiers Automotive Consultants Inc.
Source: Competitive Alternatives: KPMG’s Guide to International Business Costs, 2006 edition
49
APPENDIX 5 (1/2): MANUFACTURERS OF CONSTRUCTION
EQUIPMENT ATTACHMENTS
Manufacturer
Employees
Business
Purchase decisions
Black Cat Blades Ltd.
380
Blades and other parts for earthmoving vehicles
Edmonton, Alberta
CWS-IMAC
360
Buckets, couplers, blades, and forks for
earthmoving and road vehicles
Surrey, British Columbia
Weldco-Beales Manufacturing
300
Attachments for earthmoving, lifting, and road
vehicles
Edmonton, Alberta
Lovat Inc.
250
Parts for underground vehicles
Etobicoke, Ontario
Sandvik Mining & Construction
Canada Inc.
200
Parts for underground loaders
Burlington plant, Ontario
Thiessen Equipment Ltd.
(subsidiary of Atlas Copco)
200
Rockbreaker equipment accessories
Langley, British Columbia
Breaker Technology, Inc.
130
Attachment for underground vehicles
Thornbury, Ontario
Pro Mac Manufacturing
80
Attachments for earthmoving vehicles and cranes
Duncan, British Columbia
Craig Manufacturing
75
Attachments for earthmoving and road vehicles
Hartland, New Brunswick
Valley Blades Ltd.
75
Blades for earthmoving and road vehicles
Waterloo, Ontario
Garier Inc.
50
Loader, excavator and forklift attachments
Mirabel, Quebec
Nye Manufacturing
35
Loader and excavator attachments
Construction equipment attachment manufacturers tend to be small, locally-based players in Canada
50
APPENDIX 5 (2/2): MAKERS OF CONSTRUCTION EQUIPMENT
ATTACHMENTS ARE LOCATED THROUGHOUT CANADA
Garier
CWS-IMAC
Pro-Mac
Craig
Thiessen Equipment
Black Cat Blades
Weldco-Beales
Breaker Technology
Lovat Inc.
Valley Blades
Sandvik
51
Nye Mfg.