Presentation to: Society of Automotive Engineers World Congress International Business Spotlight on Canada March 5, 2003 Cobo Hall Detroit, Michigan Automotive Parts Manufacturers’ Association The Voice of the Automotive Original Equipment Suppliers in Canada since 1952
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Presentation to:Society of Automotive Engineers
World CongressInternational Business Spotlight on Canada
March 5, 2003Cobo Hall
Detroit, Michigan
Automotive Parts Manufacturers’ Association
The Voice of the Automotive Original Equipment Suppliers
in Canada since 1952
Who are we?• Since 1952 APMA has been Canada’s national
association representing OEM producers of parts, equipment, tools, supplies and services for the worldwide automotive industry.
• APMA members and their subsidiaries collectively account for over 90% of the US $22 billion automotive parts industry production in Canada. (2001)
Mission StatementTo engage in activities that promote the interests of automotive original equipment suppliers in Canada
that enhance the economic welfare of our members and
be the Voice of the Canadian automotive original equipment suppliers
Objective• Create and execute global marketing
initiatives to develop international trade and business opportunities for APMA’s members by developing working relationships with industry counterparts to promote the exchange of market information and strategic alliances
Type of No. of Manufacturer Location Product Assembly Lines
Type of No. of Manufacturer Location Product Assembly Lines
List of Canadian Vehicle Assembly Plants from East to West
GM Oshawa, Ont. Truck & Auto 3Ford Oakville, Ont. Truck & Mini Van 2Honda Alliston, Ont. Auto, Mini Van & SUV 2DaimlerChrysler Brampton, Ont. Auto 1Toyota Cambridge, Ont. Auto & SUV 2CAMI (Suzuki/GM) Ingersoll, Ont. Auto & SUV 1Ford St. Thomas, Ont. Auto 1DaimlerChrysler Windsor, Ont. Van & Mini Van 2
Canadian Assembly Plants Locations
Oshawa
OakvilleBrampton
AllistonCambridge
Windsor St. Thomas
Ingersoll
Takanori (Tak) Sakaue, past PresidentToyota Motor Manufacturing Canada Inc.
“Our records for safety and productivity place the TMMCteam among the industry’s best. And when it comes to quality, vehicles built at our Cambridge facility are amongthe highest rated vehicles in North America.”
Hours per Vehicle
U.S.
Canada
19.8
29.8
21.0
23.1
31.9
22.4
24.4
33.2
Toyota Corolla
DaimlerChrysler minivans
GM full-sizepickups
Windsor
St. Louis
Oshawa
Fort Wayne
Pontiac East
Flint
NUMMI
Cambridge
HarbourHarbour ReportReport
20022002
Canada = Overall Superior Manufacturing Efficiency
…in an environment of exceptional quality performance.
With 16% of total North American assembly, Canada’s plants have won 33% (12 out of 36) of the awards given by the independent J.D. Power & Associates.
“ Canadian Auto Parts Share of North American Production has grown from 11% in 1991 to 17 % in 2001”
Carlos GomasBank of Nova Scotia
Sales by APMA Members(as of 2003; $US)
Annual Sale of Automotive Products
$0-7 million
$7-14 million
$14-34 million
$34-67 million
$67-167 million
$167-334 million
$334-670 million
$670 million +
Number of Members
67
16
20
16
14
12
1
3
Automotive Tier One OE Supplier Qualities
1) full service engineering support
2) product development
3) global capabilities
4) modular and systems sourcing
5) warranty assumption
6) tough target costing
7) continuous improvements everywhere
8) lean manufacturing capability
• Increased globalization and competition are forcing new realities:- Cost reductions- Tiering- Downloading/outsourcing responsibility for design, sub-assembly- Consolidation- Globalization of vehicle platforms- Modularization of parts systems- Standardization of components- Strategic alliances
But the assemblers continue to restructure, and this brings new opportunities for global players…
In addition to the business opportunities, one mightstill ask, “Why Consider Canada?”
• Canada’s cost advantages of doing business:
- 15% lower overall costs compared to USA (KPMG Study)
- lower corporate taxes
- higher productivity, quality
- full access to North American markets
- business climate: tax regime, innovation policy, programs
Very important is government support for development of Canada’s intellectual capability…
• Canada’s approach to technology:
- becoming global “Intellectual Centre for automotive Research, Design, Development and Testing”
- US $700 million in auto-related R&D investment over last few years
Canada offers real advantages for automotive R&D..
Quebec
Ontario
Source: Conference Board of Canada, 1999
After-tax cost of $1 R&D expenditure
Illinois
Ohio
Michigan
0.40 0.45 0.50 0.55 0.60
N. Carolina
Relative Competitiveness ofR&D Tax System
Additional government support through programs and research organizations.
Automotive education and training infrastructure that includes technical colleges, trade schools and universities.
Canada offers the most favorable tax treatment for R&D among the G-7:
- Combined federal/provincial tax credits reduce the after-tax cost of $100 of R&D expenditures to as low as $44.
-co-operative links to national labs, universities, colleges
-New last week- Ontario government will allocate US $ 330 million to automotive R & D
Government support for development of Canada’s intellectual capability cont’d...