Canadian auto production up more than expected ? Wheels Talk

Michael Hatch, CADA
By Michael Hatch,
Special to Wheelstalk.com -
So far in 2012, the Canadian retail auto sector has been treated to solid double-digit sales growth as supply lines recovered from the 2011 tsunami and as previously penny-pinching consumers reacquainted themselves with the habit of opening their wallets. The combination of a number of positive factors has seen total sales increase this year by a degree most (me included) had not predicted even six months ago.
As the sales have jumped, so has production. It bears reminding that for every car that is sold off a dealer?s lot, one must be cranked off the manufacturer?s line.
In the first half of 2012, total Canadian automotive production was up a very impressive 18.9 per cent over the same period in 2011.
Destined as they are (for the most part, anyway) for American dealers and consumers, Canadian-produced cars and the increase we?ve seen in them so far this year represent more of the U.S. recovery than what?s taking place north of the border.
Having lost 40 per cent of their retail market in the carnage of 2008 and 2009, the boost in demand now taking place in the United States is outpacing even the very solid sales growth we?ve seen so far in Canada this year. The farther they fall, the higher they bounce.
However despite the context of the continental market in which the auto sector operates in North America, Canadian sales and production increases in 2012 are two sides of the same coin.
As in America, Canadian consumers are responding to record-high affordability and competition in the marketplace. The very forces that give dealers and their manufacturing partners ulcers allow consumers to take advantage of the best deals the market has seen in a generation or more.
The huge jump in production ? and the job gains that go with it ? that has occurred in Canada so far in 2012 may reflect mostly American demand. But it also demonstrates forces that are bringing the Canadian retail market back to health.
Michael Hatch is the Chief Economist with the Canadian Automobile Dealers Association: www.cada.ca
Source: http://www.wheelstalk.com/2012/opinion/canadian-auto-production-up-more-than-expected/
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