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While the United States’ auto industry continues to do a stellar job rebounding, the rise of Canada’s dollar has automakers turning their backs on the plants in Canada.
Reports are coming in that investment in Canada’s auto plants may fall to just $1.2 billion this year, the lowest since the mid-1980s. It’s also 62-percent lower than the past decade’s average according to Bank of Nova Scotia, which means Canada will continue to lag behind. To compare, Ford is planning to invest $13.3 billion in US plants over the next four years, leaving very little funding left for Canada’s plants. In fact, Ford this year closed their St. Thomas Assembly Plant in Ontario that had made their Crown Victoria and Lincoln Town Car.
This is a vast change of events compared to 2003, when Ontario, Canada was the largest North American producer of vehicles – taking the spot from the state of Michigan. But now their surging currency and companies in the US cutting labor costs has shifted investment back to the States.
Another factor impacting the spending is the fact that the US has a new labor agreement with the United Auto Workers (UAW), helping level the labor costs compared to foreign rivals. The Canadian Auto Workers (CAW) however are working with the automakers for a new contract for 2012. Unfortunately though, the CAW has fought many of the cost cuts the UAW has accepted.
[Source: Automotive News]
Ford Canada has decided to expand its “Recycle Your Ride” Incentive to include all 2003 model-year and older vehicles. Previously, the incentive had only applied to 1995 or older vehicles.
The offer changes depending on the vehicle being purchased with $1,000 CAD being offered towards a car or compact truck, $2,000 toward a full-sized sedan or SUV and $3,000 towards a full sized truck or Lincoln model. Absent is any mention of Mercury, as Ford cut the Mercury brand from its lineup in Canada sever years ago.
The Recycle Your Ride program is in addition to a Federal Government program, that offers a laughable $300 or anyone who turns in a vehicle that is at least 15 years old.
Ford says that since the original Recycle Your Ride incentive began back in September, it has taken in 6,000 vehicles.
Reason for the changed to Ford Canada’s incentive program are likely due to the increased value of the Canadian dollar, as Ford (like all automakers in Canada) struggles to find ways to keep Canadians buying cars in Canada, rather than importing significantly cheaper vehicles from the U.S.
[Source: Automotive News]
Ford Canada is asking the Canadian government to put in place a vehicle scrappage plan like the one currently in effect in Germany.
Ford Canada CEO David Mondragon told a parliamentary committee that Ford isn’t looking for a bailout and instead suggested a plan that would include $350 million ($270 million U.S.) for a scrappage plan. The way the plan would work would be for the government to give cash incentives for people who trade in their old cars and purchase new ones.
Mondragon’s suggested solution would include an incentive value of $3,500 ($2,700 U.S.), for consumers to use against the price of a new car when they traded in their old one. The deal would apply to any car 11-years-old or older.
With 35 percent of cars on Canadian roads over 11-years-old, this could account for as many as 100,000 car sales.
In Germany, the rule applies to cars 9-years-old or older and so far has been a resounding success. While February sales in the U.S. continued to tumble, car sales in Germany for the month were actually up 21 percent over the same period the year before.
[Source: The Globe and Mail]