Why ICE is Still Hot!

In this month’s observation’s Dennis speaks about the various reports from government sources which state that millions of Canadians will be driving a non-conventional internal combustion engine (ICE) vehicle by 2030. Quebec is implementing a zero emission mandate and some other provinces are encouraging consumers to move away from ICE vehicles.

To date Canadians have not embraced electric and hybrid vehicles in the market place. Dennis states that ICE vehicles have made huge strides towards fuel economy combined with improvement in a number of different vehicle technologies. For example, reduced vehicle weight through advanced materials and design is of critical importance for both electric and ICE vehicles.

The face of automobiles will continue to evolve over the next 25 to 35 years as the industry is expected to continue with further advancements in new vehicle technology.

Original Equipment Parts Outlook

The original equipment parts sector plays a vital role in the Canadian automotive industry from all perspectives, be it employment, shipments or technological innovation. However, coverage and analysis of this segment tends to be fairly limited and niche specific compared to the more visible new vehicle sales and vehicle assembly side of the market.

In an attempt to illuminate the ever-important parts sector this month’s Observations will focus on automotive parts and the outlook for this side of the industry at a North American level.  Discussion will focus on the recovery of the industry in recent years, increased parts content per vehicle, and the implications of the current Canadian labour negotiations for the parts industry’s outlook.

Pent-up, Incremental and Replacement Demand

In the past we have touched on the demand aspect of the automotive industry. With recent discussions surrounding disruptors and how they may threaten the sector, some have questioned the effects of disruptors on the outlook of sales.

In this month’s Observations we will look at the three concepts that drive sales of new vehicles: Pent-up demand, incremental demand and replacement demand. The main topic of discussion will revolve around these concepts and how the disruptors interact with them in our industry.

Disruptors To The Automotive Industry

A common theme found in recent articles relating to the automotive industry is that that there are “disruptors” (fundamental technologies/trends that are expected to change the nature of the industry) arising that will permanently reshape the automotive market as we know it.

In this month’s Observations we will take a deep dive on the most popular “disruptors” brought to our attention and address each and their potential effect on the automotive industry. Topics of discussion include: Lack of vehicle ownership by younger age groups, ride-sharing, hybrids, EVs and autonomous vehicles.

Market Outlook

Almost every month during the last couple of years has set a record of some sort. Two questions come to mind when looking back at our industry’s recent history: First, what caused this? Secondly and perhaps more importantly, can it continue?

In this month’s Observations we will look at the current phenomenon of record new light vehicle sales, discuss the reasons behind it and look towards the future. Topics of discussion include replacement demand, the environment surrounding the industry and the “churn” rate of vehicles (the percentage of vehicles on the road that are replaced each year).

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