Safety Values

The two primary challenges that any vehicle company faces in a given year involves either selling more product and gaining more market share or handling miss-matches in the market. While some trends are reasonably predictable no forecast is perfect. As a result OEMs have developed tools to combat slow moving product sitting in inventory.

In this month’s Observations Dennis talks about “safety valves” which are tools that OEMs use to help sell product that do not sell as well as expected. Topics of discussion include consumer oriented incentives, dealer focused incentives and the dangers of pushing for higher sales numbers at the expense of the consumer.

The Unifor Labour Agreements

Automotive manufacturing and investments in the manufacturing industry present in Ontario continue to be important issues as the trend for manufacturing seems to move further and further away in recent years.

Speaking on the recent labour agreement between General Motors, FCA and Unifor, Dennis illuminates the environment going into the negotiations, the concerns and thought processes of each party involved, and the results and implications of this agreement in this month’s Observations.

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.

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