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The Voice of the Automotive Original Equipment Suppliers in Canada since 1952. Automotive Parts Manufacturers’ Association. Presentation to: Society of Automotive Engineers World Congress International Business Spotlight on Canada March 5, 2003 Cobo Hall Detroit, Michigan. Who are we?.

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The Voice of the Automotive Original Equipment Suppliers in Canada since 1952

Automotive Parts

Manufacturers’ Association

Presentation to:

Society of Automotive Engineers

World Congress

International Business Spotlight on Canada

March 5, 2003

Cobo Hall

Detroit, Michigan


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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)


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Mission Statement

To 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


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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


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CanadianVehicle Production 1992 - 2002


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List of Canadian Vehicle Assembly Plants from East to West

Type of No. of

ManufacturerLocationProductAssembly Lines

GM Oshawa, Ont. Truck & Auto 3

Ford Oakville, Ont. Truck & Mini Van 2

Honda Alliston, Ont. Auto, Mini Van & SUV 2

DaimlerChrysler Brampton, Ont. Auto 1

Toyota Cambridge, Ont. Auto & SUV 2

CAMI (Suzuki/GM) Ingersoll, Ont. Auto & SUV 1

Ford St. Thomas, Ont. Auto 1

DaimlerChrysler Windsor, Ont. Van & Mini Van 2

Total 14


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Canadian Assembly Plants Locations

Oshawa

Brampton

Alliston

Oakville

Cambridge

Ingersoll

Windsor

St. Thomas


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Hours per Vehicle

Flint

33.2

Pontiac East

24.4

GM full-size

pickups

Fort Wayne

22.4

Oshawa

21.0

St. Louis

31.9

DaimlerChrysler minivans

Windsor

29.8

NUMMI

23.1

Toyota Corolla

Cambridge

19.8

Harbour

Report

2002

“Our records for safety and productivity place the TMMC

team among the industry’s best. And when it comes to

quality, vehicles built at our Cambridge facility are among

the highest rated vehicles in North America.”

Takanori (Tak) Sakaue, past President

Toyota Motor Manufacturing Canada Inc.

U.S.

Canada

Canada = Overall Superior Manufacturing Efficiency


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  • Toyota Cambridge

  • Gold - 1991, 1995, 1996, 2001

  • Silver - 1992

  • Bronze - 1993, 2000

  • Honda Canada Alliston

  • Silver - 1996

  • General Motors (Car) Oshawa

  • Gold - 2002

  • General Motors (Truck) Oshawa

  • Bronze - 1999

  • Ford plant St.Thomas

  • Gold - 1998

  • Silver - 1994

…in an environment of exceptional quality performance.

Canada’s quality of output is also top rated.

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.




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“ Canadian Auto Parts Share of North American Production has grown from 11% in 1991 to 17 % in 2001”

Carlos Gomas

Bank of Nova Scotia


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Sales by APMA Members has grown from 11% in 1991 to 17 % in 2001”(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


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Automotive Tier One OE Supplier Qualities has grown from 11% in 1991 to 17 % in 2001”

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


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But the assemblers continue to restructure, and this brings new opportunities for global players…

  • 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


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In addition to the business opportunities, one might new opportunities for global players…

still 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


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Very important is government support new opportunities for global players…

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


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Relative Competitiveness of new opportunities for global players…

R&D Tax System

After-tax cost of $1 R&D expenditure

Quebec

Ontario

N. Carolina

Illinois

Ohio

Michigan

0.40

0.45

0.50

0.55

0.60

Automotive education and training infrastructure that includes technical colleges, trade schools and universities.

Source: Conference Board of Canada, 1999

Additional government support through programs and research organizations.

Canada offers real advantages for automotive R&D..

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.


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Government support for development of Canada’s new opportunities for global players…

intellectual capability cont’d...

  • co-operative links to national labs, universities, colleges

  • New last week- Ontario government will allocate US $ 330 million to automotive R & D


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The new opportunities for global players…Voice of the Automotive Original Equipment Suppliers in Canada

Gerry Fedchun

[email protected]

(416) 620-4220 ext. 228

www.apma.ca


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