Canadian Automotive Sector Overview

2010

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Auto industry is a key driver of Canada’s economy:

– The largest manufacturing sector in Canada, contributing to 10% of manufacturing GDP and 11% of total merchandise exports.

– 109,111 direct employment in auto sector manufacturing; a further 332,975 in aftermarket, and dealerships.

– Produced 1.4 million units vehicles; domestic sales were 1.5 million units.

Automotive sector also creates significant demand for other industries:

– 37% of steel foundry production– 17% of rubber production– 14% of processed aluminum– 13% of wire goods– 9% of carpeting and fabric– 8% of glass

Level

(2009)

Share of Total Manufacturing

Share of Total

Economy

GDP $ 14.6 B 10% 1.2 %

Manufacturing Shipments

$ 56.8 B 12% n/a

Investment $ 2.9 B 18% 1 %

Exports $ 39.2 B 17 % 11 %

Manufacturing Employment

109 111 7 % 1 %

The Automotive Industry is a crucial economic driver

Passenger Vehicle

Assembly

Heavy Duty

Vehicle

Assembly

Motor Vehicle Parts

Production

Truck Body & Trailer

Production

Employment 35 615 61 193 12 304

Number of Establishments

55 41 944 237

Production (Units) 1 479 161 11 321 na na

Shipments ($ Billions)

$35.1 $19.1 $2.6

Exports ($ billions) $26.7 $1.4 $10.2 $0.9

Export Ratio (% of shipments)

81% 72% 53% 35%

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Assembly plants: Toyota 2 plants in Cambridge 1 plant in Woodstock

Honda 2 plants in Aliston

General Motors 2 plants in Oshawa1 plant in Ingersoll

Chrysler 1 plant in Brampton 1 plant in Windsor

Ford1 plant in Oakville

1 plant in St. Thomas

Canada has five major light vehicle assemblers

Chrysler

Source: Ward’sAuto, CSM Forecasting

GM

Ford

Honda

Toyota

Canadian light vehicle production shares by manufacturer

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

2000 2002 2004 2006 2008 2010(f)2012(f)2014(f)2016(f)

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Exceptional Canadian Quality

J.D. Power Plant Quality Awards

1991 Toyota Cambridge (Gold)

1992 Toyota Cambridge (Silver)

1993 Toyota Cambridge (Bronze)

1994 Ford St. Thomas (Silver)

1995 Toyota Cambridge (Gold)

1996Toyota Cambridge (Gold), Honda Alliston

(Silver)

1998 Ford St. Thomas (Gold)

1999 GM Oshawa 1 (Bronze)

2000 Toyota Cambridge (Bronze)

2001 Toyota Cambridge (Gold)

2002 GM Oshawa 2 (Gold)

2003 GM Oshawa 1 (Gold)

2005 GM Oshawa 2 (Gold), GM Oshawa 1 (Silver)

2006 GM Oshawa 2 (Gold), Chrysler Windsor (Silver)

2007 GM Oshawa 2 (Silver)

2009 GM Oshawa Car (Silver)

Canadian assembly plants have wonabout one-third (30%) of all J.D. Power plant quality awards for North America,which is about double the Canadianshare of regional production (16%)since 1996.

The only Toyota plant outside Japan toproduce Lexus vehicles is in Canada.

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In 2009, the Canadian auto parts sector:

Had shipments $19 billion and almost61,000 workers.

Over 1000 establishments, 78% with less than 200 employees

Representation throughout Canada, including:

– Metal stamping and electronic equipment manufacturers in Western Canada.

– Seats and interior trim manufacturers in Eastern Canada.

– Transmission and power train parts manufacturers in Central Canada.

For every assembly plant opened in N.A., 19 direct suppliers open up within 60 miles of the plant.

Each auto assembly job creates 4.9 indirect jobs e.g. rubber, plastics, fabricated metals and steel products.

Dealers and aftermarket collectively employ more than 333,000 people.

Canadian auto supply chain - a national industry

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The Canadian market represents only 12% (1.5 million) of N.A. vehicle sales but is responsible for 17% (1.4 million) of N.A. production in 2009.

Canada exports 81% of vehicle production and 53% of parts in 2009:­ Of these exports 99% of vehicles

and 94% of parts destined for the U.S.

Assembly plants and major parts companies are clustered in southern Ontario to allow an easy and efficient integration of supply chains.

Canada’s automotive sector is fully integrated in N.A.

Integration of Canada – U.S. Supply Chain: Rear Suspension Assembly by Martinrea

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Vehicle demand varies in different markets

Vehicle demand in global market varies due to consumer preference, regulatory requirement, commodity/oil prices, and market structure.

Relatively high demand in broad-based C- and D-segment in North America, while emerging markets like China, Central and Eastern Europe focus on smaller size vehicles like B- and C-segment.

Global production growth on B,C and D-segment is expected to be high in the future.

0

5

10

15

20

25

30Millions

1997 2002 2007 2009 2011 2015

A B C D E F

Global Production by Segment(1997-2015)

Source: CSM Worldwide Global Outlook, 2009

D23%

FF7%

E6%

C34%

B18%

A12%

Global Production Growth by Segment(2009-2015)

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U.S. has a unique demand on vehicles due to its geographic remote, safety and fuel regulations, and sophisticated market structure:

– According to recent survey, value and safety are the most important considerations to final purchase decision for US consumers.

Due to the new fuel efficiency regulations, high energy prices, and shifting consumer preference, OEMs are expected to adjust production:

– Small-sized vehicle (A-segment) sourcing to low-cost jurisdictions

– Small to Medium-sized (B-segment) volume surges next decade

– Medium-sized to luxury vehicles (C, D-segments) reach critical mass

– Large to full-frame vehicle (E, F- segment) production is expected to drop

North America is expected to be an attractive market in the long run

NA Vehicle Demand by Segment, 2011-2015

Data Source: CSM Worldwide

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Canadian Automotive R&D Centres

Ford Motor Company of Canada Ltd.• Ford Manitoba Extreme Cold Weather Test Facility (Thompson MB)• Ford Powertrain Engineering Research & Development Centre (Windsor ON)• Ford Centre for Excellence in Manufacturing (Windsor ON)

Chrysler Canada Inc.• Automotive Research & Development Centre (Windsor ON)

General Motors of Canada Ltd.• GM Canadian Regional Engineering Centre (Oshawa ON)• GM Cold Weather Development Centre (Kapuskasing ON)• UOIT Automotive Centre of Excellence (Oshawa ON)

Navistar / International Truck and Engine Corporation• ITEC Center for Innovation (Windsor ON)

Honda R&D Americas Inc. (Canada)• Environmental testing laboratory (Dartmouth NS)

Toyota Canada Inc.• Toyota Canada Cold Research Centre (Timmins ON)

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Vehicles Made in Canada 2010

Acura CSX Acura MDX Chevrolet Camaro Chevrolet Equinox

Chevrolet Impala Chrysler 300 Dodge Charger

Ford Crown Victoria

Lexus RX 350Honda Civic Coupe

Chrysler Town & Country Dodge Challenger

Dodge Grand Caravan Ford Edge Ford Flex

Honda Civic Sedan Lincoln MKT

Lincoln Town Car Mercury Grand Marquis Toyota Corolla Toyota Matrix Toyota RAV4 VW Routan

GMC Terrain

Acura ZDX

Lincoln MKX

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