CANADIAN AUTOMAKERS EXPECTED TO LOSE MORE THAN $2 BILLION IN 2009

Ottawa — Canadian automakers will lose more than $2 billion for the second consecutive year in 2009, and profitability for the industry is at least three years away, according to the Conference Board’s Canadian Industrial Outlook: Canada’s Motor Vehicle Manufacturing Industry – Spring 2009.

“Automakers are bracing for more difficult months ahead and 2009 will be one of the most challenging years for the industry,” said Sabrina Browarski, Economist. “After losing $2.7 billion in 2008, the industry is expected to shed another $2.1 billion this year, and it is forecast to remain in the red until at least 2011.”

Falling U.S. consumer demand drove Canadian production down by 21 per cent last year. A further 36 per cent drop is forecast in 2009, bringing production back to 1992 levels. An estimated 13,400 auto assembly jobs are forecast to be eliminated in 2009. In all, total industry costs this year will decline by 33 per cent.

The medium-term outlook is based on the assumption that General Motors will survive and the restructuring of Chrysler will be successfully completed under a stable partnership with Fiat. If the restructuring is successful and U.S. demand for automobiles rebounds, the Canadian industry could eke out a profit in 2012. By 2013, profit margins are forecast to return to early 2000s levels.