Gasoline fuels Canadian spending growth

Summary

Simply going to keep it short. Last year Canadians spent $413.4 billion on goods and services up 5.8 % over 2006. Fore every $100 spent n retail stores in 2007, consumers spent about:

- $21 on food and beverages;

- $21 on motor vehicles, parts and services;

- $10 on automotive fuels, oils and additives;

- $9 on furniture, home furnishings and electronics;

- $9 on health and personal care;

- $8 on clothing, footwear and

accessories;

- $7 on hardware, lawn and garden products;

- $3 on sporting and leisure goods,

- $2 on non-electronic housewares; and

- $9 on all other goods and services such as tobacco and pet food.

Thoughts

My blogs are about automotive cluster and auto growths, however this article is very striking  because Canadians spent 21% on automotive parts and services on par with food and beverage, this comes to show how strong and important the automotive sector is to our economy especially Ontarios.

http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=4db7472b-3747-4f6b-b2de-20997cd23e70

Auto dealers fail to capitalize on boom

Summary

Vehicle Sales – Canada’s new car dealers are dwindling in number despite the country’s booming market for vehicles — and they are making a lot less than they used to, a study says.

The total net profits earned by Canadian dealers has plunged by half a billion dollars from a $1.6-billion peak in 2004, to $1.1 billion last year, according to DesRosiers Automotive Consultants Inc.

Net profit per vehicle sold also has dropped by about a third, to $445 in 2007, from $635 at its peak a few years ago, DesRosiers says in a report sent to clients this week.

Thoughts

I am surprised by the numbers. many small dealers are now bought over by bigger dealers and thats why small dealers are diminishing.

http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=ed5dc43f-6b0f-4581-b6b5-08bad74b1569

DesRosiers hikes auto sales forecast after healthy Q1

Summary

This is an interesting article which compares and contrasts Canadian auto sales and American Auto sales.

American auto sales for this year is forecasted at 14.9 million vehicles lowest since 1997, as for Canada forecasted upward of 1.65million. Canada is creating fair number of jobs due to increase in exports of oil,minerals and metals from west while US is shedding jobs. Best selling models in US is now being sold in Canada to pick up the sales. The strong dollar is also one of the main reasons why the auto sales in the north is steadily climbing.

Thoughts

Go Canada Go!!!!! surprising results but then again not at all surprised. The strange twist US slump is actually helping our economy is incredible. Our economy would have been in turmoil if it wasnt for the West Coast who is leading major growths which is reflecting through out the nation

http://www.theglobeandmail.com/servlet/story/LAC.20080409.RAUTOS09/TPStory/Business

UOIT receives in-kind contributions worth millions of dollars from Partners for the Advancement of Collaborative Engineering Education

Summary

UOIT received millions of dollars in grants by Partners for the Advancement of Collaborative Engineering Education (PACE), a partnership including General Motors, EDS, Hewlett-Packard (HP), Siemens PLM Software and Sun Microsystems.”The automotive industry is undergoing an exciting transformation where innovation and R&D will be a core advantage,” said Greg Parker, Engineering Manager, General Motors of Canada. “Investing in future automotive engineers is critical to ensure that our next generation of employees has the skills and knowledge to compete globally.” Pace supports UOIT’s GM of Canada Automotive centre for excellence announced last month, creating a new advanced automotive technology cluster centered at UOIT that links together the best Canadian companies, universities, students and engineers with companies in the Canadian automotive supply chain.

Thoughts

This is definately great news for UOIT considered the underdog university, the grant will help their automotive program and ensures Durham region as one of the best regions to develop automobiles

http://www.newswire.ca/en/releases/archive/March2008/27/c7762.html

CAW tries for early auto talks

Buzz Hargrove doubts union will get head start on difficult bargaining

http://www.thestar.com/Business/article/412684

Summary

CAW – Canadian Auto Workers union is set negotiate contract terms which is set to expire mid September. The agreement covers more than 31000 members at the Big Three auto giants. In the past miscommunication by GM caused a 21 day strike in 1996 and GM is in no mood to repeat that incident. However GM is under pressure from Wall Street analyst who believes CAW union is willing to bend for a concession, CAW warned GM not to underestimate them. United Auto Worker (UAW in States) have agreed lower wage cuts which gives the auto companies a competitive advantage. However CAW argues that productivity is much higher in  Canada and lower health care costs. CAW have not yet stated a strike deadline but negotiations are under way.

Thoughts

The auto industry is in a turmoil, CAW should accept a concession its better than losing their jobs. Their demands are too high and it will cost the big three automakers billions.  CAW should follow UAW’s lead

Thestar News today; “Auto products drive retail sales”

THE CANADIAN PRESS

OTTAWA – Canadians’ dependence on their automobiles was exacting an ever-increasing cost in 2007 as retailers had a strong year with sales increases in all major commodity groupings.

Statistics Canada is reporting that Canadians spent $413.4 billion on goods and services in retail stores last year, 5.8 per cent more than in 2006.

Almost a third of retail purchases – $31 of every $100 spent in retail stores – went to automotive-related products in 2007.

Of all commodity groups, sales of automotive fuels, oils and additives had the strongest growth, up 11.3 per cent over 2006 to $41.5 billion.

The agency says gasoline prices rose 4.5 per cent over 2006, the third time in four years that automotive fuels, oils and additives led sales increases among retail commodity groupings.

Sales of motor vehicles, parts and services rose a modest 3.6 per cent in 2007 to $87.4 billion, on the strength of sales of used automotive vehicles, which rose 7.4 per cent, the largest annual increase in sales of used automotive vehicles since 2001.

The overall, year-over-year sales increase in the third quarter was the year’s weakest at four per cent.

More than half of spending in retail stores focused on transportation, food and beverages.

Of every $100 spent in retail stores in 2007, consumers spent about $21 on food and beverages, $21 on motor vehicles, parts and services, $10 on automotive fuels, oils and additives, $9 on furniture, home furnishings and electronics, $9 on health and personal care, $8 on clothing, footwear and accessories, $7 on hardware, lawn and garden products, $3 on sporting and leisure goods and $2 on non-electric housewares.

The remainder, about $9, was spent on all other goods and services such as tobacco and pet food.”

http://www.thestar.com/article/412859

Few willing to pay for environmental vehicles

–> Westlake Village, California – A new report by J.D. Power and Associates found that although many new-vehicle buyers may want to purchase an environmentally-friendly vehicle, only 11 per cent are “very willing” to pay more to do so. The study, 2008 Power Auto Offline Media Report, found that in particular, new-vehicle buyers who express a strong willingness to pay for more environmentally-friendly vehicles are more likely to be female and are highly educated. The concentration of consumers willing to pay extra is highest in the western U.S. and lowest in the Midwest. The study also found that among these consumers, approximately one in 10 actually purchased a new hybrid vehicle. “The marketing buzz in the automotive industry is all about green cars and trucks,” said Jon Osborn, research director at J.D. Power. “While most consumers immediately think of hybrids when considering an environmentally-friendly vehicle, the price premium of hybrids may be prohibitive. However, consumers don’t have to buy a hybrid vehicle to be environmentally friendly. One can still be environmentally conscious by buying a more fuel-efficient vehicle that gets good gas mileage.” The study also found that new-vehicle buyers who say they are very willing to pay more are also more likely to purchase compact vehicles than the average new-vehicle buyer, and tend to have owned smaller vehicles previously, demonstrating a propensity to consistently choose more fuel-efficient models. The study found that those who purchase hybrid vehicles tend to have attained much higher levels of education, report much higher household income, and are an average of 54 years old, or about four years older than the average new-vehicle buyer. Hybrid owners tend to be proud advocates of their vehicles and typically provide many more positive recommendations about their ownership experience than do other new-vehicle buyers.”

http://www.canadiandriver.com/news_2008/03/07/080307-5.htm

Introduction to the Automotive cluster in Ontario

Chevy Cama 2009 will be built in GM’s Oshawa planthttp://64.233.167.104/search?q=cache:w2mQS__ulg8J:www.competeprosper.ca/view_profiles.php%3Ft%3D1%26file%3DAutos.pdf+automotive+cluster+in+ontario&hl=en&ct=clnk&cd=4&gl=ca

This powerpoint based on Ontario’s Automotive cluster. Listed below are some of thhe facts of the cluster

1. Ontario automotive cluster world’s 8th largest

2. In 2002 99% of Canadian made vehicles were made in Ontario

3. Ontario’s cluster has been annually producing 5% of the motor vehicles

4. The value of production shipment rose from $56 billion in 1991 to $99 billion in 2002

5. Close proximity Michigan-Ohio to Ontario is key to this automotive cluster

Ontario’s Automotive workers are amongst the worlds best. Vocational and college training is numerous and specialised. Toronto’s financial HUB provides a nearby source of capital and expertise.

This is a great link, because it discusses the situation of Ontario’s most successful automotive cluster. Ontario plays a major role in the Automotive industry with the most educated and highly skilled workforce. This is a growing cluster