Canadian automakers seen losing C$2.1 billion this year
TORONTO (Reuters) - Auto manufacturers in Canada are expected to lose a combined C$2.1 billion ($1.8 billion) in 2009 and the industry will not turn a profit until at least 2011, the Conference Board of Canada said on Thursday.
Anemic U.S. consumer demand pushed Canadian auto production down by 21 percent last year and a further 36 percent drop is forecast for 2009, bringing production back to 1992 levels, the board said in its twice-yearly outlook for auto manufacturing.
Most vehicles made in Canada are sold in the United States.
About 13,400 auto assembly jobs are forecast to be lost in 2009. In all, total industry costs this year will decline by 33 percent.
"Automakers are bracing for more difficult months ahead and 2009 will be one of the most challenging years for the industry," Sabrina Browarski, an economist at the Conference Board, said in a release.
"After losing C$2.7 billion in 2008, the industry is expected to shed another C$2.1 billion this year, and it is forecast to remain in the red until at least 2011."
The medium-term outlook is based on the assumption that General Motors Corp will survive and the restructuring of Chrysler will be successfully completed under a stable partnership with Fiat.
GM, Chrysler, Ford Motor Co, Toyota Motor Co and Honda Motor Co all have Canadian manufacturing units, with most of their operations in the province of Ontario.
If the restructuring is successful and U.S. demand for automobiles rebounds, the board said the Canadian industry could eke out a profit in 2012. By 2013, profit margins are forecast to return to the levels of the early 2000s.
(Reporting by John McCrank; editing by Peter Galloway)
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