Canada to lead North American Q1 auto gains: report

Fri Feb 25, 2011 3:35pm EST
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By Susan Taylor

OTTAWA (Reuters) - Canada will outpace the United States and Mexico in first-quarter automobile production growth, which will add roughly 1.5 percentage points to the country's economic growth, according to a report released by Bank of Nova Scotia.

Canadian auto production is expected to jump to an annualized 2.5 million units in the first quarter of 2011, up 32 percent from 1.9 million units in the fourth quarter of 2010, Scotiabank analyst Carlos Gomes said on Friday.

That will mark the biggest gain since mid-2009, when the global economic recovery was just taking hold.

Fourth-quarter Canadian production was down sharply, from 2.3 million units in the third quarter, due to a retooling at Chrysler's car plant in Brampton, Ontario, Gomes said in an interview.

First-quarter vehicle production in the United States is seen rising to an annualized 8.3 million units, up 9.2 percent from 7.6 million units in the fourth quarter and 8 million units in the third quarter, Gomes said.

In Mexico, first-quarter production is expected to rise 6 percent to an annualized 2.62 million units, from 2.47 million units in the fourth quarter and 2.54 million units in the third quarter, he said.

Rising vehicle output will add about 1.5 percentage points to economic growth in Canada, compared with 1 percentage point in both the United States and Mexico, the report estimates.

Canadian gains will also come from higher production at General Motor's facilities in Oshawa, Ontario, Gomes said. Late last year, GM boosted production of its popular Chevy Equinox crossover-utility vehicle, he said.   Continued...