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Tuesday, September 30, 2008


New production data out this week show GM is on the verge of being toppled by Chrysler Canada as the largest producer of cars and trucks by volume for the first time in more than a decade.

General Motors of Canada Ltd. has lost its title as the country's biggest company by revenue.

Soon it may not even be the nation's biggest vehicle manufacturer.

New production data out this week show GM is on the verge of being toppled by Chrysler Canada as the largest producer of cars and trucks by volume for the first time in more than a decade.

GM built 321,485 vehicles this year through August, barely 1,078 more than Chrysler Canada, according to research by DesRosiers Automotive Consultants Inc.

Chrysler was in fact leading GM at the end of July. By the end of the year, it may pass its rival again as GM idles its pickup truck plant in Oshawa, Ont., for six weeks to cull excess inventory.

Come Jan. 1, Chrysler may be ahead by 10,000 units, the equivalent of the number of minivans Chrysler builds on contract for Volkswagen AG in Windsor, said William Pochiluk, president of AutomotiveCompass LLC.

"GM has lost capacity, it has lost its ability to be revenue producing," Pochiluk said. "GM frankly is less competitive now."

A strong dollar, a new labour contract with the Canadian Auto Workers union that leaves overall compensation generally unchanged, and rival jurisdictions that are offering automakers far more aggressive incentives, are all factors working against Canada's domestic industry at the moment, according to researchers at Global Insight.

Very little of the investment GM and its peers will make in their next generation of fuel-efficient vehicles will come to Canada, Pochiluk said.

GM's Canadian output this year has plunged by 41.6 per cent as it cut pickup truck production in response to lower demand in the United States, merged car production from two plants to one, and suffered the effects of a lengthy strike at supplier American Axle.

Analysts do not include production numbers from CAMI, an independent joint venture with Suzuki Motor, in GM's totals. Chrysler's overall production is generally unchanged year over year.

Industry-wide auto sales for September in the U. S. market, where the bulk of Canadian-made vehicles are shipped, will lose momentum after a modest sales rebound in August, according to Itay Michaeli, an analyst at CITI Investment Research.

GM of Canada fell from the top slot on the FP500 list of the country's largest corporations in 2006, overtaken by Royal Bank of Canada and Manulife Financial Corp.

It dropped another spot last year, falling behind food giant George Weston Ltd.

LINK:Chrysler may overtake GM Canada: Reports
 
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