ECONOMIC ENVIRONMENT OF BUSINESS Trimester III CASE REPORT On Automotive Industry of Canada in Dwindle Submitted To: Submitted By: Dr. Veena Keshav Pailwar Section B || Group No - 3 Aditi Bhandakkar 2015073 Anshuman Thakur 2015085 Brajesh Lahoti 2015090 Prathamesh Dicholkar 2015094 Radhika Rathi 2015111 Varddhaman Jain 2015126 INTRODUCTION Automotive industry in Canada consists of primarily assembly plants of foreign automakers having their headquarters in US and Japan, along with hundreds of manufacturers of automotive parts and systems. The Canadian automotive industry is integrated into NAFTA (Canada, US, Mexico), globally competitive, and is the 8th largest in the world with positive trade balance, and also a major contributor …show more content…
The reason was the lack of investments in the industry as compared to the other countries like Mexico, United States etc. This was benefiting the other countries and the investors were driving away from Canada. Canadian Dollar appreciation had made the automotive raw material (parts, oil, etc.) and the finished goods prices dearer and the labor prices which were previously cheaper were becoming expensive. This resulted in the major automotive companies to move out of Canada, hence affecting the GDP of the country and the employment. Now the major question arises that should the Canadian Government be dependent on just Automotive industry? Will the employment problem be aggravated if the Canadian Government shifts its focus to other industries? Will the shift be helpful in bringing more foreign investments in the country? …show more content…
With Canadian auto industry now accounting for 15.6% sales only in North America compared to 17% in 2010 and an increase in 4000 jobs since 2009, making it a clear cut understanding that the Canadian Auto Industry is slowly decelerating. Since the Auto Industry is on a decline and eventually would reach to the shutdown point, unemployment would take place on a massive scale, so in order to curb down unemployment during the upcoming event, Carmakers should open up avenues featuring like after sales service, ancillary industries i.e. Car accessories, manufacturing of parts, etc. Similarly, Government should also invest money in retraining the unemployed workers in other sectors. With the decline in the auto industry, the Canadian government should try to focus onto different sectors which are growing at a good pace instead, like Tourism & Hospitality, Manufacturing, Oil, Natural Gas & Banking and Finance. A recent research conducted by Deloitte Inc. suggested that the increase in Tourism industry was $100 Million generating $69 Million in indirect spending. The research also suggests that Canada’s 2015 international arrivals have grown at the same rate as the U.S., Canadian export volumes would have risen by $4.1 billion, which is nearly as much as Canada exports to Brazil and Russia combined ($4.3 billion).
During 2014 there was an ethical dilemma that occurred at Canadian Tire. There was an employee named Samantha and she held the position of a Supervisor at Canadian Tire. Canadian Tire would give out Canadian Tire money to their clients depending on how much they have spent at the store and this was basically a marketing strategy for Canadian Tire whereby the clients could use the Canadian Tire money to purchase merchandise at the store. Samantha was in charge for restocking the Canadian Tire money at all times. Every time Samantha restocked the Canadian Tire money she would always withdraw few dollars out for herself and make adjustments on the paperwork and she would go to the Canadian Tire Gas station and purchase gas for herself. She went
Ultimately, however, it is Canadian exporters of all sizes and in all industries that make this relationship as successful as it is. In 2003, Canada exported approximately C$365 billion worth of goods and services to the U.S., while it imported nearly C$280 billion from its southern neighbour. In fact, U.S. exporters sold more goods to Canada in 2003 than they did to the European Union.
spending in Canada was 24.4% greater than in the U.S. and if you subtract the
It is therefore imperative for Canadian businesses to continue to improve productivity and develop the culture of continuous research and innovation. Intense domestic and foreign competition also needs to be in place to drive productivity gains. The role of Canadian government will be to make Canada an attractive place to work, live and invest. This will bring in valuable human as well as financial capital that will be conductive to achieving competitiveness. The government should also realize and deal with social and environmental issues as a matter of priority with a strategy to move ahead of other developed countries and avoid future burden on the economy when these issues start to become a bigger problem in the future.
Based on current issues of Honda, Honda Canada announced that it will export vehicles to Europe for the first time. They stated that Honda’s decision to build it’s the next generation of EU-destined CR-Vs in Canada is a result of the Historic free trade agreement we reached in EU, which provides preferential market access to a half-billion new customer. Under Canada-EU Agreement, the European Union will eliminate 10% tariff on the passenger of vehicles, providing Canada’s automakers with a competitive advantages in the EU market. The EU also eliminates – upon the agreement coming into effect – its tariffs on auto parts, which run as high as 4.5%. How Honda penetrate their business in China Honda entered the Chinese market in 1982 by cooperated
Stephen Harper believes providing investment incentives for manufacturing businesses, improving free trade, and providing government funding to privatize and incentivize R&D will increase Canada’s productivity growth (Alini, 2013, para. 18). Furthermore, the federal government needs to create a demand and for Canada’s products and resources. In addition, government funding needs to go towards educating Canadian citizens on the aspects of industry that will contribute to an increase in productivity. NAFTA is beneficial to Canada, but there are many other countries that are willing to have trade agreements as well. Lastly, the federal government needs to revamp taxation to all corporations to encourage corporate expansion, new foreign investments, and to attract new businesses and
And Outsourcing the assembling of auto parts to Mexican plants. Canadian suppliers must compete based on lowest-cost, highest-quality, high value-added; components. The low value of the peso will encourage parts and vehicle sourcing from Mexico while discouraging exports to the Mexican vehicle market. Global competition will intensify for both parts companies and assemblers, particularly as emerging countries struggle to develop their economies, many using the automotive sector to spur economic growth.
Canada's labour productivity growth has lagged behind the US numbers for over 30 years and could be from a number of possible explanations. One reason in particular could be the sluggish innovation in the information technology industry. The tertiary sector of the global economy has been increasing in the last 30 years. However, Canada has been emphasizing focus on the primary industries such as mining and agriculture and the secondary industries like
Economic prosperity has been a goal of countless Canadian governments throughout the 2000’s and while there have been moments where it seemed the economy would fail, it would always revive and prosper. According to economist, economic prosperity can be achieved through the economic goals. Each of the three journals that we have done this semester allow for insight within the workings that can be done in order to work towards these goals and ensure the economic prosperity of Canada. A few things that the journals showed that can be done within the Country to ensure economic accomplishment would be the economic development of cities beside Toronto and other big cities, Canada’s continued contribution to the development of jobs and the constant
The government can address possible business concerns by taking the leading when it comes to social issues. States could provide things like healthcare so business does not have to worry about proving healthcare to their employees and worrying about the health of their customers. The Canadian government can address possible business concerns by keeping track of the social movements and responding in a way that gives the Canadian population what they want.
Because of Canada’s low population the country is forced to sell to other countries which in return is a massive boost to the Canadian economy. However Canada needs to improve and adapt to meet the worlds
- Our economy is dominated by the service industry, which employs about three quarters of our workforce. - We possess large amounts of natural gas and oil in places like Alberta and Atlantic Canada. Which results in Canada having 13% of the world’s oil reserves. - We have the third largest amount of natural oil after Venezuela and Saudi Arabia. - We are one of the world’s largest suppliers of agricultural products.
With the advent of safe and affordable cars that appeal to the taste of consumers around the world from some Asia countries like Japan that produces Toyota, Honda, Nissan, Mazda etc. The America auto industry is hereby faced with the challenge of global competition from the automobile companies in Japan. Also, with India and China producing an automobile, the American automobile is further subject to more global competition. This is as a result of the low cost of labor that these countries enjoy that has given them the comparative advantage to manufacture affordable and safe automobiles.
Employment Opportunities in Canada Canada has always been a dream destination for people around the world to live and work. Citizens of UAE are constantly looking for Canadian visa to enable them work and live in this wonderful country. Due to the continuous application of Canadian Immigration Visa around the world, it has become difficult to get one and this is a challenge people with the dream of travelling to Canada are facing in UAE. It is a known fact that Canada provides several employment opportunities to people from other countries that have the required skills and are passionate about living and working in Canada. These employments opportunities are made possible because of the fact that Canada has a viable and striving economy with
Except for the two-wheelers, all other segments in the industry have been weakening. There is a negative impact on the automakers and dealers who offer high discounts in order to push sales. To match the decline in demand, automakers have resolved production cuts and lay-offs, which result in capacity utilization for most automakers remaining at a dismal level. Despite the comprehensive market being under extreme burden, the luxury car market has seen a robust double-digit hike during the year 2013-2014, as a result of rewarding new launches at the lower price points. Further, with the measured increases in the price of diesel, the overall market continues to shift towards petrol-fuelled cars.