The North American automotive value chain: Canada’s role and prospects
Abstract
This paper deals with the North American automotive value chain and analyses the prospects
for Canadian automotive sector upgrading. The size and importance of the automotive
industry in Canada’s Ontario Province is a legacy of its historic ties to the ‘Big
3’ US automakers and its proximity to the traditional heartland of the US industry
in Michigan. Canada continues to have marginally lower operating costs than the USA
and a strong industrial culture that attracts investment. But Mexico’s integration
into the North American production system, the rise of new centres of automotive production
in the southern USA and rapidly growing flow of automotive parts from China to North
America have begun to erode this advantage. Because the North American market is saturated,
consisting mainly of sales of replacement vehicles, locational shifts in production
and employment within North America are essentially ‘zero-sum games’. If the market
share of the Big 3 continues to fall and the southward shift of the industry within
the USA is maintained, the sustainability of the Canadian industry could be undermined.
The paper concludes with a set of policy recommendations for Canada to maintain its
comparative advantage in the industry. © 2009 Inderscience Enterprises Ltd.
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https://hdl.handle.net/10161/11559Published Version (Please cite this version)
10.1504/IJTLID.2009.021955Publication Info
Sturgeon, Timothy J; Biesebroeck, Johannes Van; & Gereffi, Gary (2009). The North American automotive value chain: Canada’s role and prospects. International Journal of Technological Learning, Innovation and Development, 2(1-2). pp. 25-52. 10.1504/IJTLID.2009.021955. Retrieved from https://hdl.handle.net/10161/11559.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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