Canada’s auto sales soar; Toyota passes 100K mark for hybrids

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Auto sales in Canada were up 8 per cent in August, reaching 21 per cent higher than the five-year average for the month. A total of 171,560 new cars, trucks, minivans and SUVs were sold in Canada in August, according to the Global Automakers of Canada. Light trucks dominated, with 100,621 sales, an increase of 14.1 per cent over a year ago. Car sales were little changed compared to last year, with just under 71,000 sold. So far this year, Canadians have bought 1,256,649 vehicles, compared to 1,201,664 last year at this time.

The winner of the race for sales was Ford, selling just under 28,000 units. This was up 3 per cent year over year. Chrysler still leads in year-to-date sales through the end of August but Ford has narrowed the gap. For Chrysler, it was the best August ever, with sales 22 per cent higher than a year ago, largely on the strength of huge demand for the Jeep, as well as for the Chrysler 200 and the Ram truck. It was the auto maker’s fifty-seventh straight month of rising sales.

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Toyota Prius 2015. Toyota has sold more than 100.000 hybrids in Canada since 2000.

General Motors of Canada sold 22,111 vehicles in August, an increase of 4.8 per cent from 21,091 a year ago. As with the other auto makers, GM sold more trucks than cars; truck sales were up 7.3 per cent at 16,089 from 15,001, while car sales totalled 6,022 compared with 6,090 a year ago.

Toyota also sold 4.8 per cent more vehicles this August than a year ago, with 18,487 vehicles sold. Nearly half of Toyota’s sales were trucks (8,978), the best-ever August for truck sales, driven by a 32.2 per cent increase in sales of RAV4, the best month ever for the popular truck.

Another milestone was reached by Toyota, which marked the sale of 100,000 hybrids. The company says that more than three-quarters of all hybrids sold in Canada since 2000 have been Toyota and Lexus products, including the Prius models, the Camry Hybrid, and the Highlandler Hybrid. In announcing the milestone Toyota Canada president and CEO Seiji Ichii noted that Toyota hybrids use 30 per cent less fuel than conventional gas-powered cars. Four Toyota models, the Prius, Prius c, Prius v and Highlander Hybrid won awards for fuel efficiency from Natural Resources Canada in 2014.

Nissan also announced an August sales record, with Canadian sales reaching10,801 units, an increase of 31.8 per cent. It was the thirteenth consecutive month of record sales growth and the sixth straight month of sales exceeding the 10,000 unit mark for the Nissan Group in Canada.

Subaru Canada, meanwhile, announced its eighth back-to-back month of strong growth, selling 3,691 units, an increase of 10.5 percent over last August. Year-to-date sales also rose by 15.8 percent over the same period last year. The biggest seller for Subaru was the 2015 Subaru Outback: sales rose 74.9 per cent for its midsize SUV alternative.

Windsor, auto industry counting on new Ford investment

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The Canadian auto industry, which had the best second quarter in terms of operating revenues since 2007, but turned in a poor profit performance, could be on the brink of receiving a much-needed boost. The auto industry and several levels of government have been in talks with Ford of Canada about a significant new investment in the auto maker’s Windsor, Ontario operations.

The new investment, which has been reported to be in the area of $1.5 billion, would be for production of 1.5-litre and 1.6-litre engines for the Ford Fiesta. The company could either build a new plant or expand and retool an existing one. The two plants being talked about are the Essex and the Windsor engine plants.

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Ford Fiesta ST 2015. Windsor is competing with Mexico to land new investment in engine plant to build 1.5 and 1.6 litre engines for the Fiesta beginning in model year 2017

The president of Unifor, the union that now represents Canada’s auto workers, said in the Windsor Star that getting the new Ford work would be “a game changer for the auto industry in Canada.” Jerry Dias, said that the 1.5- and 1.6-litre engines, with a hybrid derivative, is the type of technology required for a long-term sustainable strategy for the industry.

Whether Ford chooses Windsor over Mexico, which is also in the running, will depend in part on how attractive the federal and provincial incentives are. The Windsor Star reported that Ontario has agreed to contribute $385 million, adding that if the federal government were to match that amount, the incentives would total more than half the value of the investment by Ford. This has not happened before. Government involvement in the way of incentives has typically been at the level of about 20 per cent of the auto maker’s investment.

Looking only at labour costs, Canada cannot compete with Mexico. Average hourly labour costs in Mexico are from $5 to $7, the Windsor paper says, while in Canada the cost, not including the Japanese makers, is about $32 an hour. However, the hourly rate of pay for new-hire auto workers was negotiated down in the last contract talks, to 60 per cent of the regular rate.

Analysts point out that wages may not be the only factor considered in Ford’s decision. Quality is also important, and Canadian auto workers are reputed to be highly skilled and educated. They also have experience building Ford engines. Ford’s Windsor and Essex Engine plants currently employ about 1,300 hourly workers. They build engines for the F-150 pickup, Mustang sports car, Econoline cargo van, Ford Expedition and Lincoln Navigator SUVs.

Second quarter operating revenues in the auto and auto parts industry were up 6.5 per cent, to $29.2 billion, Statistics Canada reported. Operating profits, however, were down 22.1 per cent, to $1 billion, as a result of higher expenses. Manufacturers had to add shifts and pay out more overtime to meet strong demand in the second quarter following a weaker first quarter.

Scientists make breakthrough in spinal cord injury movement

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For the first time ever, a quadriplegic man has moved his paralyzed hand using only his thoughts. That simple act is being hailed as a breakthrough in the search for improved movement for spinal injury patients. While other experimenters have used computers and robotics to move paralyzed muscles, this is said to be the first human-machine interface by which a person has been able to consciously move a paralyzed limb using brain waves.

The technology involved, called Neurobridge, was developed at Ohio State University and Battelle Memorial Institute. A thought-reading microchip was first implanted in the area of the patient’s brain that controls the muscles of the arm. The chip processes the patient’s thoughts, then transmits them to a specially designed electrode stimulation sleeve worn on his forearm, bypassing, or bridging, the spinal cord. The sleeve then converts the signals from the brain into movement by stimulating the appropriate muscles in the arm, and it does so in less than one-tenth of a second.

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The arm of a paralyzed patient fitted with the electrode stimulation sleeve that communicates with a microchip implanted in his brain, allowing him to move his hand by thought alone.

The research leader at Battelle compared the process to a heart bypass, except that instead of bypassing blood “we’re bypassing electrical signals. We’re taking those signals from the brain, going around the injury, and actually going directly to the muscles,” said Chad Bouton.

The team has worked on the Neurobridge technology for more than a decade, developing the algorithms and the sleeve to make it possible. Though still a long way off, the ultimate goal of the technology is to restore self-powered movement for brain and spinal cord injury patients.

The head of the Department of Physical Medicine and Rehabilitation at Ohio State University’s Wexner Medical Center called the development a “tremendous stride forward . . . Now we’re examining human-machine interfaces and interactions, and how that type of technology can help.”

Tesla now biggest car maker in California

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Tesla Motors has surpassed Toyota as the largest auto maker in the state of California and is likely to remain so. The electric car maker said that it now employs more than 6,000 workers there, ahead of Toyota’s 5,300. Toyota, however, will be moving most of its production out of California by 2017, leaving Tesla securely in the number one position. The company’s main factory, occupying 510,000 square metres, was originally built by General Motors in 1962. Many are saying that Tesla’s presence marks the resurgence of California’s dying auto industry.

Tesla hopes to turn out half a million of its electric cars per year by 2020, and Tesla founder Elon Musk has been speaking of the need for battery “gigafactories” to accomplish his goal of making a mass-market electric car. He announced that he would build one gigafactory, with production capacity of 500,000 units per year, back in February, but so far has not specified where it will be. He has said that building such a factory, which would cost roughly $5 billion, is the only way to cut production costs so that he can sell more of the cars. With the addition of gigafactory-scale production, Musk believes they can lower the cost of the battery by at least 30 per cent, thanks to economies of scale, innovative manufacturing processes, reduction of waste and reduced overhead. The Model S Tesla now starts at $72,000.

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Tesla’s founder Elon Musk believes they can bring costs down by at least 30 per cent by mass-producing car batteries in gigafactories. One gigafactory now planned would be capable of turning out 500,000 units per year.

The Tesla batteries currently in use are made by Panasonic. Musk estimates that his single proposed gigafactory will be capable of producing as many lithium-ion batteries as are currently produced worldwide. Musk recently said that the world would need 200 of these gigafactories to supply demand, assuming worldwide demand for electric cars replaced demand for conventional cars. Current auto production is around 65 million annually, but that is projected to rise to more than 100 million in coming decades.

Is this switch to electric cars likely to happen on such a scale? Musk is optimistic, based on the way other disruptive technologies like digital cameras, MP3 players, laptops and smartphones have taken hold.

Google’s self-driving cars revealed to media for first time

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The race to bring a self-driving car to market could be getting closer to the finish line. Google, the biggest player on the field in terms of technology, showed off that self-driving technology to reporters this week, though it says a market-ready model is still six years away. Volvo, however, says it will have self-driving cars for sale by 2017.

The Google effort began as a Google X project in 2009. Now they are ready to demonstrate how far it has come, and various auto writers who went to Google headquarters in California to go for a test drive have described the experience. All say that what struck them most was the ordinariness of the ride in the specially modified Lexus SUVs. While test drivers sat in the driver’s seats, the cars drove themselves, and did so with a precision and rigid attention to road safety that one writer likened to riding with a driving instructor. The cars accelerated briskly, stopped at all red lights and slowed for cross-walks. The cars even swerved to give extra space to cyclists and larger vehicles on the road.

The cars drive themselves using a combination of stored information based on previous driving, and precise maps of the area where they are operating, including every traffic signal and sign. A Global Positioning System (GPS) tells the vehicle approximately where it is, and that positioning is further refined by roof-mounted laser sensor equipment that sees 360 degrees. Position sensors in the wheel hub, orientation sensors inside the car, and radar for detecting the speed and distance of vehicles ahead make up the main technology. All of  the data are processed to create a detailed map of where the vehicle is in real time. To deal with the more intangible aspects of driving, such as anticipating what other drivers will do in any given situation, the Google cars rely on a combination of past experience, signals, and probability theory.

So far the Google cars are enabled for driving on about 3,500 kilometres of road that have been thoroughly mapped. This is the challenge the engineers now face: to expand that range so that the cars can drive anywhere. They have not yet been tested in snowy conditions, and driving in the rain is also problematic.

One of the justifications for the autonomous car is safety. According to Google, self-driving cars would reduce the number of fatalities due to driver-caused accidents by 90 per cent. With approximately 33,000 auto accident deaths in the US each year, that would be a very significant achievement. The Google fleet of two dozen autonomous cars has had no accidents or collisions so far after test drives amounting to 700,000 miles (1.12 million kilometres). For its part, Volvo is intent on introducing accident-free cars to market by the year 2020.

Meanwhile, though Volvo says it can have its autonomous cars on the road in Sweden by 2017, those cars will be capable of Level 3 autonomous driving, which is the ability to drive by itself. Volvo already manufactures cars equipped with all the laser, radar and other sensing gear needed for autonomous driving. Its City Safety technology, consisting of a forward-facing camera, laser scanner and radar system, was designed to assist drivers. It warns drivers and automatically brakes or steers away from a collision. Taking it to the next level, which is the ultimate goal, could take years. Level 4 autonomous driving allows the “driver” to simply tell the car where to go then sit back and enjoy the ride.

Canadian car sales break record amid concern about investment in the industry

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Canada’s car sellers broke a new record in 2013, surpassing $90 billion in total retail sales for the first time. Revenues at the country’s car dealerships were up 5.7 per cent over 2012. Sales also set a new record, with 1.74 million units sold, according to the Canadian Automobile Dealers Association (CADA).

The chief economist for CADA, Michael Hatch, attributes the strong sales to affordability in the marketplace and strong product choice. Consumers are also “releasing the last of the pent-up demand from the recession,” he said. Many consumers had delayed making a purchase until the economic recovery seemed secure. Hatch called the record sales “great news for the industry but also for the economy at large,” as well as a huge milestone for CADA members.

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Record-breaking $90 billion sales in 2013 is good for the industry and for the economy, according to the Canadian Automobile Dealers Association. But is investment in the manufacturing side drying up?

The $90 billion in sales represents almost 5 per cent of Canada’s GDP, CADA said in a release. Put another way, it is the equivalent of every man, woman and child in Canada spending $2,500. While this level of expenditure contributes to the overall indebtedness of Canadians, since most car buyers have to finance their purchase, the cost of servicing consumer debt has been falling, said Hatch. The availability of consumer financing is an important part of the car retail business, and consumers are managing their debt very well, he said. In the fourth quarter of 2013, the delinquency rate on car loans was just 0.11 per cent, the lowest default rate of all forms of consumer debt, according to Hatch.

While car retailers have reason to celebrate, the picture is not quite so bright for the auto manufacturing sector. A report from the Office of Automotive and Vehicle Research at the University of Windsor states that of the $18 billion invested worldwide in auto plants last year, none of it came to Canada. The report considers only investment that increases a plant’s assembly capacity, either a new plant or an expansion of an existing plant. Canada, the Windsor report says, has slipped from fourth place among the world’s auto assembly nations to tenth place. China, not surprisingly, has been the biggest winner in the scramble for investment, attracting $12.6 billion in 2013, two-thirds of the global total.

The Canadian Automobile Dealers Association (CADA) is the national association for franchised automobile dealerships that sell new cars and trucks. It has 3,300 dealers, who collectively employ over 130,000 people across the country.

Magna producing first all-olefin liftgate assembly for Nissan Rogue

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Magna International is now producing North America’s first all-thermoplastic olefin liftgate module for the 2014 Nissan Rogue crossover utility vehicle. Magna says the liftgate is unique in that it is made from entirely recyclable materials. It is the first painted outer panel made from thermoplatic olefin. The use of plastic rather than stamped steel makes the assembly 30 per cent lighter, which will contribute to the vehicle’s fuel efficiency, Magna says. The injection mould production of the assembly also allows Magna to manufacture the assembly complete, with all inner trim and reinforcements, as well as running lights and electronics.

The liftgate was developed in collaboration with Nissan and several materials suppliers. Last November it was recognized by the Society of Plastics Engineers as the year’s most innovative use of plastics in the auto industry.

The liftgate assembly is made by Magna Exteriors’ Decostar division in Carrollton, Georgia, and is delivered to Nissan as a module for single-point installation at its Smyrna, Tennessee, assembly plant.

Magna announced earlier that it would create seventy-five new jobs at its Dortec manufacturing plant in Newmarket, Ontario. The company will spend $1.5-million expanding the Magna Closures unit which produces electronic control modules for power closure and roof systems. The plant will also produce a new electronic side-door latch.

“We expect electronic closure and latching technologies to be a game-changer for the industry over the next five years and they will eventually become the future mainstream design,” Magna Closures president Frank Seguin said in a statement.

Little support in auto industry for Canada/Korea free trade deal

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Canada’s largest private sector union, Unifor, is concerned that an imminent free trade agreement between Canada and South Korea, to be signed by Prime Minister Stephen Harper, poses a “serious threat” to Canada’s auto industry. The agreement, according to a Unifor statement, fails to protect Canadian workers. A Unifor  fact sheet states that Canada can expect to lose 33,000 manufacturing jobs as a result of the free trade deal.

For one thing, the deal lacks a “snap-back” provision, which would allow Canada to re-impose tariffs to pre-agreement levels if the Koreans used other trade barriers to limit Canadian exports. The United States negotiated such provisions in its free trade agreement with Korea, but even with the snap-back, the balance has been in Korea’s favour, says Unifor.

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Stephen Harper and South Korean prime minister Kim Hwang-sik. The impending free trade agreement doesn’t do enough to protect Canada’s auto industry, according to industry and labour leaders.

“We cannot stand by a deal that secures a one-way flow of  Korean auto imports into the Canadian market, undermining the jobs and industry on which so many Canadians depend, while precious little is done to strengthen our imports to Korea,” said Unifor National President Jerry Dias.

Unifor says that there will be a three-year phased-in removal of Canadian auto tariffs on Korean vehicles and an immediate removal of Korean tariffs on Canadian exports. Ontario had wanted the 6.5 per cent tariff on Korean exports to be phased out over seven years, as was negotiated between Korea and the European Union. The labour union had also recommended several measures that it says would have ensured a more fair, mutually beneficial agreement between the two countries. One of these was to tie tariff reductions to “measureable targets” in reducing the existing trade imbalance in key industries such as auto.

“The problem is that Prime Minister Harper did not address the current trade imbalance.  We needed our political leadership to broker a deal that addressed the reality that we have 100 000 Korean-made cars being imported to our market, while we are exporting only 100 cars to the Korean market,” stressed Dias.

The Ontario minister for Economic Development and Trade, Eric Hoskins, has said that removing the 6.5 per cent tariff on Korean autos imported into Canada will just mean more cars flooding in.

The CEO of Ford of Canada, Dianne Craig, has also condemned the free trade deal, warning that Korea is and will remain “one of the most closed automotive markets in the world” under this deal. Korea uses non-tariff trade barriers and currency manipulation to ensure its favourable trade balance with foreign trading partners.

Looking at the bigger picture, Canada’s trade imbalance with Korea is almost two to one: Canada sold $3.7 billion worth of goods to Korea in 2012, but bought $6.4 billion from Korea.

As reported in the Windsor Star, Ontario now wants the federal government to establish a task force of industry and labour representatives to monitor and report on Korean car imports and any unfair trade practices associated with them.

A fact sheet prepared by Unifor shows Canada’s auto imports from Korea at $2.6 billion in 2012 while Canada’s auto exports to Korea that year were just $12.5 million. The number of Korean-made vehicles sold in Canada was “almost 100,000”; Canadian-made vehicles sold in Korea in 2012 were “under 100.”

Magna unveils newest concept car, posts strong Q4 profits

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Magna International will present its newest concept car, the MILA Blue, at the Geneva Motor Show 2014. The latest example of Magna’s expertise in complete vehicle design and assembly is a lightweight, four-seat, A-segment (mini) natural-gas powered concept car. MILA Blue is the seventh concept vehicle in the MILA line and weighs 300 kilograms less than “typical” A-segment vehicles. It achieves this significant weight reduction through the use of innovative materials and downsizing.

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MILA Blue, a new natural gas/electric hybrid from Magna International, will be shown at the Geneva Motor Show 2014.

The drive system in MILA Blue is a compressed natural gas hybrid drive that achieves a carbon footprint of less than 49g CO2/km. The combustion engine is coupled with an automatic manual transmission and a belt-driven starter generator. The vehicle’s comparatively light weight allows for the use of a 12 volt electric motor and start-stop system to drive on electric power in stop-and-go traffic and cruising up to 30km/h.

Strong gains in fourth quarter and yearly financial results

Magna International posted its fourth-quarter and 2013 financial results today, reporting sales of $9.17 billion for the quarter. This was an increase of 14 per cent over the fourth quarter in 2012. Magna’s fourth-quarter profit was $458 million, compared to $351 million in 2012. Dividends to shareholders increased by 19 per cent on the strong sales.

Vehicle production increased in North America and in Europe, relative to 2012, as did Asian production sales, tooling, engineering and other sales.

Sales of complete vehicle assemblies rose 20 per cent to $3.06 billion for the year. Volume of complete vehicle assemblies rose 19 per cent over 2012 numbers, to 147,000 units.

“We maintained our solid performance in North America and made further progress in improving profitability in Europe,” Magna chief executive officer Don Walker said in a statement. “Recent investments in Asia have begun to yield returns, even while we continue to invest in the region.”

South America, which is part of Magna’s geographic segment it calls Rest of World, (also including Africa and Asia), remains “challenging” for the company, but is “poised” to begin improving.

Magna calls itself the most diversified automotive supplier in the world, designing and manufacturing everything from auto components to complete vehicles, which it sells to OEMs of cars and trucks around the world.

Ford announces Edge production will remain in Oakville

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Ford of Canada will build the next generation of its best-selling “global utility” vehicle Edge, now completely redesigned, at the Oakville Assembly plant. The company already builds the current model of the Edge in Oakville, along with the Ford Flex, Lincoln MKX and Lincoln MKT. The new Ford Edge will be shipped to more than 60 countries, Ford says.

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Ford Edge, 2014 model. The redesigned Edge will be built at the Oakville Assembly Plant, which is currently being transformed for the new production.

The global market for utility vehicles grew 13 per cent last year, according to Ford, and within the segment, Ford did even better, growing its share by 35 per cent. Ford sold 1.2 million of the utility vehicles in 2013, with more than 1 million Edge vehicles produced. Growth in the utility market outside of North America was even stronger, and is projected to continue strong in 2014. Ford’s top-selling utility vehicles in North America are the Explorer and the Escape. In the US, Ford is the best-selling utility brand. In May last year, Ford said that utility sales were growing faster than any other Ford vehicle segment.

In announcing the production of the Edge in Oakville, Ford recalled its intention, announced last September, to invest $700 million in the plant. That investment was to expand manufacturing capability to meet “surging global demand” and preserve more than 2,800 jobs. The president of Ford of the Americas, Joe Hinrichs, said at the time that Oakville “is vital to Ford’s global manufacturing system,” and that it would offer “world-leading flexibility” in its ability to respond quickly to consumer demand. Hinrichs said at the time that Ford would bring “several new global models to the plant.”

A Ford Edge Concept is on display at the Canadian International Auto Show. Some options in development include automatic parking assistance, obstacle avoidance, and adaptive steering technology. The new Edge also features fuel-saving technologies.