There are many economic indicators out there that are showing that the North American economy is slowing down to the point of a double-dip - what does this mean?  Many publications (including the Autonews) are openly asking the question if parts suppliers can withstand another recession.  My immediate thought is that production levels are not going to decline anywhere near as far as before, but they could level off.  Why?  There is no way that people can continue to hold off indefinitely on replacing current vehicles; the average age of vehicles in use continues to exist at a record high, but eventually this will plateau and people will need to replace their vehicles.

 I think if production slows down, the automotive companies are much more flexible in years past to adapt to change and to continue to focus on lean operation, automation, and efficiency.  I think the strength of the Canadian manufacturing base and the continued solidity of Canadian banks could in fact make a downturn a (minor) positive occurrence, allowing Canadian companies to grow via acquisition as their less supported competition in the USA struggles forward.

 What are you seeing - opportunity or threat?

Disclaimer:

The views expressed here are those of the author, and not necessarily of Export Development Canada

Les vues exprimées dans ce propos sont celles de l'auteur. Elles ne reflètent pas nécessairement le point de vue d'EDC.