The North American automotive value chain: Canada’s role and prospects

Journal Article (Journal Article)

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.

Full Text

Duke Authors

Cited Authors

  • Sturgeon, TJ; Van Biesebroeck, J; Gereffi, G

Published Date

  • January 1, 2009

Published In

Volume / Issue

  • 2 / 1-2

Start / End Page

  • 25 - 52

Electronic International Standard Serial Number (EISSN)

  • 1753-1950

International Standard Serial Number (ISSN)

  • 1753-1942

Digital Object Identifier (DOI)

  • 10.1504/IJTLID.2009.021955

Citation Source

  • Scopus