Oh Canada!: Will this country ever have its own automaker?

 

 

 

 

 

 

 

 

 

 

 

 

 

OTTAWA – With all the recent doomsday talk of Canadian PDA-maker Research In Motion’s seemingly imminent demise, while following the former high-tech giant Nortel’s death, the idea of a Canadian-owned global enterprise seems to be an impossible dream. So as we head into another Canada Day long weekend, I have to ask: Will this country ever see the day when we have our own automaker?

If you happen to be in Ottawa this weekend, perchance to get a glimpse at the recently wed helicopter pilot (Will) and housewife (Kate), the Canada Science and Technology Museum is still showing its In Search of the Canadian Car exhibit that launched last year. There, you’ll find a modest display of 14 cars, including the first car made in Canada, the 1867 Steam Buggy and the ill-fated 1975 Bricklin SV sports car. There’s also a 1961 Mercury Montcalm, an example of a time before the Canada-U.S. Auto Pact was passed in 1965, when 97 per cent of the cars made in Canada were bought by Canadians.

The museum exhibit is bittersweet. Despite this history of Canadians being some of the most-skilled builders of cars in the world, and foreign-owned Toyota, Honda, Chrysler, General Motors and Ford building cars on our soil, the idea of a purely Canadian–backed automaker seems just that—an idea.

Canadian Frank Stronach’s Magna came closest in its bid for cash strapped Chrysler in 2009, before Italy’s Fiat eventually gained control via U.S. bankruptcy proceedings. Even then, allegedly, the Magna bid was contingent on some Russian money kicking in.

Was Frank's stab the last chance for Canada to claim its own automaker?

Or is today's global economy simply too big for a Canadian-only backed automaker to survive alone?

Comments

[hagen]

The Canadian Auto Museum in Oshawa has a significant number cars made in Canada by Canadian car companies. The core of the collection was donated by McLaughlin who went on to head Buick, then GM.

[APP]

John, it depends on what scale you're talking about. The cost to design and develop and market and manufacture and certify and distribute and sell a car is enormous, even for a smaller manufacturer.

A good case in point of a 'new car company' is the fallacy of Tesla Motors. Without going into numerous details (and boy...are there numerous details), the bottom line is that Tesla exists due to the U.S. taxpayers and that nice loan Ms. Pelosi helped steer towards them before her wings were clipped, otherwise they'd be long gone. As well, their roadster was not completely of their own design but one borrowed from Lotus along with Lotus doing the vehicle assembly. Car companies eat cash. Enormous amounts of cash on a daily basis. Even if there was a Canadian start up that was going public, government money and support would be crucial. Another other obstacle amongst many more 'will' be the roadblocks other companies throw in the way of a new Canadian car company via lobbying and 'guiding' certain politicians and getting regulations changed. To answer your question. No, it will not happen.

[Zeke]

You are forgetting the Zenn electric car. Though they stopped building cars in the recent financial crisis.

The fact that the Canadian and Ontario government didn't help them at all while giving billions to FOREIGN automakers (which includes GM and Chrysler) is pretty sad.

[John LeBlnc]

No. I didn't "forget" the Zenn. It was never legalized for road use, and therefore (like golf carts!) can't be considered a legitimate contender.

[DJL]

Are you forgetting HHT the Canadian supercar company? I know they haven't actually shipped a car yet, but I have my finger's crossed for them :)

I think the chances of Canada becoming the home to a major car company in the future are very slim. To start, Canada doesn't really have a history of car design. While many of the big car companies have assembly plants in Canada, I'm pretty sure the cars are all designed elsewhere. So that lack of history, and lack of local design talent would make it hard for anybody looking to start a car company in Canada.

Then there's the problem of economic scale in Canada. We're a country that's truly massive, with a relatively small population spread out from coast to coast. That makes it very difficult for any new business to generate enough sales in the 'local economy' to cover the costs of expansion into international markets. There's a reason why most Canadian companies that reach a certain size get bought out by their international competitors - it's either sell, or get destroyed.

And finally there's the fact that Canadians don't buy Canadian. If you ever go to Germany you'll quickly notice that the vast majority of the cars on the road are German, the vast majority of the appliances in people's homes are German, and that people tend to do their shopping in German owned stores. Neither Wal-Mart nor Tesco (a big UK superstore chain) have been able to make significant inroads in Germany (Wal-Mart eventually gave up and sold out to their German competition). When shopping for a new smartphone, the fact that RIM is a Canadian company will likely play no role in the purchasing decision of a Canadian consumer. That lack of domestic support for Canadian companies makes it extremely hard for Canadian companies to survive let alone grow and compete internationally (and no, I don't work for RIM).

I honestly believe that the only way Canada could ever end up with a truly Canadian car company is if one of the few remaining Canadian billionaires decided to start a supercar or hypercar company as a hobby. One that could compete with Pagani, Koenigsegg, Spyker, McLaren, etc. Or maybe, given the Canadian climate, a high-end, high-performance, off-road vehicle company like Bowler. But unless somebody with very deep pockets, and a very un-business like dedication to the car is behind the company it will more than likely fail before it gets going.

[john leblanc]

"I know they haven't actually shipped a car yet..." pretty much explains why I left HTT out of consideration. Nice try!!

[Dealership Penciling]

A group of Canadian companies have come together to design an electric car, dubbed the Kestrel, with a body sculpted from a super-tough composite produced from mats of hemp. A prototype is being tested, and the first 20 Kestrel cars will be delivered next year. No word on what sort of fumes are emitted by the tailpipe.

[CGS cat back exhaust]

Canada will someday have it. The factors of it may be difficult to do so, but it is possible.