Auto Sector: Shakeup Coming?
- Feb 16, 2017
By Peter G. Hall, Vice-President and Chief Economist, Export Development Canada
America's love affair with the automobile rolls on. It's plain in the numbers: while other sectors of the economy have spent seven years trying to get back on their feet, auto sales have long since zoomed back to historical peak levels. And they'll be there for awhile, given the average age of the US fleet. Amid all this success, the sector finds itself close to the center of today's hottest debate: the future of US – and global – trade. Is the North American auto industry about to see a major shake-up?
This sector is no stranger to shake-ups. First, it is very cyclical. High, long-term capital costs expose the sector to the wild swings in sales that come with recessions. Even the most well-heeled of OEMs experience serious cash crunches
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