A report on new car industry in B.C. Canada
Introduction
The automotive industry in British Columbia is majorly a service industry revolving around sales, marketing, repair and dumping of vehicles. Officially, the sector accounts for 1.9% of gross GDP (by maintaining a vehicle fleet to sustain a flow of goods and services through the province) and employs 2.3% or 45,000 people combined for both technical and corporate positions. With businesses spread across the province, the sector is primarily run by small businesses with less than 10 employees (Greg. Keenan, 2014).
Owing to factors such as drifting technological changes, complex nature of businesses, and demographical changes, it’s becoming difficult for employers to retain a good number of people and add to their workforce.
Industry Overview
Ever since 1964, the automotive industrialists in British Columbia have achieved excellence by adopting the latest technological methods and through innovation and environmental sustainability. The industry creates about 1000 full time jobs every year. During the period 1997 -2007, the automotive manufacturing sector in Canada relished a period of acute prosperity with all major sectors including production, employment and GDP share began to shrink by the end of 2007 and continued to stand still almost till the beginning of fall in 2009. Although the sector recovered by the end of 2009, facts reported have been relatively low for a couple of years (Automotive News, 2013). The recovery in production and economical contribution or the GDP stand out from the rest in the new car industry.
Structure and Performance
Having served more than 100 years in the automobile manufacturing nation, Canada maintains an outstanding performance track record. The new car industry in particular has a well-to-do infrastructure that includes production team, R&D expertise in machinery parts, raw materials and polished vehicles.
The performance has been such that foreign investors can trust on a strong supply chain and research capabilities in biomaterials, composites, in-built vehicle testing and safety systems and latest power trains. British Colombia is regarded as the fuel cell cluster and offers excellent plant and labor quality to foreign investors and Canadian assembly plants have alone secured a third of all J.D. Power plant quality awards in North American region. Some of the leading companies in British Columbia include Cooperation Corp, Westport, Autoparts Toyota Inc., Ballard Power Systems Inc., Innovations Inc., Canadian; Mercedes-Benz Canada Inc. and Automotive Fuel Cell Cooperation Corp (Jeremy, Cato, 2015).
Industry/Market Growth
The new car industry in British Columbia is the most financially stable market as per the World economic forum. The workforce constitutes of highly educated people a majority of working population with a post-graduation or master’s degree. Furthermore, Canada presents the lowermost business costs with a 15.8 percent price advantage over United States.
Overall, a vibrant R & D environment in Canada promotes collaboration of public-private university for combined research in the automotive sector. Also, the strong and sturdy banking support pours in enough funds to the automotive companies investing in Canada. The flexible financing options and customized banking solutions provided by the Export Development Canada and Business Development Bank of Canada help foreign direct investments in Canada (Jim. Stanford, 2014).
Competitiveness of the industry
While for most industry graduates, hardly does their art degree comes into play for securing them an equivalent job, the automotive industry in B.C. is one such industry is one such sector that provides suitable training to be absorbed by the industry itself to fill in the new job pool. However, despite being one of the most lucrative sectors of all, B.C.’s automotive industry is struggling hard to fill up hundreds of positions every year.
As Blair Qualey, CEO and president of the New Car Dealers Association of B.C puts it- “It’s a huge, huge issue for our members”. The company associates with 350 new car and truck dealers thereby hiring 36,000 new people from within the province.
Considering the average work age of mechanics and car service technicians and the losing workforce in terms of retired people, Qualey estimates that B.C.’s widespread automotive industry will call for 10,000 to 15,000 new employees over next 10 years.
Industry Trend
Of all the new vehicles sold in Canada in 2015, British Columbian’s purchased a little more than 10 percent of all. Yet, the figures accounted for a meagre 16 percent of Canada’s bestseller luxury automobile – BMW 3-series and 17 percent of all Mercedes- Benz B-class wagons that embraced the garage of British Columbia in 2015 (Statistics Canada, 2008).
As trend shows, the natives of British Columbia love their premium quality SUV’s the most. One out of every four SUV’s (BMW and Mercedes Benz ) sold in Canada has a dealership from British Columbia.
Environmental Analysis (PESTEL)
Environment Canada or EC or the legal department under the government of Canada is the entity responsible for managing environmental policies and programs catered to the needs of maintaining natural environment with the help of available resources. International environment issues such as Canada –US air issues also come under the department’s roles (Malatest, R.A & Associates., 2009)
Since 2006, Environment Canada is experiencing a massive transformation in the structure and shifts in delegating responsibilities and decision making to customize policy framework and implementation.
Industry Future Directions
A comprehensive labor force to meet the dire need of skilled labor force in the new car industry across the province is one of the most significant future direction the government should work on. Some labor market partnership programs to strengthen the existing work force and to retain the future manpower will also prove to be helpful in the long run. Other than these, initiatives like outreaching to high school students, creating online platforms for job application, circulating an industry tailored handbook among recent graduates can also be considered as robust future directions in this sector.
References
Jeremy, Cato. (2015, Mar 27). British Columbia’s luxury car boom is in full swing. The Globe and Mail
(2013, Jun 17). Special supplement to automotive news. Automotive News. Top suppliers: North America, Europe and the World.
Greg, Keenan. (2014, Sep 3). Auto sales reach record on ‘flashing green’ indicators. The Globe and Mail
Jim, Stanford. (2014, Apr). Canada’s Auto Industry and the New Free Trade Agreements: Sorting Through the Impacts. New motor vehicle sales Canada, provinces and territories, monthly,
Malatest, R.A & Associates (2009, Nov.). In Motor Vehicle Sales Authority of British Columbia. Retrieved 05.06.2016, from http://mvsabc.com/v1/wp-content/uploads/2015/01/MVSAEnvironmentalScan2009Final.pdf
Statistics Canada. 2008. Earnings and incomes of Canadians over the past quarter century, 2006 Census. Statistics Canada catalogue no. 97-563-XIE2006001. Ottawa. Released May 01, 2008. http://www12.statcan.ca/english/census06/analysis/income/pdf/97-563-XIE2006001.pdf (accessed October, 10, 2008).
BC Stats. Economic Activity: British Columbia and Canada 1991-2008. http://www.bcstats.gov.bc.ca/data/bus_stat/bcea/tab1.asp (accessed September, 18, 2008)
