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Canadian Auto Exports to US to Outpace Japan

By Staff writer of The Christian Science Monitor / December 20, 1993



TORONTO

CANADA appears likely to take over as the top exporter of cars and light trucks to the United States in 1993, surpassing Japan for the first time in years, says an association of foreign car manufacturers.

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Last year Canada exported 1.7 million cars and light trucks to the US, compared with Japan's 1.85 million, says Philip Hutchinson, president of the Association of International Automobile Manufacturers. The race has been narrowing for five years, and Canada is expected to exceed Japan when the final figures for this year are in, he says.

``What we see is Canadian exports to the US growing over the last five years, while those from Japan have fallen,'' Mr. Hutchinson says. ``Canada has replaced Japan as the No. 1 exporter to the US.''

Hutchinson, whose group represents 21 Asian and European manufacturers, broached the news of Canada's prospective 1993 export supremacy in a report rebutting assertions by US automakers that there should be further import restrictions.

Canada's high level of exports to the US show that European and Japanese exports are unlikely to significantly injure Detroit's Big Three, Hutchinson says. Most of the Canadian imports are made by Chrysler, Ford, and General Motors in their Canadian plants.

But Canadian and US analysts say direct comparisons between the two countries' export numbers are misleading.

``Two things make Canadian exports totally different,'' says Michael Flynn, associate director of the Office for the Study of Automotive Transportation at the University of Michigan. ``First, the US has a much closer balance of trade in vehicles with Canada than it does with Japan. Canada exports a lot of cars to us, but we send a lot back to Canada. Very few US-made cars go to Japan.''

Although there is a vehicle-trade imbalance between the US and Canada, the US benefits because a large percentage of parts used in building Canadian-assembled cars and trucks are made in the US, Mr. Flynn says.

The shift of production to Canadian auto plants reflects the traditionally close US-Canada relationship in auto manufacturing at work, says Joseph DeCruz of the University of Toronto. ``Automakers have also found Canadian labor is of pretty high quality.'' But any impression that Canadian auto plants are outpacing Japanese factories is false, he adds.

``Canada is a marginally better place to have an assembly operation,'' he says. ``But that hasn't made Canada competitive with the Japanese. In terms of adoption of cutting-edge innovation, the Japanese plants are still the best in the world.''