{"id":1819,"date":"2022-08-30T18:49:05","date_gmt":"2022-08-30T18:49:05","guid":{"rendered":"https:\/\/leyton.majjane.agency\/ca\/post\/the-changing-automotive-industry\/"},"modified":"2022-08-30T18:49:05","modified_gmt":"2022-08-30T18:49:05","slug":"the-changing-automotive-industry","status":"publish","type":"article","link":"https:\/\/leyton.com\/ca\/en\/insights\/articles\/the-changing-automotive-industry\/","title":{"rendered":"The Changing Automotive Industry"},"content":{"rendered":"<p><strong>Canada is the eleventh largest automotive producer in the world and the seventh largest auto exporter.&nbsp; In 2020, the industry produced 1.4 million vehicles with exports totaling $42.9 billion, making it one of the largest industry sectors in the country, contributing over $16 billion to the GDP. The industry produces passenger vehicles, trucks and buses, auto parts and systems, truck bodies and trailers, machines, tools and dies and molds (<em>MTDM<\/em>).&nbsp; As such, the industry employs more than 125,000 people in vehicle assembly and auto parts <a href=\"https:\/\/leyton.com\/ca\/en\/manufacturing-invest-in-digital-transformation-through-rd\/\" target=\"_blank\" rel=\"noreferrer noopener\">manufacturing<\/a>, and another 380,000 in distribution and aftermarket sales and service.<\/strong><\/p>\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>The industry was hard hit by the pandemic as the disruption in Chinese parts exports escalated into large scale manufacturing interruptions worldwide. The pandemic caused factories to close, but this was compounded by a <strong>surge in chip demand<\/strong> for mobile devices in anticipation of the roll out of 5G technology. The <strong>development in the communication industry boomed<\/strong>, but it negatively impacted chip availability for automotive and industrial applications.&nbsp;<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>In 2021, the industry experienced some recovery with total sales rising by approximately <strong>7% year-over-year<\/strong> as demand picked up and semiconductor revenue began to grow. But new surges in demand such as those brought about by changing consumer habits, together with challenges in chip capacity allocation have resulted in a <strong>global chip shortage in 2021<\/strong>.&nbsp; And, Canadian vehicle production dropped across all segments, despite an increasing demand for cars and trucks. &nbsp;<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>The demand has continued to grow but there is a shift in the industry with an accelerated demand for new technologies, sustainability policies, and increasing demand for electric vehicles. These forces are giving rise to <strong>four disruptive technology-driven trends in the automotive sector:<\/strong><\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<ul class=\"wp-block-list\">\n<li>Diverse mobility<\/li>\n<li>Autonomous driving<\/li>\n<li>Electrification<\/li>\n<li>Connectivity<\/li>\n<\/ul>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>Consumer preferences are changing and with tightening regulations and new <a href=\"https:\/\/leyton.com\/ca\/en\/sred-already-claiming\/\" target=\"_blank\" rel=\"noreferrer noopener\">innovative technology<\/a>, there is a fundamental shift in consumer mobility needs.&nbsp; The society is increasingly using multiple modes of transportation to complete their journey and an increasing number of people rely on ride-sharing and delivery service rather than&nbsp;in-store shopping.&nbsp;As a result, <strong>the automotive industry must provide diverse, on-demand mobility solutions to meet consumer needs.<\/strong><\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>The use of advanced driver-assistance systems (<em>ADAS<\/em>) is on the rise and will play a crucial role in the automotive industry.&nbsp; Autonomous vehicles will offer tremendous value for consumers (for example, the ability to work while commuting, or the convenience of using social media or watching movies while traveling). It is projected that <strong>autonomous cars will account for up to 15% of passenger vehicles sold worldwide in 2030.<\/strong> But the rate of market penetration will be impacted by pricing, consumer understanding, and safety\/security issues, so technology players must <a href=\"https:\/\/leyton.com\/ca\/en\/sred-already-claiming\/\" target=\"_blank\" rel=\"noreferrer noopener\">innovate <\/a>to address these concerns.<\/p>\n<div style=\"height:29px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/leyton.com\/ca\/wp-content\/blogs.dir\/3\/files\/2022\/08\/Banner-Automotive-industry-1024x349.png\" alt=\"\" class=\"wp-image-17532\"\/><\/figure>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>As the industry undergoes these changes, coupled with the increasing speed of innovation, especially in <a href=\"https:\/\/leyton.com\/ca\/ict-companies\/\">software-based systems<\/a>, cars will be required to be upgradable. The need for shared mobility solutions with shorter life cycles will become more common as consumers will be constantly aware of technological advances, which will further increase demand for upgradability in privately used cars as well. Additionally, connectivity and autonomous technology will increasingly allow the car to become a platform for drivers and passengers to use their time in transit to consume different <a href=\"https:\/\/leyton.com\/ca\/en\/tax-credits\/multimedia-tax-credit-expand-your-creativity\/\" target=\"_blank\" rel=\"noreferrer noopener\">forms of media<\/a> and services or dedicate the freed-up time to other personal activities.<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>These demands <strong>must be paired with <a href=\"https:\/\/leyton.com\/ca\/en\/sustainability-invest-in-your-clean-technology-projects\/\" target=\"_blank\" rel=\"noreferrer noopener\">sustainable solutions<\/a><\/strong> as societal practices change. The transportation sector is responsible for 27 percent of greenhouse gas (<em>GHG<\/em>) emissions in Canada. Light-duty vehicles \u2013 the cars, vans and light-duty trucks we drive &#8211; are responsible for almost half of that total. Automakers have made significant advances in some areas, but CO2, the main GHG that impacts climate change is steadily increasing. Given the current technology, this is unavoidable so, since GHG is a by-product of the burning of fossil fuels.&nbsp;<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>To combat climate change, <strong>the government of Canada has launched the &#8220;<em>Net-Zero Emissions<\/em>&#8221; by 2050 initiative<\/strong>, with interim goal of 40 percent reduction below 2005 levels by 2030.&nbsp; What this means is that, we are working towards zero GHG emissions by 2050. This initiative is not only directed to the automotive industry, but to all sources of GHG emission, but for this discussion we will focus on the automotive industry since it contributes just over one quarter of all GHG emissions. The government is very aware of this fact and has taken steps to assist Canadians to reach this goal and key measures were released in the 2022 budget.<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>The measures proposed in Budget 2022 includes:<\/p>\n<ul class=\"wp-block-list\">\n<li>Building a national network of electric vehicle charging stations by supporting charging infrastructure in communities of all sizes through $500 million in investments by the Canada Infrastructure Bank as well as $400 million for the <em>Zero Emission Vehicle Infrastructure Program<\/em>, toward our goal of adding 50,000 charging stations across the country.<\/li>\n<li>Helping more Canadians get behind the wheel of ZEVs by continuing to provide purchase incentives of up to $5,000 through investing $1.7 billion to extend the Incentives for <em>Zero-Emission Vehicles Program <\/em>until March 2025 and broadening eligibility under the program to include more vehicle models.<\/li>\n<li>Making it easier to buy a ZEV through a new, mandatory sales target so that when people go to purchase a ZEV, there are options for sale on the lot. At least 20 per cent of all new passenger vehicles sold in Canada will be ZEVs by 2026, and at least 60 per cent by 2030, on the road to 100 per cent by 2035.<\/li>\n<li>Helping businesses switch to medium- and heavy-duty zero-emission vehicles by investing $547.5 million to launch a new purchase incentive program.<\/li>\n<li>Positioning Canada as a global leader on critical minerals, which are essential to build ZEVs by providing up to $3.8 billion for <strong>Canada\u2019s first Critical Minerals Strategy.<\/strong><\/li>\n<\/ul>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/leyton.com\/ca\/wp-content\/blogs.dir\/3\/files\/2022\/08\/Canada-automotive-industry-1-1024x349.png\" alt=\"\" class=\"wp-image-17629\"\/><\/figure>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>Budget 2022 and the recently released <em>2030 Emissions Reduction Plan<\/em>, are major contributors to Canada\u2019s next steps for clean air and a strong economy. By putting Canadians in the driver\u2019s seat of zero-emission cars and trucks, the government will help people save on gas, while <strong>fighting climate change, grow our economy, and build a better future for everyone.&nbsp;<\/strong><\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>Traditional automotive players are under continuous pressure to reduce costs, improve fuel efficiency, electrify and reduce emissions in the evolving automotive and mobility industries. <strong>Vehicles are increasingly integrated into the connected world<\/strong> and automakers will have no choice but to participate in the new mobility ecosystems that emerge as a result of technological and consumer trends. Software developers and OEMs need to align their skills and processes to address new challenges like <strong><a href=\"https:\/\/leyton.com\/ca\/ict-companies\/\">software-enabled<\/a> consumer value, cybersecurity, data privacy, and continuous product updates.<\/strong><\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>Additionally, the automotive ecosystem must quickly address three major constraints before EV production and sales can gain scale:<\/p>\n<ul class=\"wp-block-list\">\n<li>Difficulties sourcing enough raw materials, including lithium, nickel, and cobalt, used in batteries<\/li>\n<li>An insufficient number of gigafactories that produce batteries, as well as low productivity within existing facilities<\/li>\n<li>A public charging infrastructure that must be built up to keep pace with the number of EVs on the road<\/li>\n<\/ul>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>But there is help, under the <em>Net-Zero Emissions by 2050<\/em> initiative,&nbsp; <strong>the government has launched several <a href=\"https:\/\/leyton.com\/ca\/en\/sustainability-invest-in-your-clean-technology-projects\/#\" target=\"_blank\" rel=\"noreferrer noopener\">incentive programs<\/a> to fund projects that contribute to these goals<\/strong>. These include:<\/p>\n<ul class=\"wp-block-list\">\n<li>design, development and installation of charging station<\/li>\n<li>development of clean fuel<\/li>\n<li>The capture, storage and utilization of CO2<\/li>\n<li>development of innovative batteries, <a href=\"https:\/\/leyton.com\/ca\/ict-companies\/\">software, <\/a>and more.&nbsp;<\/li>\n<\/ul>\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>At Leyton, we have the expertise to assist all industry players to navigate the changing landscape in a cost efficient way, utilizing many of the government grants and incentives to make your project a reality sooner.&nbsp; The <a href=\"https:\/\/leyton.com\/ca\/en\/government-grants\/\" target=\"_blank\" rel=\"noreferrer noopener\">Grants department<\/a> will walk alongside you throughout the entire process, whether your project is in the <a href=\"https:\/\/leyton.com\/ca\/en\/sred-already-claiming\/\" target=\"_blank\" rel=\"noreferrer noopener\">R&amp;D stage<\/a>, looking commercialization, ready to export or expanding market shares.&nbsp;<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p><strong>If you want to know more about our sales tax services, reach out to our experts today.<\/strong><\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<div class=\"wp-block-buttons\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/leyton.com\/ca\/en\/contact-us\/\" target=\"_blank\" rel=\"noreferrer noopener\">Contact us!<\/a><\/div>\n<\/div>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<p>Sources :<\/p>\n<ul class=\"wp-block-list\">\n<li>Canadian Vehicle Manufacturers&#8217; Association &#8211; Important Facts- <a href=\"https:\/\/www.cvma.ca\/industry\/facts\/\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.cvma.ca\/industry\/facts\/<\/a><\/li>\n<li>Automotive industry in Canada &#8211; statistics &amp; facts <a href=\"https:\/\/www.statista.com\/topics\/7792\/automotive-industry-in-canada\/#dossierKeyfigures\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.statista.com\/topics\/7792\/automotive-industry-in-canada\/#dossierKeyfigures<\/a><\/li>\n<li>Links between fuel consumption, climate change, our environment and health &#8211; <a href=\"https:\/\/www.nrcan.gc.ca\/energy\/efficiency\/communities-infrastructure\/transportation\/idling\/4419\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.nrcan.gc.ca\/energy\/efficiency\/communities-infrastructure\/transportation\/idling\/4419<\/a><\/li>\n<li>Global chip shortage 2022 &#8211; statistics &amp; facts &#8211; <a href=\"https:\/\/www.statista.com\/topics\/7797\/global-chip-shortage\/#dossierKeyfigures\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.statista.com\/topics\/7797\/global-chip-shortage\/#dossierKeyfigures<\/a><\/li>\n<li>The Future of Mobility is at our doorstep- <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Industries\/Automotive%20and%20Assembly\/Our%20Insights\/The%20future%20of%20mobility%20is%20at%20our%20doorstep\/The-future-of-mobility-is-at-our-doorstep.ashx\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Industries\/Automotive%20and%20Assembly\/Our%20Insights\/The%20future%20of%20mobility%20is%20at%20our%20doorstep\/The-future-of-mobility-is-at-our-doorstep.ashx<\/a><\/li>\n<li>Automotive revolution \u2013 perspective towards 2030 &#8211; <a href=\"https:\/\/www.mckinsey.com\/~\/media\/mckinsey\/industries\/automotive%20and%20assembly\/our%20insights\/disruptive%20trends%20that%20will%20transform%20the%20auto%20industry\/auto%202030%20report%20jan%202016.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.mckinsey.com\/~\/media\/mckinsey\/industries\/automotive%20and%20assembly\/our%20insights\/disruptive%20trends%20that%20will%20transform%20the%20auto%20industry\/auto%202030%20report%20jan%202016.pdf<\/a><\/li>\n<li>Automotive revolution \u2013 perspective towards 2030 &#8211; <a href=\"https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/disruptive-trends-that-will-transform-the-auto-industry\/de-DE\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/disruptive-trends-that-will-transform-the-auto-industry\/de-DE<\/a><\/li>\n<li>Can the automotive industry scale fast enough? &#8211; <a href=\"https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/can-the-automotive-industry-scale-fast-enough\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.mckinsey.com\/industries\/automotive-and-assembly\/our-insights\/can-the-automotive-industry-scale-fast-enough<\/a><\/li>\n<li>Helping more Canadians drive electric vehicles &#8211; <a href=\"https:\/\/pm.gc.ca\/en\/news\/news-releases\/2022\/04\/11\/helping-more-canadians-drive-electric-vehicles\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/pm.gc.ca\/en\/news\/news-releases\/2022\/04\/11\/helping-more-canadians-drive-electric-vehicles<\/a><\/li>\n<li>Net-Zero Emissions by 2050 &#8211; <a href=\"https:\/\/www.canada.ca\/en\/services\/environment\/weather\/climatechange\/climate-plan\/net-zero-emissions-2050.html\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/www.canada.ca\/en\/services\/environment\/weather\/climatechange\/climate-plan\/net-zero-emissions-2050.html<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Canada is the eleventh largest automotive producer in the world and the seventh largest auto exporter.&nbsp; In 2020, the industry produced 1.4 million vehicles with exports totaling $42.9 billion, making it one of the largest industry sectors in the country, contributing over $16 billion to the GDP. The industry produces passenger vehicles, trucks and buses, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2486,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[222,296,110,124],"tags":[232,2496,574,114,2497,115,557],"expertise":[774],"class_list":["post-1819","article","type-article","status-publish","format-standard","has-post-thumbnail","hentry","category-grants","category-manufacturing","category-sred","category-sustainability","tag-funding","tag-government","tag-grants","tag-innovation-en","tag-net-zero-en","tag-sred-en","tag-sustainability","expertise-sred-tax-credits"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.1 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The Changing Automotive Industry - Leyton Canada<\/title>\n<meta name=\"description\" content=\"The automotive industry in Canada is facing a lot of changes that requires innovative solutions. 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