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back to index backAMERItalk October,  2005

Canada Drives Forth With FDI

Just over a month ago, it was announced that Toyota had selected Woodstock, Ontario as the site for its seventh North American vehicle assembly plant.

The announcement of this US$650m investment was coupled with a declaration of a US$32m expansion of Canadian Autoparts Toyota Inc located in British Columbia.

Toyota's interest in Canada stems from the country's low cost of doing business as well as its abundant skilled labour. Many other automotive companies share the Canadian interest, as last winter General Motors announced an investment of US$2.04bn in the Canadian-based Beacon Project, and Ford is investing US$978m to upgrade its main facility in Oakville, Ontario.

Canada is the third largest exporter of auto products in the world, and holds many advantages over its North American neighbours. A telling point about Canada' overall competitiveness is that Toyota and other auto manufacturers have chosen to produce more vehicles in Canada than they actually sell within the country.

The educated and skilful workforce in Canada is one of its greatest strengths. Canadian workers have been shown to have high levels of formal training and education, a low turnover rate, well developed problem solving abilities, and a great dedication to quality.

Proof of the quality Canadian automotive workforce is the Toyota Motor Manufacturing Canada plant in Ontario, which is the first facility outside of Japan to produce a Lexus” branded product. This came as a result of TMMC being a consistent leader and winner of JD Power initial quality surveys, thanks to its skilled workforce.

When it comes to cost, KPMG has declared that Canada has the lowest cost of doing business in the developed world. KPMG also specifies that, in terms of costs, Canada finishes first in North America for starting up and operating an auto parts manufacturing unit. This comes as a result of Canada's low-cost wages, taxes and operating charges.

To effectively compete and maintain healthy growth over the long term, successful companies in all sectors must reinvent themselves through continuous innovation while maintaining cost competitiveness. This is the Canadian advantage Toyota has tapped into. Source: fDi magazine

Source: fDi magazine - GAI

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