As American automakers start to pare back their Canadian operations, Ottawa is looking for Chinese companies to step into the breach.
What happened: Industry Minister Mélanie Joly says the federal government is trying to get a Chinese automaker to partner with local auto parts makers on a Canadian manufacturing plant to build EVs for export.
Joly said there are “active conversations” between the government and Chinese automakers on the possibility of a joint venture with Canadian suppliers, Bloomberg reported.
Ottawa-based software developer QNX, a subsidiary of BlackBerry, and auto parts maker Magna, which already has a manufacturing partnership with Chinese EV maker XPeng, were two of the potential Canadian partners named by Joly.
Why it matters: A Chinese automaker setting up shop in Canada would shake up the country’s auto industry and help offset dwindling production by the Big Three in Canada — a recent report found they’re making 1.1 million fewer cars in Canada than they did in 2016.
Joly compared the push to lure Chinese investment to the strategy that attracted Japanese companies, like Honda, to build North American manufacturing plants in the 1980s.
Yes, but: There’s a long road from conversations about manufacturing and actually hiring workers to build vehicles. That’s a process that, even if eventually successful, will take years, while Canada’s auto sector is already imperilled by U.S. trade policy and the possible end of CUSMA.
