2022 Year in Review

Canada’s automotive sector began the third year of the COVID-19 pandemic with hope, but anti-restriction protesters, a resurgence of the virus and continuing supply-chain disruptions — amplified by Russia’s war on Ukraine — pushed thoughts of a sales recovery far into the future.

Here’s Automotive News Canada’s look back at the year that was …

JANUARY

General Motors was not only restarting its Oshawa Assembly plant for Chevy pickup production, it was also turning the corner on male dominance in automotive manufacturing. Automotive News Canada reported that of the 1,200 workers hired for the restart of the plant, half were women. The company used the restart to reset its workforce and allow diversity to flourish. ••• The industry mourned the death of Linamar founder Frank Hasenfratz, who, starting in 1964, turned a $1,000 lathe into a global auto parts company. The Order of Canada member died Jan. 8 at the age of 86. Linamar is run by daughter Linda Hasenfratz and is worth $5.8 billion. “He was a giant among us,” she said at his funeral on Jan. 15. “A family man, a mentor, a leader. He’ll be immeasurably missed.” ••• Automakers and dealers were bracing for a 2022 that was predicted to look a lot like 2021, when 1.66 million vehicles were sold (a seven-per-cent increase over 2020 sales). Dealers were looking out at empty lots, driven by shortages of critical components, and expected a tough first quarter. ••• It was another bleak year ahead for the country’s auto shows as all were cancelled because of pandemic-related government restrictions.

FEBRUARY

It was over in less than a week, but for six days in February, Canada’s automotive sector was at a standstill. Anti-restriction protesters blockaded the Ambassador Bridge joining Windsor and Detroit, shutting down shipments critical to the automotive industries in Canada and the United States. Estimates of damage to the sector’s economy ranged from $383 million to more than $1 billion, but industry watchers worried the damage would be far more long-term as automakers would be less likely to invest in Canada’s sector for fear of another blockade.

MARCH

General Motors and BASF sparked optimism in Canada’s EV battery industry with two major investments. GM said it would spend $500 million on a battery-materials plant in Bécancour, Que., while BASF, in an unrelated announcement, said it would spend an unspecified amount in the same city. Both plants will produce cathode active materials, an essential element for electric vehicle batteries. ••• Honda announced it would invest $1.4 billion to retool its Alliston, Ont., assembly plant to produce the sixth-generation Honda CR-V and CR-V Hybrid. ••• Ottawa told an antsy auto industry it had no plans to beef up security at border crossings following February’s devastating border blockade.

APRIL

The microchip shortage was driving automakers to prioritize higher-margin vehicles — pickups and luxury vehicles — with what few chips were available, said Sam Fiorani, vice-president, global forecasting at U.S.-based AutoForecast Solutions. As such, fewer affordable vehicles were being built. ••• The $5-billion joint Stellantis-LG Energy Solution battery plant in Windsor, Ont., was hailed as the beginning of an auto revolution that’s likely to trigger a chain of further investments. ••• GM Canada recast its executive suite, shifting President Scott Bell to the United States to lead Chevrolet. Replacing Bell was Marissa West, formerly chief engineer for GM’s global midsize- and medium-duty trucks and vans. ••• The last Chevrolet Equinox utility vehicle rolled off the assembly line at the CAMI plant in Ingersoll, Ont. The conversion was under way to build Brightdrop electric commercial vans.

MAY

Anyone hoping for relief in used-car wholesale and retail prices would have to wait until 2026, according to Canadian Black Book. James Hancock, director of OEM strategy and analytics, expected the shortages that began with plant shutdowns and extended to microchip producers during the pandemic wouldn’t begin to turn around until 2023 at the earliest, and would take another three years to work their way out of the system. ••• Stellantis was plugging its two Ontario plants — Windsor and Brampton — into the electric future. It announced $3.6 billion for retooling and to create R&D centres at each facility. The company said the plants would be “flexible, multienergy vehicle assembly facilities” geared primarily to EVs. The Windsor R&D centre will focus on EVs and battery technology.

JUNE

Dealers and automakers were waving red flags about the impending federal luxury tax that would be applied to vehicles costing more than $100,000. The tax was part of the Liberal government’s commitment to target luxury items such as yachts and private jets in addition to luxury cars. Car dealers said they didn’t have the information to implement the tax, while analysts warned of a sharp downturn in luxury-vehicle sales. ••• Stellantis announced its Windsor plant would build the company’s new EV platform, called the STLA. Retooling was expected to begin in 2023. ••• Dealers said the days of seeing a car on the lot and driving it away the same day were a thing of the past. Most sales had moved to an order-and-wait process that could delay delivery for months, and even years for some models.

JULY

The second quarter of 2022 was billed as a wild ride, with a handful of dealers and automakers making sales gains, but the majority seeing sales plummet. Sales by Stellantis — officially FCA Canada —grew 16.6 per cent to 47,184 vehicles during the quarter, while Honda Canada sales crashed 37.5 per cent to 26,583 vehicles. Analysts had forecasted a period of stagnant sales, but said Russia’s invasion of Ukraine only added to downward pressure. ••• Analysts said that an order-and-wait model for sales could be permanent, as retailers and automakers realize higher margins and lower  — or noexistent — incentives. ••• Canada’s nascent EV industry got another boost as Belgian tech company Umicore announces a $1.5-billion battery materials plant for eastern Ontario, near Kingston.

AUGUST

Canada dodged a potentially lethal blow to the auto industry as an about-face by the U.S. government meant that Canadian-built EVs would qualify for generous incentives the administration was rolling out. Previous plans under President Joe Biden would have restricted incentives to U.S.-built, union-made EVs. ••• Mining companies warned that Canada’s EV industry could stall because of a shortage of nickel. Experts said as many as 60 new mines would be required by 2030 to satisfy demand for lithium ion batteries. ••• The lessor of a Mercedes Benz Metris van lost a $49-billion lawsuit against Mercedes and was fined $70,000 after a judge declared the suit “vexatious.” Mercedes had seized the van and terminated the lease after it was used in a brazen effort to vandalize vehicles on a dealer’s lot.

SEPTEMBER

As the auto industry struggled to get production back to pre-pandemic levels, automakers, parts makers and dealers were struggling to find skilled labour. Canadian parts maker Linamar, with 27,000 employees worldwide, said it had 500 to 700 job openings at any given time. Affected companies were recruiting abroad, mainly from the Philippines and Mexico. ••• Another piece of Canada’s EV industry puzzle fell into place as Volkswagen and Mercedes-Benz announced separate non-binding agreements with the Canadian government to explore Canada’s potential as a source for raw materials and battery production. ••• Canada’s auto show circuit began ramping up for 2023, but not all automakers appeared eager to return.

OCTOBER

In a sign that the auto industry was bouncing back from rock bottom, the Detroit Three automakers surged past 2021 sales. But one dealership group, Winnipeg-based Birchwood Automotive, saw fits and starts in sales rather than a steady climb. Third-quarter sales fell 11.7 per cent to 393,906, but combined D3 sales rose by 17.9 per cent. Analysts saw a turnaround for 2023, if only because sales for the month were so bad. ••• Tropical storm Fiona — the largest to hit Canada — left a trail of destruction through the Maritimes. In the aftermath, the country’s auto industry leapt into action. The region’s Toyota dealers matched Toyota Canada’s $100,000 donation, and Hyundai Canada and its dealers donated $500,000.

NOVEMBER

Ford gave its Canadian dealers a Dec. 16 deadline to decide if they would sell electric vehicles. If they choose to join one of the two programs, they must invest up to $1.3 million per store in training and equipment upgrades. Some dealers said the cost was not justifiable in smaller markets that will have lower volume and be slower on EV uptake. ••• The industry expected to weather a short recession — and rising inflation and interest rates — because demand remained high and shoppers have the cash to buy. ••• Ford’s Oakville Assembly plant had been tagged to build five different EVs as part of a $1.8-billion investment, but the company was expected to build only two — the electric Ford Explorer and the Lincoln Aviator.

DECEMBER

The 2023 auto-show season is a go, but not for everyone. The biggest event, the Canadian International AutoShow in Toronto, is scheduled for February, but Ford dealt a major blow with the announcement in late November that it would not take part in any auto shows in Canada in 2023. The Montreal show is still a go, but events in Calgary, Vancouver and Ottawa have been cancelled because of low automaker support. ••• Canadian auto designer Ralph Gilles was the recipient of the prestigious EyesOn Design award, an honour bestowed by previous winners. Gilles has spent most of his career with Chrysler/FCA/Stellantis and was shaken to “the core” to be recognized. ••• Automotive News Canada announced its 2022 All-Stars, recognizing individuals who went above and beyond in the industry. ••• After a $1-billion retrofit, General Motors’ CAMI plant in Ingersoll, Ont., began building Brightdrop electric commercial vans. CAMI had produced the Chevrolet Equinox compact utility vehicle for years, with the last one rolling off the line in late April. ••• Volkswagen announced it is considering Canada for a battery cell factory. The memorandum of understanding to search for a site followed an August agreement with the federal government to explore the role resources in Canada could play in EV production.