Changes in the Automotive Industry in Canada

Auto exports from Canada rank seventh in the world, and the country is the eleventh largest auto manufacturer.

FREMONT, CA: The pandemic severely impacted the sector, as the disruption in Chinese component exports developed into large-scale global industrial shutdowns. The introduction of 5G technology led to a surge in chip demand for mobile devices, exacerbated by pandemic-related plant closures. The growth of the communication industry has a negative effect on the availability of chips for automotive and industrial applications.

In 2021, the sector began to recover, with total sales increasing roughly 7 percent year-over-year as demand increased and semiconductor revenue began to rise. In 2021, however, there will be a global chip shortage due to fresh spikes in demand, such as those brought on by shifting consumer preferences and allocation difficulties. Moreover, despite a growing demand for cars and trucks, the manufacturing of vehicles in Canada decreased across the board.

The market has continued to increase, but there has been a shift in the business, characterized by a heightened desire for new technology, sustainability rules, and electric automobiles. These factors are spawning four disruptive technological advances in the automotive industry—diverse mobility, autonomous driving, electrification, and connectivity.

Customers' preferences, stricter restrictions, and more innovative technologies are causing a fundamental shift in consumer mobility needs. Increasing numbers of consumers rely on ride-sharing and delivery services rather than in-store purchasing, as society increasingly utilizes several means of transportation to accomplish their journeys. As a result, the automotive sector must supply various mobility solutions on demand to satisfy consumer demands.

The adoption of advanced driver-assistance systems (ADAS) is growing and will play a significant role in the automobile industry. Consumers will receive significant benefits from autonomous automobiles. In 2030, autonomous vehicles will account for up to 15 percent of all passenger vehicles sold worldwide. But pricing, customer comprehension, and safety/security concerns will affect the market penetration rate; therefore, technology companies must innovate to meet these issues.

Cars will be required to be upgradable as the industry undergoes these changes and the rate of innovation, especially in software-based systems, increases. As customers become increasingly aware of technology advancements, the need for shared mobility solutions with shorter life cycles will increase, as will the requirement for upgradability in privately owned used vehicles. The car will also become a platform for drivers and passengers to consume various media and services or engage in other personal activities while in transit, thanks to connectivity and autonomous technology.

As societal norms evolve, these requirements must be met with sustainable solutions. Canada's transportation industry is accountable for 27 percent of greenhouse gas (GHG) emissions. Light-duty vehicles, such as automobiles, vans, and light-duty trucks, account for over half of this total. Automakers have made tremendous strides in certain areas, but CO2, the primary greenhouse gas that contributes to climate change, is continually rising. As GHG is a byproduct of the combustion of fossil fuels, this is inescapable with the technologies available today.

The Canadian government is striving to reduce emissions by 40 percent below 2005 levels by 2030 as part of its "Net-Zero Emissions" plan by 2050. This indicates that the Canadian automotive industry aims for zero greenhouse gas emissions by 2050.

Traditional automotive manufacturers are under constant pressure to decrease costs, increase fuel efficiency, electrify, and reduce emissions in the automotive and mobility industries, which are undergoing rapid change. As a result of technology and consumer trends, manufacturers will have little choice but to join in the new mobility ecosystems that arise due to the rising connectivity of vehicles. Software developers and original equipment manufacturers must match their talents and procedures to meet new concerns like software-enabled customer value, cybersecurity, data privacy, and continual product updates.