2. jerry suyavong canada auto industry 2013 - for pro export colombia

1
The Canadian Automotive Sector
Overview and Competitive Advantages
Jerry Suyavong
President, M.E. International Inc.
Vice President, Linear Transfer Automation Inc.
ProExport Colombia Seminar July 23, 2013

2© 2013 Jerry Suyavong – Confidential Disclosure or duplication without consent is prohibited.
TABLE OF CONTENTS
1. Canada Automotive Industry Overview
2. Competitive Advantage
3. Automotive R&D Centre
4. Next Generation Vehicles
5. Outlook, Challenges and Opportunities

Snapshot of Canada’s Auto Sector
● Manufacturing – Canada produces passenger and
commercial vehicles, auto parts and systems, truck bodies
and trailers, as well as machines-tools-dies-moulds (MTDM)
and tires
● Automotive is the largest manufacturing sector in Canada.
In 2012 it accounted for:
• 10% of manufacturing GDP
• $80.4 billion in revenues
• 115,025 in direct employment
• 21% of merchandise trade
• 16% of NAFTA vehicle production (2.45 million units)
● Highly concentrated in Ontario; also in Quebec, Manitoba
and B.C.
● Very export intensive (three-quarters of annual output)

• Assembly: 19 passenger and commercial vehicle plants, 37,155 employed
• 87% exported,16.5% of North American vehicle production over the last 5 years
• 2.45M vehicles produced in 2012
• Auto parts: ~10% of North American parts shipments
• ~350 automotive parts plants, including leading Canadian parts supplier and
large Multinationals
• ~300 Tool, Die and Mould makers
• 1,240 facilities, 64,305 employed, $27.5 billion revenues, 46% exported
• Key Inputs & Services: Reliable access to raw materials, such as, steel, metals,
plastics, alternative materials, as well as business services and automotive sales
and service
Snapshot of Canada’s Auto Sector

Vehicle Assembly Locations

Parent Plant / Location Products
Chrysler
[FIAT]
Brampton Assembly Plant (Brampton ON)
Chrysler 300/300C; Dodge Charger and Challenger;
Lancia Thema
Windsor Assembly Plant (Windsor ON)
Chrysler Town & Country; Dodge Grand Caravan; Lancia
Voyager; Ram Cargo Van
Ford Oakville Assembly Complex (Oakville ON) Ford Edge and Flex; Lincoln MKX and MKT
GM
CAMI Automotive (Ingersoll ON) Chevrolet Equinox (2010MY) and GMC Terrain (2010MY)
Oshawa Car Plants 1-2 (Oshawa ON)
Buick Regal and Regal eAssist; Cadillac XTS; Chevrolet
Camaro, Equinox and Impala
Honda HCM Plants 1-2 (Alliston ON) Acura MDX and ZDX; Honda Civic and CR-V
Toyota
North and South Plants (Cambridge ON) Toyota Corolla and Matrix; Lexus RX 350
West Plant (Woodstock ON) Toyota RAV4 and RAV4 EV
Assembly Plants in Canada
Parent Plant / Location Products
Blue Bird Micro Bird (Drummondville PQ) Type A school buses
Hino [Toyota] Hino Motors Canada (Woodstock ON) Class 4-7 trucks (CKD)
Lion Bus Lion Bus Inc. (St. Jerome PQ) Type C school buses
MCI MCI International (Winnipeg MB) intercity buses
New Flyer New Flyer Industries Canada (Winnipeg MB) urban transit buses
PACCAR PACCAR of Canada (Ste. Therese PQ) Class 6-7 trucks
Volvo Bus
Nova Bus Corporation (St. Eustache PQ) urban transit buses
Prévost Car (Ste. Claire PQ) intercity buses
LightVehiclesHeavyTrucks
andBuses

Exceptional Quality and Productivity
J.D. Power Plant Quality Awards
1990 Toyota Cambridge (Gold)
1992 Toyota Cambridge (Silver)
1993 Toyota Cambridge (Bronze)
1994 Ford St. Thomas (Silver)
1996 Toyota Cambridge (Gold), Honda Alliston (Silver)
1998 Ford St. Thomas (Gold)
1999 GM Oshawa 1 (Bronze)
2000 Toyota Cambridge (Bronze)
2002 GM Oshawa 2 (Gold)
2003 GM Oshawa 1 (Gold)
2005 GM Oshawa 2 (Gold), GM Oshawa 1 (Silver)
2006 GM Oshawa 2 (Gold), Chrysler Windsor (Silver)
2007 GM Oshawa 2 (Silver)
2009 GM Oshawa 1 (Silver)
2011 Toyota Cambridge (Platinum)
2012 Toyota Cambridge (Gold) + Woodstock (Bronze)
● The J.D. Power & Associates Initial Quality
Awards are the auto industry‟s benchmark
for new vehicle quality manufacturing
● Canadian assembly plants have won one-
third of all J.D. Power plant quality awards
for North America, which is double Canada‟s
share of regional production
● Twenty-one J.D. Power & Associates Initial
Quality Awards have been presented to
Ontario plants since 1990
● The only Toyota plant outside Japan to
produce Lexus vehicles is in Canada
● Also home to the production of luxury
vehicles by Acura, Cadillac and Lincoln.

Canadian Vehicle Production
OEM 2007 2008 2009 2010 2011 2012
GM 964,239 589,323 347,363 529,568 661,884 683,058
Chrysler 534,774 479,046 314,504 475,382 496,081 585,923
Toyota 302,749 287,395 319,547 458,729 412,829 519,215
Honda 390,580 383,011 259,796 278,366 254,051 409,849
Ford 349,808 306,764 237,952 320,608 320,396 255,924
Total 2,542,150 2,045,539 1,479,162 2,062,653 2,145,241 2,453,969
Country 2007 2008 2009 2010 2011 2012
NORTH AMERICA 15,102,752 12,616,916 8,626,384 11,954,843 13,153,240 15,449,563
Canada 2,542,150 2,045,539 1,479,162 2,062,653 2,145,241 2,453,969
Mexico 2,006,871 2,060,921 1,526,257 2,257,617 2,551,771 2,874,460
United States 10,553,731 8,510,456 5,620,966 7,634,573 8,476,228 10,121,034

Ontario has been NAFTA’s Leading Sub-National
Jurisdiction for Vehicle Assembly since 2004
Vehicle Production by Top 6 Sub-National NAFTA Jurisdiction (units)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: Wards Automotive
Ontario
Michigan
Ohio
Indiana
Kentucky
Alabama

Part of a Huge North American Market
0
5
10
15
20
25
2007 2008 2009 2010 2011f 2012f 2013f 2014f 2015f 2016f 2017f
Mexico
U.S.
Canada
Motor Vehicle Sales in North America
(in millions of units)
Forecast
Source: Industry Canada, from IHS | CSM Worldwide
Note: Figures include passenger and commercial vehicles
● Canada is part of a fully integrated North
American market with annual sales of 20
million units, normally
● Although the U.S. market collapsed in
2008-09, sales have started to recover and
should return to peak levels by 2013
● Lost production is being restored, and North
America should remain one of the world‟s
largest and most lucrative automotive
markets
● The N.A. Free Trade Agreement (NAFTA)
ensures duty-free trade for originating
goods throughout the region

Top 15 Countries
Light Vehicle Production & Global Ranking
Country 2012 Rank Country 2017 Rank
China 18,298,986 1 China 27,001,903 1
United States 10,121,034 2 United States 11,563,208 2
Japan 9,544,740 3 Japan 8,774,997 3
Germany 5,586,276 4 India 6,000,000 4
South Korea 4,480,015 5 Germany 5,429,028 5
India 3,851,575 6 South Korea 4,475,000 6
Brazil 3,172,783 7 Brazil 4,376,875 7
Mexico 2,886,788 8 Mexico 3,651,916 8
Canada 2,454,069 9 Thailand 3,000,000 9
Thailand 2,312,489 10 Russia 2,569,699 10
Russia 2,078,368 11 Spain 2,261,628 11
Spain 1,939,352 12 Canada 2,084,876 12
France 1,926,863 13 France 2,007,828 13
United Kingdom 1,563,734 14 United Kingdom 1,548,521 14
Czech Republic 1,113,559 15 Czech Republic 1,323,577 15
Top 15 Total 71,330,631 Top 15 Total 86,069,056
Major Market Total 78,556,570 Major Market Total 94,730,000
Top 15 % 90.8 Top 15 % 90.9
BRIC 27,401,712 BRIC 39,948,477
BRIC % 34.9 BRIC % 42.2
Source – Wards/AMIP/AutomotiveCompass (Brazil, Russia, India, China)

Top 15 Global Brands
Light Vehicle Production & Global Ranking
Brand Owner 2012 Rank Brand Owner 2017 Rank
Volkswagen 9,218,940 1 Volkswagen 10,497,562 1
Toyota Motor 8,648,879 2 Renault/Nissan 9,481,705 2
General Motors 8,127,929 3 Toyota Motor 9,238,350 3
Renault/Nissan 7,654,459 4 General Motors 8,914,736 4
Hyundai Motor 7,177,294 5 Hyundai Motor 7,709,046 5
Ford Motor 5,613,074 6 Ford Motor 7,039,180 6
Fiat-Chrysler 4,249,527 7 Honda Motor 5,090,754 7
Honda Motor 3,913,446 8 Fiat-Chrysler 4,968,593 8
PSA/Peugeot-Citroen 2,820,247 9 PSA/Peugeot-Citroen 3,296,780 9
BMW 1,864,422 10 BMW 2,115,224 10
Daimler 1,851,783 11 Daimler 2,111,693 11
SAIC-GM-Wuling 1,471,397 12 Maruti Suzuki 1,698,155 12
Mazda Motor 1,314,700 13 SAIC-GM-Wuling 1,641,764 13
Suzuki Motor 1,265,603 14 Mazda Motor 1,625,226 14
Maruti Suzuki 1,220,408 15 Suzuki Motor 1,605,369 15
Top 15 Brands 66,412,108 Top 15 Brands 77,034,137
Major Market Total 78,556,570 Major Market Total 94,730,000
Top 15 % 84.5 Top 15 % 81.3
Source – Wards/AMIP/AutomotiveCompass

COMPETITIVE
ADVANTAGE

● The N.A. Free Trade
Agreement integrates Canada
into a market with annual sales
of 20 million vehicles.
● No tariffs on OE parts imported
into Canada (vs 2.5% tariff in
the U.S.)
● Canada and the U.S. are
actively expanding border
capacity.
Los Angeles
Detroit/Windsor
Chicago
Atlanta
Seattle
Miami
Mexico City
800 km
400 km
CANADA
U.S.A.
MEXICO
Montreal
Toronto
Part of an Integrated North American Market

Canada is Strategically Located
© Automotive News
● There are 37 high-volume assembly
plants within a 500 km radius of the
Windsor-Detroit border. These plants
produced 7.2 million vehicles in 2012.
● Canada is also close to all major
automotive R&D centres in Michigan
and Ohio.

139 Million Consumers within a Day’s Drive
Daily Two-way Goods Trade between Ontario-USA for 2011 Valued at C$716 million
Sources: Industry Canada, Statistics Canada and US Census Bureau

Low Import Tariffs
Source: Finance Canada. The Federal Budget, and World Trade Organization. Trade Profiles.
$2.8
$1.9
$3.0
$1.7
$1.2
$4.3
$0.0$0.0$0.0
Transport equipment Electrical machinery Non-electrical machinery
Average Applied MFN Tariffs On $100 Million In Imports
$ millions

35.8%
34.8%
34.4%
32.9%
31.5%
28.0%
25.0%
37.4%
36.9%
36.6%
36.2%
36.0%
36.1%
Indiana
Ohio
Great Lakes States
Illinois
Tennessee
Kentucky
Georgia
Michigan
Alabama
Texas
Ontario (2008)
Ontario (in 2010)
Ontario (in 2012)
2010 Combined Federal and State/Provincial
Competitive Corporate Taxes on Manufacturing

Corporate Income Tax Rates on Manufacturing
2011 2012
Federal 16.5% 15.0%
Ontario 10.0% 10.0%
Combined 26.5% 25.0%

Accelerated Capital Cost Allowance
• Manufacturing and Processing Equipment (M&P):
Since 2007, the depreciation rate for eligible M&P equipment
has been temporarily increased to a 50% straight line rate
(Class 29 as defined by the Canada Revenue Agency) for
eligible machinery and equipment purchased after March 18,
2007 and before 2014.
• Companies who locate in Ontario can take advantage of this
generous rate of write-off for capital expenditures in
manufacturing or processing machinery and equipment each
year up to the end of 2013.
• ACCA claims can be deferred indefinitely to subsequent years.

Accelerated Capital Cost Allowance
Asset Class Eligible Allowance Depreciation Rate Depreciation Method “Half-Year” Rule
43
Capital Cost Allowance
(CCA)
30% Declining Balance Yes
29
Accelerated Capital
Cost Allowance
(ACCA)
50% Straight Line Yes
ACCA Benefits
 Allows business to completely depreciate qualified capital cost over a three year period.
 Provides additional cash flow in the three years following the capital expenditure by
reducing the taxable income.
 Provides higher return on capital in the long term.

 The Ontario government offers Training Tax Credits to
encourage employers to hire and train apprentices and
workers in specific skilled trades.
 Ministry of Training, Colleges and Universities:
 Apprenticeship Training Tax Credit: Maximum $10,000 per apprentice over 48 months.
 Employer Signing Bonus: $2,000 signing bonus if a new apprentice is registered.
 Employment Ontario: Wage incentives and other recruitment support.
 Ontario Youth Apprenticeship: School to work transition program.
 Ministry of Finance:
 Co-op Education Tax Credit: Refundable tax credit of up to $3,000 per placement.
Training Tax Credits in Ontario

• Corporate Tax Reform: The government‟s comprehensive tax package is providing $4.8
billion in overall tax relief over three years, including CIT cuts that started July 1, 2010:
- The general Corporate Income Tax (CIT) rate was lowered from 14 per cent to 12 per cent
- The CIT rate for manufacturing and processing was lowered from 12 per cent to 10 per cent
• Infrastructure Investment: Support for Detroit-Windsor gateway, including the Detroit River
International Crossing and the Windsor-Essex Parkway to ensure people and goods move
safely and efficiently through the US-Canada border
Tax Rates & Other Support for the Auto Industry

US
55%
China
6%
France
5%
UK
4%
Japan
4%
Other
19%
Germany
7%
Foreign direct investment projects in Ontario, by source country, 2011
Source: FDI Intelligence, March 2012
For example, Ontario Attracts Investors from
Many Countries

AND ... Ontario is Home to the Majority of
Foreign-Controlled Head Offices in Canada
Foreign Head Office Distribution in Canada, 2011
Rest of
Canada
40% Ontario
60%
Source: Statistics Canada

AUTOMOTIVE INTERIORS
ABC Group
AGS Automotive Systems
Aisin Canada
ArcelorMittal Tubular
Bend All
Brose Canada
Canadian General-Tower Limited
Commercial Spring and Tool Co.
DBG
Enstel Manufacturing Inc.
Exco Technologies Limited
Falcon Tool & Die (1979) Ltd.
Freeway Washer Limited
H. Paulin & Co. Ltd.
Hayashi Canada Inc.
Hematite Manufacturing
Invotronics
JYCO Sealing Technology
Lear Canada
Magna International Inc.
Martinrea International Inc.
Marwood Metal Fabrication
Matcor Automotive Inc.
MetriCan Stamping Co. Inc.
Mitchell Plastics
Omron Dualtec Automotive Inc.
Papp Plastics
PlasmaTreat North America Inc.
Salflex Polymers Ltd.
Samuel Automotive
Schukra Of North America Ltd.
Sealed Air (Canada) Co./Cie.
Stahlschmidt Cable Systems
The NARMCO Group
The Woodbridge Group
Tiercon
TG Minto Corp.
Toyota Boshoku Canada
TS Tech
Van-Rob Inc.
Vari-Form
Velcro Canada Inc.
Windsor Mold Group
Woodstock Stampings Inc.
PRODUCTION HANDLING
ABB Inc.
ODG Group
Panasonic Canada Inc.
Schaefer Systems Inc.
Schenker DB Logistics
SEW Eurodrive
The NARMCO Group
Valiant Tool & Mold Inc.
AUTOMOTIVE EXTERIORS
3M
ABC Group
Amino North America Corp.
Essar Steel Algoma Inc.
ArcelorMittal
Canadian General-Tower Ltd.
DBG
Delhi-Solac Inc.
F&P Manufacturing Inc.
Flex N Gate
Henkel Canada Corporation
KSR International Inc.
Lanex Manufacturing Inc.
Maxtech Manufacturing Inc.
ODG Group
PPG Canada
Quality Safety Systems Company
Salflex Polymers Ltd.
Samuel Automotive
Sinteris
The Butcher Engineering Limited
The NARMCO Group
Tiercon
Trimont Manufacturing Inc.
Van-Rob Inc.
Vari-Form
Warren Industries
WEGU Manufacturing
Windsor Mold Group
HVAC
ABC Group
Burlington Technologies Inc.
DANA Corporation
Linamar Corporation
Nichirin Incorporated
COMFORT & CONVENIENCE
ABC Group
DBG
QNX Software Systems
Van-Rob Inc.
Vari-Form
Windsor Mold Group
PRODUCTION CONTROL EQUIPMENT
AUTOMATION & DESIGN
ABC Group
ABB Inc.
Altair Engineering Canada, Ltd.
Applied Precision Inc.
Armada Toolworks Ltd.
Bend All
Cannon Automotive Solutions
Centreline
Clover Tool Mfg. Ltd.
DBG
Engineered Solutions Corp. (ESC)
FANUC Robotics Canada Ltd.
Giffels Associates Limited/IBI Group
Husky Injection Molding
Huzura Manufacturing Ltd.
Logikor
ODG Group
OES, Inc.
Omega Tool
Panasonic Canada Inc.
PricewaterhouseCoopers LLP
RWDI AIR Inc.
Sanyo Canadian Machine Works
Schenker DB Logistics
Siemens PLM Software (CA) Ltd.
Solarsoft Business Systems
Tech Con Automation
The NARMCO Group
Tutelar Technologies
Van-Rob Inc.
Vari-Form
Windsor Mold Group
CHASSIS
ABC Group
Bend All
Canadian Autoparts Toyota Inc.
DANA Corporation
DBG
DYNA-MIG Manufacturing Inc.
Electromac Group
Flex N Gate
Global Technologies
Jefferson Elora Corporation
Kautex-Textron
Kumi Canada Corp.
Linamar Corporation
MMSC Canada
Musashi Auto Parts Canada Inc.
ODG Group
Sanoh Canada Ltd.
Showa Canada Inc.
Sinteris
Toyotetsu Canada Inc.
The NARMCO Group
Van-Rob Inc.
Vari-Form
Wescast Industries Inc.
Windsor Machine & Stamping
Windsor Mold Group
Woodbine Tool & Die
BRAKING
CTS Systems
DANA Corporation
DYNA-MIG Manufacturing Inc.
Linamar Corporation
Sinteris
COMMUNICATION
& INFORMATION
ABC Group
DBG
Tutelar Technologies
Van-Rob Inc.
Vari-Form
Windsor Mold Group
POWERTRAIN
ABC Group
Bend All
D & V Electronics Ltd.
DANA Corporation
DBG
Electrovaya
Freudenberg-NOK Inc.
Invotronics
Linamar Corporation
Musashi Auto Parts Canada Inc.
NTN Bearing Mfg Canada
Sinteris
The NARMCO Group
UltraFit Manufacturing
Van-Rob Inc.
Vari-Form
Zenn Motor Company
AIR INTAKE / EXHAUST SYSTEMS
ABC Group
DBG
Huarong Purification Inc.
Linamar Corporation
THE NARMCO GROUP
Van-Rob Inc.
Wescast Industries Inc.
Windsor Mold Group
ENGINE MANAGEMENT
Invotronics
Zenn Motor Company
TRAINING
ABB Inc.
Engineered Solutions Corp. (ESC)
HumberCollege
Ontario Centres of Excellence
The PIC Group
RWDI AIR Inc.
ECONOMIC DEVELOPMENT
Canada's Automotive Corridor
Canada's Technology Triangle Inc.
City of Brantford
City of Hamilton
Durham Region
Greater Toronto Marketing Alliance
London Economic Development Corp.
Municipality of Chatham-Kent
Niagara Economic Development Corp.
Regional Municipality of Halton
Sarnia-Lambton Economic Partnership
South Western Ontario Marketing Alliance
WindsorEssex Economic Development
EDUCATION & RESEARCH
Advanced Design &
Manufacturing Institute (ADMI)
AUTO21 Inc.
CON*NECT
Conestoga College
Georgian College
Humber College
McMaster University-MAC Auto
Mohawk College
Ontario Centres of Excellence
Seneca College of Applied Arts &
Technology
University of Waterloo - WatCAR
University of Windsor
MANUFACTURING MACHINERY,
TOOLS & EQUIPMENT
ABB Inc.
DBG
Electromac Group
Flex N Gate
The NARMCO Group
ODG Group
Van-Rob Inc.
J.P. Bowman Limited
ABC Group
Anchor Danly
Husky Injection Molding
Vari-Form
Windsor Mold Group
FANUC Robotics Canada Ltd.
Nachi Robotic Systems Inc.
Yaskawa Motoman Canada Ltd.
TRW
ENGINE COOLING
Bend All
Brose Canada
Denso Manufacturing
The NARMCO Group
Vari-Form
BODY SYSTEMS
ABC Group
Cannon Automotive Solutions
DBG
Flex N Gate
Hematite Manufacturing
Huzura Manufacturing Ltd.
Lanex Manufacturing Inc.
Multimatic
ODG Group
Omega Tool
Samuel Automotive
Sinteris
The NARMCO Group
Tiercon
Van-Rob Inc.
Vari-Form
Warren Industries
WEGU Manufacturing
Windsor Mold Group
Yachiyo of Ontario Manufacturing
SAFETY
ABC Group
Intertec Systems
Quality Safety Systems Co.
Tyco Electronics Canada Ltd.
ELECTRICAL & ELECTRONICS
D&V Electronics Ltd.
DBG
Denso Manufacturing Canada
Digital Dash
Intertec Systems
Invotronics
Kasai Canada Inc.
Schukra Of North America Ltd.
Spatial View
Tyco Electronics Canada Ltd.
Van-Rob Inc.
Windsor Mold Group
Canada has Suppliers in Every Product Category

Canada Supply Base is Second to None
Top OEM Suppliers
with Plants in Canada
Global Rank 2011
#2 Denso (Japan)
#3 Continental (Germany)
#4 Magna International (Canada)
#5 Aisin Seiki (Japan)
#6 Faurecia (France)
#7 Johnson Controls (U.S.)
#10 Delphi (U.S.)
#12 TRW (U.S.)
#13 Lear (U.S.)
#17 Toyota Boshoku (Japan)
#20 Autoliv (Sweden)
#22 Visteon (U.S.)
#35 Toyoda Gosei (Japan)
#37 Brose (Germany)
#54 Nemak (Mexico)
#56 Flex-n-Gate (U.S.)
#76 Linamar (Canada)
#78 Martinrea (Canada)
Source: Automotive News
● Many of the largest global suppliers have
facilities in Canada, along with steel and other
material producers
● Some of the biggest and most capable
suppliers are Canadian-based including ABC
Group, AGS Automotive, Linamar, Magna,
Martinrea, Multimatic, Valiant, Wescast and
Woodbridge Foam
● Other Canadian companies – such as Ballard,
QNX Software and Westport Innovations –
are recognized global leaders in their field
● Assemblers and Tier 1s in Canada also have
access to supply chains in the U.S. and
Mexico

For Example, Ontario is a Significant Player in
the NAFTA Auto Parts Industry
Share of NAFTA Parts Shipments, 2009
Source: Statistics Canada, US Bureau of Economic Analysis
• Ontario parts firms are leaders in the
development of innovative components, such
as, stampings, modules and systems, &
lightweight and composite materials
19.4%
10.7%
9.9%
9.8%
6.5%
6.1%
3.9%
3.9%
3.4%
3.4%
Michigan
Ohio
Ontario
Indiana
Tennessee
Kentucky
Alabama
North Carolina
South Carolina
California

Areas of Automotive Expertise
Information and Communications
Technology
• Software engineering
• Navigation and positioning
• Wireless technologies and networks
• Microchip design, system-on-chip, engineering
• Semi-conductor technologies (MEMS, RF)
• Telematics, communications
• Micromachining
• Intelligent systems
• Photonics and optoelectronics
• Nanotechnology
• Enhanced synthetic vision
Advanced Design, Visualization and
Manufacturing
• Inspection and vision systems
• Laser imaging
• Tooling and robotics
• Stereo-lithography, laser deposition
• Virtual design
Metal Processing
• Advanced casting of light metals
• Cutting and machining
• Sheet and tube forming
• Welding and joining
• Powder metallurgy
Advanced Materials
• Lightweight materials
• Nano-materials
• Bio-materials
Advanced Technologies
• Mechatronics
• Powertrain engineering
• Clean diesels
• Homogenous charge compression ignition
• Fuel cells, hydrogen and alternative fuels

Canada Has Highly Educated and Multicultural
Workforce
1 OECD. Education at a Glance 2009
2 International Institute of Management Development. World
Competitiveness Yearbook 2010.
3 World Economic Forum. Global Competitiveness Report 2010-2011
Canada ranks #2 in the G7 in terms of the
availability of qualified engineers in its
workforce, according to the IMD 3
The WEF ranks Canada #3 in a 139-
country study on the quality of
management schools 2
Canada ranks #1 in the OECD for its college
completion rates (23.6% of working-age
Canadians have graduated from college)1

Ontario has a Highly Educated Population
64
62
50
44
41
38
35
30
17
Ontario
Canada
Ireland
Japan
United States
United Kingdom
Germany
France
Mexico
Post-secondary Educational Attainment (%), Select Markets, 2010
(Age 25-64)
Overall, 64% of
Ontario‟s
population has
completed
post-secondary
education
University: 30%
College: 27%
Apprenticeship: 7%
Note: Not all jurisdictions count apprenticeship as post-secondary education
Sources: Statistics Canada and OECD, 2012

Ontario is a Leader in Recruiting and Retaining
a Highly Skilled Workforce
Rank City
1 New York City
2 Toronto
3 Singapore
4 Montreal
4 London
6 Los Angeles
7 Boston
8 Chicago
9 Vancouver
9 Copenhagen
9 Hong Kong
Out of 131 global cities examined,
Toronto ranked second for low risks
associated with employment and
redeployment.
Canada‟s strengths are derived from
strict enforcement of equal
opportunity laws, clear government-
mandated health and retirement
benefits, low levels of corruption, and
the high quality and broad availability
of training facilities.
Overall People-Risk Rankings, 2012
Source: AON Consulting, 2012

● Among major auto producing
nations*, Canada:
• has the highest quality of life;
• has the second lowest cost of
living and the lowest apartment
rents;
• is among the safest places to
live and do business; and
• is among the least afflicted by
pollution.
● Other Canadian advantages include:
• high-quality, low-cost education;
• universal health care;
• cosmopolitan cities; and
• Multi cultural society
* US, Canada, UK, France, Germany, Spain, Korea, Japan, Mexico, China
World Rank - Quality of Life Factors
8th
25th
15th
12th
10th
20
19th
17th
54th
18th
27th
Source: IMD, World Competitiveness Yearbook 2006
US=1.00
Canada is a Great Place to Live!

RESEARCH & DEVELOPMENT

Snapshot of Automotive R&D in Canada
● Annual R&D spending in the motor
vehicle and parts industry averaged $450
million in the last decade
● Over 1,400 auto-related patents granted
to inventors based in Canada.
● Expertise in light weighting, biomaterials and
composites, advanced safety systems,
software and the “connected car”, alternative
fuels (particularly EVs), vehicle testing, and
more
● Focus on private and collaborative R&D
Climatic wind tunnel at UOIT-ACE
$0
$100
$200
$300
$400
$500
$600
$700
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Statistics Canada
Automotive R&D Expenditures
(in CAD$ millions)
average
$450M/year

Automotive OEM R&D Centres
Ford Motor Company of Canada Ltd.
• Ford Manitoba Extreme Cold Weather Test Facility (Thompson MB)
• Ford Powertrain Engineering Research & Development Centre (Windsor ON)
Chrysler Canada Inc.
• Automotive Research & Development Centre (Windsor ON)
General Motors of Canada Ltd.
• GM Canadian Regional Engineering Centre (Oshawa ON)
• GM Cold Weather Development Centre (Kapuskasing ON)
Honda R&D Americas Inc. (Canada)
• Environmental testing laboratory (Dartmouth NS)
Toyota Canada Inc.
• Toyota Canada Cold Weather Research Centre (Timmins ON)

Generous R&D Tax Credits/Programs
Scientific Research & Experimental Design
● SR&ED is a generous federal tax credit which encourages businesses in
all sectors to conduct R&D in Canada
● SR&ED is worth $3 billion/year for the manufacturing sector
Industrial Research Assistance Program
● IRAP helps support innovative R&D and commercialization of new
products and services by small- and medium-sized firms
Automotive Partnership Canada
● APC is a five-year, $145 million program that supports collaborative
university-industry in four areas: environmental performance, the cognitive
car, next-generation manufacturing, and social sciences
Automotive Innovation Fund
● AIF is a 10-year, $500 million program designed to lever large ($75M or
more) investments in vehicle assembly, powertrain and R&D operations
that focus on innovation and environmental technologies

World-class R&D Institutes/Universities
National Research Council - Automotive
● Network of 20 research institutes, many specializing in automotive-
related disciplines such as light materials, aerodynamics, alternative
propulsion, sensors and telematics
CanmetMATRIALS
● National laboratory (Hamilton and Calgary) run by Natural Resources
Canada for metals, materials and processing research in support of
manufacturing innovation
AUTO21
● National network of centres of excellence for automotive R&D,
regroups 200 researchers from 46 universities to conduct applied
R&D in partnership with private companies
Magna-NRC Composites Centre of
Excellence
● Research centre to develop coEmposite technology for the Canadian
and global automotive industries

World-class R&D Institutes/Universities
Fraunhofer Project Centre @ Western
● Research centre and industrial-scale test facility focused on composite
technologies for weight reduction at Western University (London ON)
MacAUTO
● McMaster University Institute for Automotive Research and Technology
(Hamilton ON): The University‟s numerous automotive-related research
institutes and centres work with industry, government and academic partners in
developing and commercializing new technologies and materials that will
ensure the global competitiveness of Canada‟s auto industry.
UOIT-ACE
● Automotive Centre of Excellence at the University of Ontario Institute of
Technology (Oshawa ON)
WatCAR
● University of Waterloo Centre for Automotive Research (Waterloo ON)
University of Windsor
● Automotive engineering specialization and research partnerships, such as
AUTO21 and Chrysler‟s ARDC

Government Supported R&D Centres
Located throughout Ontario

Ontario’s R&D Cost Advantage
-1.1
-5.4
-23.4
5.2
9.1
9.1
0.0
0.4
10.7
12.7Netherlands
Canada
France
Ontario
UK
Germany
US
Italy
Australia
Japan
R&D Cost Advantage (%) After-Tax Cost of $100 R&D Expenditure, Small and
Medium Sized Manufacturers, 2012
R&D
expenditure
(general)
R&D expenditure
(at eligible Ontario
research institutes)
Gross expenditure $100.00 $100.00
Actual after-tax
expenditure
$51.57 $40.11
Note: data as of April 13, 2012.
Sources: Ontario Ministry of Finance and Canada Revenue Agency
Ontario has a
9.1% cost
advantage
relative to the
US
Source: MEDI analysis, prepared using CompetitiveAlternatives.com Cost
Model, 2012 version, accessed on March 30, 2012.

Benefits of Collaboration
• Mitigates the risk of innovation
• Allows the inclusion of expertise outside a companies
historic strengths
• Widens the reach of expertise
• Provides access to a wider scope of funding
• Takes advantage of embedded relationships and contacts
• Expands the scope of available facilities and equipment
• Both sides benefit from new ideas

NEXT
GENERATION
VEHICLES

Position to Take a Leading Role in the
Development of the Next Generation of
Vehicles
• Automakers are developing a broad spectrum of alternative, environmentally friendly
vehicles, especially electric vehicles (EV), among other technologies i.e. advanced
hybrids, CNG, fuel cells etc.
• The government has partnered with a number of firms in order to position the province to
take a leading role in vehicle electrification and lightweighting, including:
 $16.7 million for Electrovaya of Mississauga (Ontario) to develop and manufacture
lithium-ion batteries
 $48.4 million for Magna International and Magna E-Car to develop advanced
lightweighting technology, electrification of vehicle components and battery
development.
 $2 million for Dana Canada to develop „Thermal Management Systems‟ for hybrids
and electric vehicles
 $70.8 million to Toyota Motor Manufacturing of Canada on a spectrum of initiatives,
including production of the RAV4 EV

At The Forefront Of Next Generation Vehicle
Technologies Research
• Researchers in Ontario‟s network of universities and specialized institutions are
conducting leading research in advanced manufacturing and alternative
energy:
 McMaster Automotive Resource Centre (MARC) is leading hub of advanced automotive
research and development. Ali Emadi, director of MacAUTO is the holder of the $10-
million Canada Excellence Research Chair in Hybrid Powertrain and is one of the
world‟s foremost developers of electric and hybrid powertrain technologies
 AUTO21 partners with the public and private sectors and supports more than 300
researchers across Canada in a variety of auto-related research projects
 WatCAR, an automotive research centre at the University of Waterloo, is focused on
leading-edge studies to enhance automotive innovation and competitiveness
 University of Ontario Institute of Technology‟s General Motors of Canada Automotive
Centre of Excellence is a state-of-the-art research facility (including a climatic wind
tunnel) created to further R&D in the Canadian automotive industry
 Magna-NRC Composite Centers of Excellence, supports the Canadian automotive
industry in developing next-generation vehicles with lighter, more durable parts, that are
safe, affordable, environmentally friendly, and fuel efficient

Government Actively Supports the Auto
Industry
• Ontario has made important investments to support the auto
sector and to improve the overall business environment in
the province, including:
 Strategic Investments: In 2011 Ontario invested $121.2 million in innovative
automotive initiatives with Dana, Magna International, Magna E-Car and
Toyota
 Ontario Automotive Investment Strategy (OAIS): A $500 million, 5-year fund
leveraged about $7.8B in total investment in the sector
 Restructuring of GM and Chrysler: Ontario committed $4.8 billion to the
restructuring of GM and Chrysler
 Next Generation of Jobs Fund: Provided support to a number of automotive
firms, such as Ford, Electrovaya, Mitchell Plastics and Alcohol Counter
Measures

• Commitment to fight climate change and improve air quality
 The Ontario government aims to have one out of every 20 vehicles driven in
Ontario to be electrically powered by 2020, this would support the
greenhouse gas emissions target for 2020 set out in our Go Green Action
plan. Contribution may be up to 0.6 MT (600,000 tonnes) of GHG savings by
2020
• Reducing the environmental impact of the Ontario government‟s operations
 Commitment to purchase 500 electric vehicles for the Ontario Public Service
(OPS) passenger fleet by 2020
 Contributes to the OPS goal of an annual 5% reduction in fuel consumption
• Supporting alignment and direction of Ontario‟s auto sector
 „Greener‟, more sustainable and more competitive with a strong focus on
high value- added development and production of innovative auto parts and
technologies
• Supporting the government‟s research and innovation agenda
 Programs applicable to the research, development and commercialization of
electric vehicles and their components parts
Government Commitments

The Government of Ontario has been active in encouraging consumer
adoption of Electric Vehicles (EVs).
Developments include:
 Consumer Incentives: Rebates of $5,000 - $8,500 offered to consumers to
purchase electric vehicles
 EV Infrastructure Fund: On May 4th 2012, Ontario released a Request for
Information (RFI) on electric vehicle infrastructure, including home and public
charging. The RFI closed on June 4th 2012. The RFI results are currently being
analyzed
 Access to High Occupancy Vehicle (HOV) Lanes: EVs are provided “green”
license plates for EVs to drive in commuter lanes (HOV) with one occupant
 Ontario is establishing a series of charging locations at GO commuter train
stations in the Greater Toronto Area (Aurora, Lincolnville, Whitby in 2011 and
Ajax, Erindale, Oakville, Burlington in 2012)
Commitment to Getting Electric Vehicles
(EVs) on the Road

OUTLOOK, CHALLENGES AND
OPPORTUNITIES

Light Vehicle Sales
Canada and NAFTA, 1990 - 2013
0
2
4
6
8
10
12
14
0
2
4
6
8
10
12
14
16
18
20
Canada
NAFTA
Canada %
1999-2007:
19-20 mil. unit NAFTA market
for new light vehicle sales;
Canada @ 8% of NAFTA LV
sales
2008-2011:
Canada outperformed NAFTA
as overall sales collapsed;
Canada @ 11% of NAFTA light
vehicle demand
2012-2013+:
Recovery and organic growth
(Mexico and Canada)
Unit Sales (Mil) Canada % of NAFTA

Light Vehicle Production
Canada and NAFTA, 1990 - 2019
0
2
4
6
8
10
12
14
16
18
20
0
2
4
6
8
10
12
14
16
18
20
Canada
NAFTA
Canada %
Unit Production (Mil) Canada % of NAFTA

NAFTA LV Production by Jurisdiction
Ontario, Michigan, Mexico Volume Trends (Mil), 2000-2019
Mexico B-car/CUV growth from
Ford, GM, Nissan, Honda, Toyota,
Mazda; C-car and CUV from
Volkswagen
Michigan B/C/D/E/F/S, CUV and
SUV growth from GM, Ford,
Chrysler
Mexico (2008+) and Michigan
(2014+) auto output (new
investment driven) growing
sharply as Ontario declines
Unit Production (Mil)

Top 10 Auto Supplier Trends
6. Supply-Chain
Transformation
1. Customer
Facing Focus
Increasing
the Value
of the
Business
10. Core
Competencies
9. Systems &
Modules
8. Globalization
7. Resource
Pressure
2. Growth
3. Cost
Reduction
4. Technology
5. Brand
Management

Sources of Automotive Growth
Products
Key Sources of Growth
Recovery Geography
New/Replacement Products
New/Replacement Processes
Vertical Integration
M&A
JVs
Marketing
Global
Crises

Megatrends
New NAFTA Environmental Regulations
• Smaller, lighter vehicles, with upgraded fuel-efficient powertrains
• Will people want to drive much smaller vehicles? Will vehicle profit
be high enough to justify investment?
• 2017-2025 standards require a 65% improvement in fuel economy
over current levels.
• Higher consumer ownership and operating cost.
• Will consumers accept paying more … possibly much more … for
transportation?
• How do we as suppliers support global platforms and still look after
local business opportunities?

NAFTA Auto Outlook
Key drivers, enablers and constraints
2013 2014-16
– Employment/Income Growth
– Driving Age Population Growth
– Age of Fleet
– Ownership and Operating Cost
– Affluence/Financial Stability
– Technology
– Fuel Economy Regs
– Supply Chain Constraints
Source: AutomotiveCompass

Challenges for Canada
• High Exchange Rate
• Low investment in new production facilities
• Fiscally conservative governments at all levels
• High infrastructure costs – energy, environment
• A Southern production migration
• Adaptation of global platforms
• A conservative attitude
• Lack of overall confidence

Canadian Advantages
• Health care costs
• Stable, business-oriented environment
• Productivity
• Quality
• Resources
• Infrastructure
• Tax structure
• Highly skilled labour/well-educated workforce; positive work ethic
• Strong product and technology mix
• Strong supply-base
• Modern and flexible manufacturing facilities

Bridging the Innovation Gap
• Innovation is the key to long term success
• Applies to products, processes, tooling, systems
• It implies a commitment to product excellence
• OEM pulling technology rather than suppliers pushing
• Key Organizations that make it happen (private,
associations & government)
• A commitment that the Automotive Industry is an
essential and critical industry that always receives
primary attention

Collaboration with Academia
• Unprecedented amount of technical change in the next
10-12 years
• Industry cannot get there on its own
• Collaboration is the only alternative
• Must have access to advanced research capabilities
• It will create an unprecedented demand for HQP (highly
qualified personnel) and Technological Capability
• Opportunities for new manufacturing processes and
procedures are abundant
• Manufacturing shapes our future!!!

Challenges for Industry
• Protecting Intellectual Property
• Protecting manufacturing and product “secret
sauce”
• The publish or perish imperative
• Adhering to automotive industry timing
requirements
• Adhering to cost containment issues
• Location of facilities in proximity to manufacturing
or engineering sites

Episode IV – A New Hope
• Innovation must be our priority
• Encouraging progress that supports this initiative
• MARC Engineering Center
• CANMET Hamilton
• WatCAR Engineering Center
• UOIT Wind Tunnel and Facilities
• Embrace a new model that encourages public private
partnerships (P3) that will drive innovation
• Be open to learning from around the world
• Be great partners – the commitment to excellence
• A unique Canadian Identity

Connected
Vehicle
CUTA
Canadian Urban
Transit Association
ITS Canada
Intelligent Transportation
Systems
APMA
Automotive Parts
Manufacturers
Academia
University
Researchers
Government
Federal & Provincial
CTA – OTA
Canadian & Ontario
Trucking Associations
EMC
Electric Mobility
Canada First Responders
Police/ Fire/
Ambulance
The Connected Vehicle - Canadian Stakeholders

64
THANK
YOU !
JERRY SUYAVONG
Email: jerry.suyavong@gmail.com
Skype: jerry.suyavong
Mobile: +1 (647) 709-7122

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