Canadian auto production fell in 2025 as tariffs and other uncertainty took a bite

An employee carries a General Motors Co. (GM) Chevrolet bumper at the Magna International Inc. Photo by Cole Burston/BloombergArticle contentCanadian auto production in 2025 declined for a second consecutive year to 1.2 million vehicles, down seven per cent from 2024, according to DesRosiers Automotive Consultants Inc.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentAuto-sector executives attributed last year’s decline to a number of factors, including the 25 per cent tariffs imposed by the United States last March and the uncertainty caused by the electric vehicle transition.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle contentThe next few months will be crucial, they said, as the Canada-U.S.-Mexico Agreement (CUSMA) is up for review and U.S.

President Donald Trump must signal by July whether his country intends to withdraw from the agreement, as he has at times hinted.Article content“This is a pivotal year and the next few months are really going to dictate what our sector could look like,” said Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, a lobby group representing U.S.-based automakers.Article contentVehicles that comply with CUSMA are exempt from the U.S.’s 25 per cent tariffs, but not all vehicles were certified as exempt and the policy caused logistical challenges for automakers.Article contentAt least three U.S.-owned assembly plants in Canada are currently not producing vehicles. Kingston said what happens next may hinge on what happens in trade negotiations and whether the U.S. insists upon putting tariffs on Canadian-made vehicles, thereby cutting off the main export market.Article content“You can’t make a major investment in Canada without clarity on the trade situation and the tariffs,” he said.Article contentArticle contentAmong the three U.S.-based automakers, Stellantis NV produced 161,000 vehicles, or about 13 per cent of the total, General Motors Co. produced 136,000 and Ford Motor Co., which is in the process of retooling its only assembly plant and is expected to resume production later this year, produced 249 vehicles.Article contentRead More Canada sends Stellantis default notice Ford CEO says rare earth supply is ‘day to day’ Article contentBy contrast, Japanese-based automakers accounted for the vast majority of production in Canada.

Toyota Motor Corp. produced 537,518 and Honda Motor Co. Ltd. produced 400,585 vehicles, together accounting for 76 per cent of all vehicles.Article contentBut David Adams, president of the Global Automakers of Canada, which represents Honda, Toyota and other automakers, said the U.S. tariffs formed the main obstacle to auto production.Article content“We knew it was going to be lower just because of the challenges to get vehicles across the border into the U.S.,” he said.Article contentOverall, production in Canada has dramatically declined in the past decade. Canadian automakers produced around or more than two million vehicles per year between 2016 and 2019, but that dropped below 1.5 million vehicles in 2020 as the pandemic affected production.Trending Posthaste: Many Canadians could be committing insurance fraud — and don't even know it News Smith calls for new southbound pipelines, says U.S. could call 'first dibs' on Canadian oil exports Oil & Gas Why market bets for interest rate hikes in Canada are so high Economy Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles Posthaste: Canada's troubled housing market just got hit with another headwind News Article contentA semiconductor shortage and other supply chain problems caused further declines in the following years. Production appeared to rebound in 2023, but fell in 2024 and again last year.Article contentDuring that period, GM switched to producing an electric delivery van, known as the BrightDrop, at its plant in Ingersoll, Ont., that never reached anticipated sales levels and was cancelled last year. GM also slashed a third shift at its Oshawa, Ont., plant, which produces popular pickup trucks.Article contentStellantis last year halted a multibillion-dollar retrofit of an assembly plant in Brampton, Ont., which is still idled. It added a third shift at its assembly plant in Windsor, Ont., in recent months, which slightly boosted production.Article contentFord barely produced vehicles in Canada in 2025 because it is retrofitting its Oakville, Ont., assembly plant to produce super-duty pickup trucks. Production is expected to resume later this year.Article contentOverall, DesRosiers characterized the Canadian auto sector as facing a long-term structural decline. Some of the recent declines have been attributed to greater production in Mexico, which benefited from the original North American Free Trade Agreement, as well as greater imports from countries such as South Korea.Article contentEarlier this year, Prime Minister Mark Carney struck a deal that allows China to send 49,000 electric vehicles into Canada on a duty-free basis, with the number escalating by six per cent every year. That represents less than three per cent of the overall sales market, but about 30 per cent of the EVs sold in Canada.Article content• Email: gfriedman@postmedia.comArticle contentShare this article in your social network Get the latest from Gabriel Friedman straight to your inbox Sign Up CommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Posthaste: Many Canadians could be committing insurance fraud — and don't even know it News Smith calls for new southbound pipelines, says U.S. could call 'first dibs' on Canadian oil exports Oil & Gas Why market bets for interest rate hikes in Canada are so high Economy Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles Posthaste: Canada's troubled housing market just got hit with another headwind News