Honda, Toyota on pace to out-produce Detroit 3 in Canada for first time

Honda Motor Co. and Toyota Motor Corp. combined are on pace to assemble more vehicles in Canada this year than the Detroit 3, ending the 100-year run of Chrysler, Ford and General Motors at the top of the production rankings.

The two Japanese automaker turned out 631,142 vehicles at their Canadian assembly plants through the end of October, compared with 544,239 produced by Fiat Chrysler Automobiles, Ford Motor Co. and General Motors, according to estimates from the Automotive News Data Center in Detroit.

Steep cuts in production at the Detroit 3's Canadian assembly plants are the immediate causes of the new order — amid a year when overall vehicle assembly in Canada has fallen 25 percent.

Fiat Chrysler eliminated one shift of minivan production at its Windsor, Ont., assembly plant in July, GM’s Oshawa, Ont., factory ceased output in 2019 and Ford has scaled back assembly at its Oakville, Ont., operations. Detroit 3 production has fallen 36 percent from year-earlier levels.

But the roots of the change go back to Canadian government trade policy in the early 1980s, when amid a flood of Japanese vehicle shipments to Canada, then Trade Minister Ed Lumley put in place a strict inspection program that delayed delivery of Japanese vehicles to Canadian consumers. That move helped convince Honda and Toyota to build assembly plants in Canada.

Honda began production in Alliston, Ont., in 1986, while Toyota opened its Cambridge, Ont., factory in 1988.

Luring the two companies to Canada turned out to be one of the boldest and most successful automotive policy actions the Canadian government took, said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc.

“It was a brilliant move,” DesRosiers said. “In retrospect, nobody at the time was predicting that GM, Ford and Chrysler would be closing plants in Canada and that we would end up with the Japanese bigger than the Detroit 3.”

The shift “really does confirm just how unique Ontario is as a subnational jurisdiction for auto production — where else in the world can you find five of the industry’s leading producers, all within a few hours drive of each other?” added Dimitry Anastakis, a University of Toronto professor who has written extensively about the history of the auto industry in Canada.

The shift in leadership appears to put an exclamation point on decades of Detroit 3 decline in production and market share, but agreements reached by the companies with Unifor this fall point to a bit of a rebirth in Canada, with GM agreeing to reopen the Oshawa plant to build its popular pickup trucks in 2022 and FCA planning to restore the third shift in Windsor in 2024.

One key factor contributing to the growth of Honda and Toyota assembly in Canada is that their plants are producing the most popular vehicles in their respective companies’ North American lineups.

Honda of Canada Manufacturing builds the CR-V crossover and Civic compact sedan. Toyota Motor Manufacturing Canada turns out the RAV4 crossover at the Cambridge factory and a plant in Woodstock, Ont., that began production in 2008. RAV4 is Toyota’s best seller in the U.S. market — the destination for the bulk of Canadian auto production — and the top selling non-pickup truck.