The Canadian automotive industry continues to face significant challenges, with the ongoing trade war and a decline in vehicle production exacerbating an already difficult situation, according to a new report from DesRosiers Automotive Consultants. The report, which focuses on light vehicle production in Canada, highlights a long-term structural decline in the industry since the early 2000s, with additional factors in 2025 further complicating the landscape.
According to Andrew King, Managing Partner at DesRosiers, Canada’s automotive sector has seen a persistence in downward trends over the last two decades. The report shows that light vehicle production in Canada reached a peak of 2.9 million units in 2000, but since then, there has been a steady decline in manufacturing output. In 2025, total production dropped to 1.2 million units from 1.3 million in 2024—a small decrease, but still reflective of the ongoing decline in the industry.
The challenges of trade wars, particularly the hostile trade stance adopted by the U.S. administration, are further exacerbating the situation. Additionally, the retreat from electric vehicles and challenges in the broader market have compounded the issue. These challenges, combined with Canada’s structural decline in productivity, have left the country’s automotive sector struggling to stay competitive.
In Durham Region, Oshawa Assembly, which has long been a critical part of Canada’s automotive production, is also facing significant disruptions. General Motors’ (GM) Oshawa plant has seen the cutting of the third shift, resulting in around 700 job losses. The reduction in the workforce has created further uncertainty for the region’s auto sector, even as Stellantis and Ford continue to show mixed results in terms of production output. Despite these setbacks, Stellantis did see an increase in volume in 2025, with Windsor showing a more positive outlook, particularly with the launch of the third shift in February 2025.
In contrast, Ford has been facing limited production, while the retooling at Oakville’s plant remains ongoing. The retooling is seen as a move to prepare the plant for stronger vehicle production in the near future, as it is expected to help stabilize the market for Ford’s Canadian operations. However, with Oshawa Assembly struggling and facing a reduction in workforce, the outlook for GM’s operations in Canada remains uncertain.
Despite these challenges, King remains cautiously optimistic about the future potential of the Canadian automotive sector. “The auto assembly sector in Canada continues to face ongoing challenges,” said King. “Nevertheless, the potential for auto manufacturing in Canada remains strong, and it is essential that all levels of government continue their efforts to support the industry.”
King also emphasized the need for urgent structural reform to address Canada’s broader decline in productivity. He stated that reform is critical for the country’s industrial base to remain competitive on a global scale, particularly in the automotive sector, which has traditionally been a significant part of Canada’s manufacturing base.
While Toyota and Honda continue to perform well, with Honda maintaining its long-term commitment to Canada, the overall outlook for Canada’s auto manufacturing industry remains uncertain. The region’s production capacity, particularly in Oshawa, will depend on how effectively Canada can navigate trade wars, the shift toward electric vehicles, and economic uncertainties in the coming years.
