Car brands such as Honda, which has a large manufacturing presence in Ontario, resonate most with Canadian consumers. (Credit: Jack Boland/Toronto Sun/Postmedia Network files)
The ongoing uncertainty in the automotive industry has 72 per cent of Canadians saying it’s important that their vehicle be assembled or built in Canada, according to a new survey by KPMG Canada.
The survey said 76 per cent are worried that ongoing trade tensions and tariffs will result in sharply higher prices, making new vehicles unaffordable. Six in 10 Canadians said they are in the market to buy a new vehicle within the next five years.
“With U.S. tariffs disrupting the industry, Canadians in the market for a new vehicle are looking to the brands they trust at prices they can afford in models they want and, increasingly, on where those vehicles are built,” Dave Power, partner and national automotive sector leader at KPMG Canada, said in a press release.
As a result, Canadians are calling on the government to prioritize domestic manufacturing, job security and long-term resilience and position Canada as a leader in electric vehicles and battery production, he said.
“Canada’s automotive sector needs to carefully consider its future and what changes might be warranted,” he said.
Aside from affordability and meeting their lifestyles, car buyers have also become attuned to where vehicles are being made, looking for vehicles that have a positive economic impact on the country, KPMG said.
Power said car brands such as Toyota and Honda, each of which has a large manufacturing presence in Ontario, resonate most with Canadian consumers.
On the other hand, trust in the Detroit 3 is starting to erode, he said. Canadians see a lack of commitment to keeping jobs in Canada, which has been driven by U.S. trade policies and pressures on company leadership to move operations to the U.S.
The survey also said 72 per cent of Canadians are concerned new vehicle prices will rise if Canada’s auto industry loses protection under the Canada-U.S.-Mexico Agreement (CUSMA), especially given potential U.S. trade policies. CUSMA is set for review next year.
“Canadians strongly support a transition that moves away from U.S. reliance and prioritizes defence manufacturing, parts manufacturing and battery and critical minerals production,” the report said.
It also said 23 per cent of Canadians worry that tariffs have priced them out of the new vehicle market, and 38 per cent said that another 10 per cent to 15 per cent increase in vehicle prices would push them out of the market.
KPMG said 62 per cent say they won’t spend more than $50,000 on a new automobile, which is down from 75 per cent in 2022. It said 39 per cent plan to spend between $30,000 and $50,000, while 23 per cent will only shell out $30,000.