Canada's auto industry got a double shot of good news Thursday, with a forecast for profits to rise nearly tenfold to almost $1 billion in 2011 and an announcement that Toyota will resume full production two months ahead of schedule.
Toyota made the announcement late in the day, saying production curtailed by supply disruptions resulting from Japan's earthquake and tsunami would be back at 100% by September, instead of November or December, as earlier expected.
Those production cutbacks were cited by the Conference Board of Canada as a factor holding the industry back from even greater gains this year and one that could lead to higher sticker prices on new vehicles.
In 2010, the board said, the industry returned to profitability, producing $114 million in earnings. It was the first profitable year since 2006 after two of the key North American players -- General Motors and Chrysler -- nearly went under during the financial crisis and subsequent recession.
U.S. light vehicle sales, which plunged during the recession to 10.4 million units in 2009, the lowest level since 1982, are expected to hit 13 million units in 2011, still well below normal market conditions that would yield 16 million units, the board said.
With Toyota and Honda both slashing production at Canadian plants in the second quarter, by 56% and 31% respectively, the board predicted -- prior to Toyota's announcement -- that production growth will ease to 11.8% in 2011 from the 15 per cent forecast in its autumn 2010 outlook.
