Canada's automotive component manufacturers are facing mounting pressures from trade uncertainty, shifting U.S. policies, and the transition to electric vehicles. How are firms responding, and what will it take to strengthen the sector's long-term competitiveness?
Authored by Julian Birkinshaw, Romel Mostafa, and Sergii Nevmerzhytskyi, Between Survival and Transformation: How Automotive Component Suppliers are Responding to Trade and Technology Disruptions examines the experiences of 28 Ontario-based automotive component manufacturers, primarily small and medium-sized enterprises (SMEs).
The report finds that 68 per cent of surveyed firms experienced declining automotive revenues, prompting many to reduce labour costs and postpone investments to remain financially viable. While these measures may support short-term survival, the findings highlight diversification into adjacent industries as a potential pathway to long-term resilience and growth.
Drawing on firms' experiences, the report explores opportunities in sectors such as aerospace, mining, and defence, and proposes a policy framework to better coordinate existing supports, strengthen manufacturing capabilities, and help firms access new markets.
Authored by Julian Birkinshaw, Dean, Ivey Business School; Professor Romel Mostafa, Director of the Lawrence National Centre for Policy and Management; and Sergii Nevmerzhytskyi, Post-Doctoral Research Fellow, Ivey Business School.
Generous support from the Lawrence Family, Baran Family Foundation, Canada Life Research Fund, Power Corporation of Canada, and Scotiabank Digital Banking Lab at Ivey Business School is gratefully acknowledged.