The early automotive industry in canada canadian

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The early automotive industry in Canada Canadian industry flourished because of national policy with its protective tariffs that was adopted by sir john a McDonald in late 1870 and the imperial preference introduced by sir Wilfred Laurier in late 1890s These two policies allowed Canada to develop a domestic auto manufacturing industry under the protective tariffs and take advantage of preferential treatment for exports to British empire Public policy decision influenced automotive companies’ (although they are private sector competitor) operation and establishment in Canada Manufacturing and government policy In addition to vehicle production Canada plays a major role in auto supply chain as well (one of the reasons of Canadian automotive industry’s success is universal health care system) Canada policy of high tariffs was the reason why ford gave McGregor the license to build ford cars in Canada The tariff policy made it necessary for U.S based auto makers to set up production in Canada The rise of the automobile industry in Canada 1904 Canadian Auto industry was born when Ford licensed the right to manufacture and sell its vehicle in Canada to Gordon McGregor 1920 Ford became the largest automotive enterprise in the British Empire McLaughlin from Oshawa got license with Buick- the ‘McLaughlin’ which contains a American Buick build engine and Canadian designed bodies. The incentive for the Americans to license Canadian automakers was to overcome Canadian tariffs wall on goods produced in the US Some of other reasons that Americans felt to give license to Canada was B/C 1. They already had existing plants to manufacture horse-drawn buggies and carriages. Retooling to car manufacturing plant would be faster and cheaper than building a new plant in Canada 2. They didn’t have to invest capital (b/c it was hard to get loans banks b/c they saw this new auto industry was risky) US automaker relies heavily on outsourcing parts, Government placed a lower tariffs on parts to promote Canadian parts industry(Such strategy 1. encouraged the retooling of Canadian assembly plants from producing buggies to car by offering some cost advantages 2. Also encouraged domestic sourcing of parts) Initially the Buick and ford plant was only assembly sites that put together US made parts but overtime parts and materials were increasingly sourced in Canada, including iron, steel, brass and bronze, jute, tubes and piping lead, glass, lumber, and fabric
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In order to achieve the fundamental strategy of mass production low-cost vehicle that was affordable to the masses, McGregor 1. reduced cost by sourcing parts made in Canada to capture full value and avoid the tariffs 2.limited the number of models offered to achieve high volume for parts and materials to obtain volume discount and reduced transaction costs The main reason why the Canadian auto industry was successful was b/c the tariff wall , scarce capital , demand for auto mobiles outpaced supply Imperial preference British Imperial preference in (1897)
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