The Canadian Press
TORONTO - Scotiabank says the global auto industry hit record-high output in the first quarter of 2014, despite a slow start in North America due to weather-related issues.
The bank says production will ramp up in North America in the second quarter, providing significant lift for the American and Mexican economies but minimal help for Canada's economic growth.
Scotiabank says Canadian output is being held back by retooling at a Toronto-area plant and it estimates higher auto production will add only 0.2 percentage points to Canada's growth in the second quarter.
By contrast, the bank estimates rising vehicle production will add about 0.7 percentage points to U.S. economic growth in the April-June quarter — the biggest increase in two years.
In Mexico, growing production by Nissan, Mazda and Honda at recently opened assembly plants will help the auto industry add a full percentage point to that country's economic growth in the quarter.
Production in Asia will grow even faster, particularly in China, which already has double North America's capacity of nearly 18 million vehicles, the Scotiabank report says.
Assemblies in China have surged 11 per cent so far this year and the gains will accelerate in coming months, Scotiabank senior economist Carlos Gomes writes.
"This reflects the fact that automakers continue to invest in new assembly plants, despite some fears of overcapacity in China and other emerging markets," Gomes said.
"Most of the new capacity in China is being put in place by the major global auto makers, which continue to gain share in the world's largest auto market."