Many Canadians are looking to buy a new car in the near future — but amid the trade war, the majority say they would prefer that their cars be made entirely in Canada.
As many as six in 10 Canadians (61 per cent) said they are looking to buy a new car in the next five years, with more than three-quarters (76 per cent) worried that trade tensions and U.S. President Donald Trump’s tariffs will make vehicles unaffordable, a new KPMG survey released Monday showed.
Canadians want their cars built right here, the survey showed, with 72 per cent saying it is important that their vehicle be assembled or built in Canada. Nearly half (49 per cent) said it is “somewhat important,” while 23 per cent said it is “very important.”
The survey shows that non-American manufacturers with a large manufacturing footprint in Ontario – Toyota and Honda – are seeing a spike in popularity in Canada, while the Detroit Three – General Motors, Stellantis and Ford – are losing consumer trust.
“It’s not surprising that Toyota and Honda, which each have a large manufacturing presence in Ontario, resonate most with Canadian consumers,” said Dave Power, partner and national automotive sector leader at KPMG Canada.
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“At the same time, trust in the Detroit Three is starting to erode as Canadians see a lack of commitment to keep jobs in Canada, driven by U.S. trade policies and pressures on company leadership to move operations to the U.S,” Power added.
In April, Trump announced a 25 per cent tariff on foreign-made automobiles, including those assembled in Canada. However, in May, he announced that any parts that are compliant with the Canada-U.S.-Mexico free trade agreement will not be hit with tariffs.
CUSMA is up for review in the new year, leading Canadians to worry about car prices if Canada loses these exemptions.
The highly integrated nature of the automotive supply chain would likely mean Canadians could see car prices affected by Trump’s tariffs.
Nearly three-quarters of Canadians (72 per cent) are concerned new vehicle prices will rise if Canada’s auto industry loses protection under CUSMA, the KPMG survey showed.
Half (51 per cent) believe Canada’s automotive industry cannot survive without trade protections or a new trade agreement with the U.S.
The survey shows Canadians also want the government to punish automakers that move jobs down south, with six in 10 (59 per cent) saying they support subjecting automakers to Canadian tariffs if they relocate assembly lines to the U.S., the research finds.
Canadians want the country’s auto sector to keep focus on electric vehicles, with more than half (55 per cent) saying they believe Canada could become a global leader in EVs to reduce its reliance on the U.S.
“With billions already committed to new battery and EV charging facilities in Ontario and Quebec, momentum is building toward a made-in-Canada ecosystem for cleantech exports in renewable energy, EVs and electrification,” Power said.
Most Canadians (62 per cent) say they don’t plan to spend more than $50,000 on their next car, down from 75 per cent in 2022.
Nearly four in 10 (39 per cent) said they plan to spend between $30,000 and $50,000, while 23 per cent plan to spend under $30,000.
Tariff-related price increases are leading Canadians to consider used cars, with 23 per cent saying they’re worried that tariffs have already priced them out of the new car market. A price increase of around 10 to 15 per cent would push another 38 per cent out of the market, the survey showed.
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