Struggling car company edges past Toyota despite 41% plunge in 2009 output

General Motors of Canada has narrowly retained its position as the country’s biggest automaker despite a huge drop in production last year.

GM, which has led the industry in Canada for the past several decades, disclosed Thursday that 2009 output plunged by a stunning 41 per cent, or more than 240,000 cars and trucks, to 342,147 vehicles compared with the previous year.

After falling behind in the first half of the year, the struggling automaker edged past Toyota Motor Manufacturing Canada, whose output last year climbed 11 per cent, or about 32,000 autos, to a record 319,548 vehicles.

GM’s slide contributed significantly to a big overall plunge in industry production in Canada last year. Output tumbled 27.8 per cent to 1,473,947 vehicles compared with 2008.

The decline represents the equivalent of the annual output of more than two assembly plants.

It also marks the lowest level of Canadian auto production, a key economic generator, since 1983 when the country was pulling out of a recession.

GM had fallen behind Toyota at the halfway point of the year because of sliding truck and car production. The company’s truck plant in Oshawa closed in May and it was overhauling a car complex.

But production picked up significantly during the second half at its CAMI operation in Ingersoll because of the popularity of the sport utility vehicles that are assembled at the plant.

Toyota Motor president Ray Tanguay said earlier this week that his company expects production at its Cambridge and Woodstock assembly plants to top 400,000 vehicles this year.

A second shift assembling RAV4 sport utility vehicles in Woodstock will likely account for most of the gain.

However, GM, which received $10.8 billion in government aid last year to stay alive, will also get additional output from a third shift at the Ingersoll plant.

Industry watcher Dennis DesRosiers said it is difficult to predict who will emerge as the top auto producer this year because of the narrow difference between the two auto giants.

“It’s a toss-up,” he said. “There are positives for both companies. No one knows right now how the market will respond to some of the products.”

While Toyota posted a production gain, Ford Motor Co., Chrysler Canada and Honda Canada joined GM in reporting declines last year.

Chrysler’s output tumbled 34 per cent to 314,504 vehicles in Windsor and Brampton. Honda’s production slid 32 per cent to 259,796 in Alliston and Ford’s volume dropped 22 per cent to 237,952 vehicles in Oakville and St. Thomas.

Article reprinted from the Business section of The Toronto Star Jan,15,2010