Overview
Canada is the second largest automotive market in North America. Imports represent approximately three quarters of the new vehicles market. Most global vehicle manufacturers are present in Canada, including five with local assembly lines: Ford, General Motors, Stellantis (including Chrysler), Toyota, and Honda. In addition to new sales, the automotive aftermarket annual retail value is expected to reach US$19 billion by 2030.
In 2023, the import of passenger vehicles increased approximately 15.6% to US$38.6 billion. In 2023, Canadian imports of automotive parts and components totaled US$18.5 billion, an increase of approximately 19.7%. The United States’ share in the total Canadian automotive import market remains dominant at approximately 57% as of 2024.
The new light vehicles market (units of passenger cars and light trucks) increased 8.2% to 1.86 million units in 2024, up from 1.72 million units in 2023, with approximately 40% accounted for by U.S. brands. Passenger car sales are now about 13.4% of units sold, with SUVs dominating the market.
The Canadian regulatory environment for the automotive sector is harmonized to that of the United States, while over 90% of the two countries’ road-safety regulations are identical.
| Table: Canada Automotive Market Data (US$ Millions) | ||||
| 2022 | 2023 | 2024 | 2025 (Estimate) | |
Total Local Production | 63,163 | 77,109 | 69,213 | 65,872 |
Total Exports | 48,524 | 60,875 | 55,770 | 51,069 |
Total Imports | 79,920 | 89,430 | 88,307 | 85,132 |
Imports from the US | 51,143 | 51,902 | 50,606 | 45,545 |
Total Market Size | 94,560 | 105,664 | 101,750 | 99,934 |
Exchange Rates | 1.3013 | 1.3497 | 1.3698 | 1.4451 |
[Total market size = (total local production + imports) – exports]
Units: $ millions
Source: Statistics Canada reports, Bank of Canada annual average
Market Drivers and Structural Shift
A significant market driver is the pursuit of net-zero emissions, which the government is pursuing to reach in new vehicles sales 60% zero emission vehicles by 2030 and 100% by 2035, introducing specific incentives, including point-of-sale rebates. An additional driver is the significant increases in fuel costs due to global events.
Electric vehicle sales, both battery electric (BEV) and plug-in hybrid (PHEV), are now over 85,500 per year. The market penetration was faster in Quebec.
The supply chain challenges affecting production resulted in challenges in meeting demand and the structural shift towards EVs led to some price increases.
Leading Sub-Sectors (total imports in 2023)
- Motor Vehicles for Passenger Transport (not Buses/Public Transport) (US$38.6 billion)
- Trucks and Other Vehicles for The Transport of Goods (US$20.6 billion)
- Motor Vehicle Assembly Components and Parts (US$18.5 billion)
- Motor Vehicles for Special Non-Transport Purposes (US$1.1 billion)
Opportunities
The Canadian Government has committed to reach net-zero emissions by 2050 and has allocated large investments in the 2021, 2022, 2023, and 2024 budgets towards infrastructure and a green economy. Canadian subsidiaries of U.S. automakers announced substantial investments, including General Motors (US$785 million), Ford (US$1.5 billion), and Stellantis (US$ 1.14 billion), to prepare their production lines for electric vehicles.
Additionally, in early 2022, GM Canada, Ford Motors Canada, and Stellantis Canada announced plans for building their own facilities to manufacture batteries for electric vehicles. In May 2023, Nova Bus, a manufacturer of electric buses from Montreal, Quebec, announced winning a record order to deliver up to 1,299 transit buses to municipalities from Quebec.
Although ample opportunities exist, electric vehicle production lines have recently faced challenges and delays due to the phaseout of government incentives, high EV prices compared to gasoline models, supply chain disruptions from tariffs, slow progress in battery technologies, and limited charging infrastructure, all of which have dampened consumer demand and slowed large-scale adoption in 2025.
Many market players represent significant opportunities in this sub-sector. Canadian Tier 1 and 2 automotive manufacturers have very large supply chains to cover a variety of high-tech needs for their processes. They are building automotive assemblies and systems in locations in Canada and worldwide. Canada also has a strong national industry association, the Automotive Parts Manufacturers Association (APMA), which represents OEM producers of parts, equipment, tools, supplies, advanced technology, and services.
Advanced technology clusters are also significant opportunities. One such example is the autonomous vehicle cluster: Kanata North Business Association. Several municipalities are already developing related programs.
Examples of significant opportunities in components and parts sub-segments showing 2023 Canadian imports:
- Gear Boxes (Transmissions) and Parts – US$2.8 billion
- Drive-Axles with Differential and Parts – US$ 1.3 billion
- Suspension Systems and Parts Thereof, including Shock-Absorbers – US$1.4 billion
- Silencers (Mufflers) and Exhaust Pipes and Parts – US$448 million
- Clutches and Parts – US$369 million
- Motor Vehicle Parts, not elsewhere specified – US$4.3 billion
Resources
Major Events and Trade Shows in Canada
- Canadian International Auto Show, Toronto, Ontario, Feb 13-22, 2026
- Truck World, Mississauga, Ontario, April 16-18, 2026
- Montreal Electric Vehicle Show, Montreal, Quebec, May 2026
Industry Associations
- Canadian Vehicle Manufacturers’ Association
- Global Automakers of Canada
- Automotive Industries Association of Canada
- Automotive Parts Manufacturers’ Association
- Kanata North Business Association
Additional Resources
- Transport Canada
- Statistics Canada
Commercial Service Contacts:
For additional information on this sector, please contact Commercial Specialist Shweta Nagpal at Shweta.Nagpal@trade.gov or by phone at +1 (437) 333-9015