Canadian vehicle production declined 15% through April compared with 2025 levels.
Canada accounted for 45% of tariff-related market-share losses among U.S. trading partners.
Weakening U.S. consumer confidence could further pressure Canadian vehicle exports and assembly operations.
Canadian vehicle manufacturing has suffered the sharpest decline among North American production centres as U.S. tariff policies continue to hammer automotive trade flows.
Speaking at the Center for Automotive Research CAR’s Management Briefing Seminars in Michigan, Chief Economist Tyler Harp said Canadian vehicle output fell 15% year over year through April, while U.S. production increased 1.2% over the same period. The figures suggest assembly activity is becoming increasingly concentrated in the United States following the introduction of new trade measures.
Industry production data indicate that Canadian assembly plants produced roughly 64,000 fewer vehicles during the first four months of 2026 than a year earlier. By contrast, U.S. factories added approximately 44,000 units during the same timeframe.
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Several factors contributed to Canada’s lower output. At Toyota Canada, production of the RAV4 was temporarily reduced while the Woodstock, Ont., facility prepared for the next-generation model. General Motors also suspended operations at its CAMI Assembly Plant in Ingersoll following the discontinuation of BrightDrop electric delivery vans, though this was in late 2025. In Oshawa, GM reduced Chevrolet Silverado production, citing changing trade conditions.
Even with these operational factors considered, CAR’s analysis suggests tariffs are influencing production decisions across the region. Harp reported that vehicles assembled in the United States gained nearly 6 percentage points in market share after the tariff was implemented.
Canada accounted for 45% of the market-share losses recorded among U.S. trading partners, the largest share of any individual country. Combined, Canada and Mexico represented 69% of total market-share losses identified in the analysis. According to Harp, the tariff framework appears to be redistributing production and sales within North America rather than significantly reducing imports from overseas markets.
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Canadian-built vehicles remain exposed despite high levels of U.S. content. CAR estimates effective tariff rates on many Canadian vehicle exports to the United States range between 12 and 13%. These rates are comparable to those imposed on vehicles from countries such as Japan, South Korea and the United Kingdom.
Looking ahead, demand conditions could create additional challenges. Consumer confidence indicators in the United States weakened during the spring, raising concerns about future vehicle sales. Because most Canadian-built vehicles are exported south of the border, any slowdown in U.S. purchasing activity could place further pressure on assembly operations in Ontario.
Several major Canadian-produced models also reported weaker U.S. sales during the first quarter, including the Toyota RAV4, Chrysler Pacifica, Honda CR-V, Honda Civic, Chevrolet Silverado and Ford F-Series.
Source: Automotive News
