The automotive industry, for one, seeks more local suppliers for the major players’ global operations – and more of our parts manufacturers need to go down that road to keep competitive.
It has now been just over a year since I took over responsibility as advisor for the Transportation Sector at EDC. Over this period, in my discussions with EDC’s clients, prospects, and partners, one theme has been prevalent — localization.
In other words, when I am speaking with procurement executives from some of the major original equipment manufacturers (OEMs) or Tier 1 firms that EDC finances, they all want to meet with new suppliers that have operations local to their global assembly plants and other production facilities — every single one of them. Not surprising – considering the industry focus is on global platforms, cost reduction, and short lead times for delivery of parts and components by suppliers at all levels of the supply chain
In my discussions with Canadian parts suppliers over the past year, there still seems to be hesitation to expand beyond our borders for those who haven’t done so already. “It’s too risky,” “We don’t have any contracts to justify it,” “We don’t know the regulations,” and “We don’t have the financial means to do it” are some of the reasons we are hearing. It’s unfortunate, because, like it or not, markets such as Mexico, Brazil, China and India all represent huge growth opportunities for Canadian suppliers.
EDC’s efforts this year are focused on addressing some of the issues mentioned above, which get in the way of Canadian companies expanding into those markets. We will be hosting webinars highlighting some of the opportunities abroad, while addressing some of the key lessons learned by those that are already there.
We will also be leveraging our OEM and Tier 1 procurement contacts through both in-bound and out-bound trade missions and matchmaking events to introduce them to Canadian suppliers. And we will continue providing both financing and insurance solutions to encourage more Canadian direct investment abroad (CDIA), by addressing key financial issues that companies have raised in our previous discussions — such as, risk and working capital financing.
The next major automotive trade event in which EDC will participate is the Automotive Parts Manufacturers’ Association (APMA) Conference in June in Windsor, Ontario, where we will be partnering in the B2B program. For more information, visit: APMA web site