EDC lends cash to Volkswagen in bid to help Canadian parts suppliers
The Canadian Press | Posted: April 23, 2015 2:26 PM | Last Updated: April 23, 2015
Federal agency hopes small Canadian auto parts makers can supply VW's U.S. and Mexico plants
Export Development Canada is lending Germany's Volkswagen Group 400 million euros ($526 million) in a move to boost sales by Canadian suppliers to the global auto giant.
The financing is focused on Volkswagen's expansion in the southern U.S. and Mexico.
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It's designed to create opportunities for small- and medium-sized Canadian enterprises (SMEs) to win new business with the automaker as it expands in North America.
Carl Burlock, the EDC's senior vice-president, financing and investment, says the financing is about relationship-building, both for EDC and Canadian SMEs in the tooling and automotive supply industries.
He says the loan gives qualified Canadian SMEs a real chance to be considered by a major industry player in ways they might not have been able to manage on their own.
Competing to supply Mexico
Volkswagen Group is one of the world's leading automobile manufacturers, boasting a 12.9 per cent share of the world passenger car market in 2014. However, it does not have an assembly presence in Canada.
The EDC, Canada's leading provider of financing and insurance for Canadian businesses with sales or business in other countries, targets companies like Volkswagen whose procurement needs match up with Canadian expertise.
"With the southern U.S. and Mexico increasingly becoming prime production locations for global automakers, EDC has a role to play in making sure that Canadian companies have the opportunity and financial wherewithal to compete for that business," Burlock said in a statement.
"When Canadian companies win business after our introductions, they won't be left on their own. EDC can provide them with financing and insurance solutions to support their growth in these new markets."