Canada's auto sector remains healthy but must be innovative, if it wants to continue to be a global player is the main theme coming out of a KPMG report, "The State of Canada's Auto Sector: Recalculating the Road Ahead."
Peter Hatges is a partner at KPMG and National Sector Leader for the Automotive Group in Canada who thinks Canada has to be forward-thinking when it comes to changing technologies being used in the auto sector.
He believes Canada needs to invest in and develop the types of things that will be crucially important to automakers including light-weight materials and technology.
"I'm pretty optimistic that we can still build and assemble," he says. "I think there's a lot of technology that goes into the build and assembly. But let's face it, you're going to build and assemble if you're close to source to other component parts. If it makes it easy to put it all together in one place, that's where you're going to do it."
Hatges believes innovation will help Canada win out over lower cost labour markets saying, "The name of the game today is, can you solve my problem with something other than inexpensive labour."
The report also indicates that in order for Canadian suppliers to stand-out in the global market, they must contribute quality improvements, technology advances, and cost savings to leading manufacturers which includes tapping into Canada's world-leading tech hubs.
In an announcement on Thursday, the Ford government announced $40-million over three-years for a new auto sector plan.
It includes an auto modernization program, internships and an online learning and training portal.
The funding is part of a 10-year plan for strengthening the auto sector's competitiveness.