As part of its continued efforts to court the car-making nations of the world, the Canadian government has signed a memorandum of understanding that could someday lead to South Korean automakers assembling vehicles in Canada.
In a release, the government wrote that a forum on Canada-Korea industrial collaboration is being established. Per the Canadian Press, Minister of Industry Mélanie Joly said that the memorandum of understanding focuses on “economic prosperity and supply chain resilience.”
Together, the countries aim to grow South Korea’s automotive industrial footprint in Canada and to create electric vehicle (EV) manufacturing opportunities. South Korean automakers already have a strong foothold in Canada and, in 2024, 12 per cent of all vehicles sold here were made by Hyundai, Kia, and Genesis.
The Globe and Mail reports that the agreement has grown out of South Korea’s campaign to sign a multibillion-dollar contract to supply the Royal Canadian Navy with up to 12 submarines. The Asian nation is reportedly in competition with Germany, which was also asked to facilitate auto production in Canada, for the naval contract.
Meanwhile, the Canadian government is on a mission to support its automotive industry. The segment has been hard hit by souring trade relations with the United States. Washington imposed steep duties on Canadian-made products, leading a number of automakers, especially American brands, to pull back on Canadian manufacturing.
Just today, General Motors announced that it is laying off around 500 workers in Oshawa, Ont., after terminating the plant’s third shift. The move follows the automaker’s decision to end production of the Brightdrop electric delivery vehicle and idle its plant in Ingersoll, Ont.
Meanwhile, Stellantis — which owns American brands such as Jeep, Chrysler, Ram, and Dodge — announced late last year that it was changing its plans and moving production of the Compass to the U.S., leaving its Brampton, Ont., plant without any products to assemble.
In the wake of Washington’s trade aggression, Ottawa has looked elsewhere for stability. Earlier this month, Prime Minister Mark Carney opened automotive trade with China, announcing that he had signed a deal to allow 49,000 Chinese-assembled vehicles to be imported into Canada per year at a preferred tariff rate.
