Canada has seen a change in government since the signing of the Trans-Pacific Partnership (TPP) agreement in October of 2015. As the new Liberal government reviews the TPP, AIA has a prepared a special spotlight research piece on the agreement and its possible impact on the automotive aftermarket. Here are some AIA observations for the aftermarket:
- TPP is not likely to have a great impact on the automotive aftermarket.
- Parts distributors and service providers may benefit slightly if imported parts become cheaper, and in the longer term, if sales of new vehicles increase because of cheaper imports and marginally higher income for Canadians.
- Manufacturers who produce in Canada could be impacted by increased import competition, but could also benefit from tariff-free access to TPP countries. However, import competition is not a particular threat because the Canadian tariffs being eliminated are quite modest.
- If the TPP is ratified, aftermarket companies, especially manufacturers, are more likely to be affected by other economic forces such as technological change, exchange rate movements, and climate change initiatives, then by the agreement.
The full report will be made available in the upcoming weeks. Stay tuned for access to this members' only report.