Autonet.ca

If ever there were any doubt that the auto industry is back to business as usual, you only need look as far back as the recent announcement at southern Ontario’s CAMI manufacturing complex.

For those unaware of the announcement, politicians came out to the General Motors/Suzuki joint venture plant in Ingersoll, Ont., to announce a $90 million investment that would go toward increasing production of the Chevrolet Equinox and GMC Terrain models built at the complex, and to announce the recall of 150 workers downsized during the credit crunch at the beginning of 2009.

That’s good news for a company that has undergone massive restructuring, as well as for an industry that seemed to go into a death spiral as a result of the credit crisis.

And although just about every Ontarian welcomes every bit of good news concerning the eroding manufacturing base, it does potentially reassign development that may have been slated for GM’s home-base of Oshawa, Ontario. GM had earlier announced it would build a new Buick Regal (derived from the 2010 LaCrosse) in Oshawa.

Also on the “business as usual front”, though, is the fact that the current build philosophy seems to remain with larger utility vehicles or premium cars. Back in February 2009, the thinking was that General Motors and Chrysler were faltering because they had spent far too long catering to truck buyers while neglecting the economical smaller vehicles that were going to be in demand as gasoline extinction drew ever closer.

We accused the two of not building the vehicles North Americans wanted to buy, but apparently that “want to buy” thinking was only a temporary blip and the downturn in fortunes was a result of a “perfect storm” that pounded the companies’ strongholds.

Gas prices went through the ceiling in the summer of 2008, leading many consumers to consider trading in their large, gas guzzling vehicles. The housing crisis hit in the fall of 2008, causing many contractors to put off leasing those extra-large pickups they required for everyday work chores. The creditor protection and axing of certain dealerships and model lines made many potential buyers put off planned car purchases.

With the easing of those pressures, it’s once again obvious that North Americans still prefer their seven-seaters over econo-boxes (especially in the U.S.) and given their druthers, manufacturers are more willing to invest in good big vehicles because the per-vehicle profit margin is bigger on larger vehicles ... more sales + greater profit per vehicle = a quicker turnaround.

If all things keep going the way they are starting to go, it looks as if we’ll be back to building large pickups and SUVs in no time flat... at least until the next episode five to seven years down the road.