Survey says most Canadians want auto strategy focused on domestic manufacturing

Nearly three in four Canadians worry ongoing trade tensions and tariffs will push new vehicle prices out of reach, according to a new KPMG Canada survey, even as six in 10 say they plan to buy a new car within the next five years.

The survey found 61 per cent of Canadians expect to purchase a new vehicle in that time frame, but 62 per cent say they would not spend more than $50,000, down from 75 per cent in a 2022 KPMG survey. Price and brand trust remain the top considerations for buyers, cited by 80 per cent and 71 per cent respectively.

Canadians are also paying closer attention to where vehicles are made. Seventy-two per cent say it is very or somewhat important that their vehicle is assembled or built in Canada.

“With U.S. tariffs disrupting the industry, Canadians in the market for a new vehicle are looking to the brands they trust at prices they can afford in models they want, and increasingly, on where those vehicles are built,” said Dave Power, partner and national automotive sector leader at KPMG in Canada.

“Car buyers are looking for vehicles that meet their lifestyle, are affordable and have a positive economic impact on the country. It’s not surprising that Toyota and Honda, which each have a large manufacturing presence in Ontario, resonate most with Canadian consumers,” he said. “At the same time, trust in the Detroit 3 is starting to erode as Canadians see a lack of commitment to keep jobs in Canada, driven by U.S. trade policies and pressures on company leadership to move operations to the U.S.”

The survey found 76 per cent of respondents are concerned that trade tensions will make new vehicles unaffordable, while 72 per cent worry prices will rise if Canada’s auto sector loses protection under the Canada–United States–Mexico Agreement (CUSMA). Nearly a quarter said tariffs have already priced them out of the new-vehicle market.

“As consumer concerns collide with ongoing trade tensions and tariffs threatening to upend decades of cross-border stability, Canada’s automotive sector needs to carefully consider its future and what changes might be warranted,” Power said. “Canadians are calling for a new automotive strategy, which prioritizes domestic manufacturing, secures jobs, provides long-term resilience, and positions Canada as a leader in electric vehicles and battery production.”

Support for government subsidies is shifting away from traditional automakers, the survey found. Only seven per cent of respondents believe funding should continue flowing to the Detroit 3, while 37 per cent want support directed to Canada’s auto parts supply industry. Fifty-eight per cent also support diversification into defence manufacturing.

“People want long-term strategy, not short-term patches,” Power said. “Canadians are calling for strategic investments that safeguard manufacturing jobs while strengthening the foundation for the entire automotive ecosystem.”

With CUSMA set for review next year, nearly three-quarters of Canadians said they are concerned about rising prices if trade protections weaken. Half believe Canada’s automotive industry cannot survive without trade protections or a new agreement with the United States.

“If the CUSMA rules of origin change substantially to require even more North American content, this could have a dramatic impact on existing automotive supply chains,” said Joy Nott, partner, trade and customs at KPMG. “This disruption would require a search for new North American suppliers to replace overseas manufacturing. While disruptive and likely to increase costs, this change could also create opportunities for Canadian manufacturers to expand and diversify their business.”

More than half of respondents said Canada could become a global leader in electric vehicles and battery production, with 52 per cent calling on governments to make it a priority. Fifty-five per cent said their next vehicle purchase is likely to be a hybrid or electric model.