How Millennials and Uber will affect Ford's Oakville plant

Ontario's auto industry may not be what it used to be, but the province still holds the distinction of producing more cars than any other jurisdiction in North America.

Six of the world's leading auto makers have assembly plants in southern Ontario, despite the higher costs of manufacturing here. Among them, Ford, which produces its Edge model (and others)at a plant in Oakville.

While the cars coming off the line are looking their shiny best, the manufacturing sector that produces them faces challenges from competition elsewhere in North America.

Part of that can be attributed to economics, the low Canadian dollar and the price of oil, but more of it has to do with emerging trends.

And, though it's largely written and awaiting ratification, there is much concern over Canada's participation in the Trans-Pacific Partnership (TPP).

Dianne Craig, the president and CEO of Ford Motor Company Canada, is in the middle of all that competition and concern at the Canadian International Auto Show.

Craig talked a bit to Metro Morning about Ford's Canadian landscape.

Metro Morning6:31Auto Market

The Auto Show is underway at the Metro Toronto Convention Centre. Guest host David Common spoke with Dianne Craig, she is the President and CEO of Ford Canada.

"When the Canadian dollar drops, there are some positives and there are some negatives," she said, noting exporters had greater leverage on prices. "We don't look at the loonie today, we look at it over a 10-year horizon."

But at a show thatdebuted the Tesla Model X, an all-electric SUV, the talk of what consumers were interested in sparked the most interest.

"We're seeing a big shift ... into SUVs and even full-sized pickups is something we saw in 2015 that frankly we didn't anticipate," she said.

That shift is likely to continue into 2016.

Milliennials and self-driving cars

Speaking about what'scoming on the horizon, the conversation shifts to emerging technology like Uber and emerging generations, like Millennials.

Craig said car ownership may be affected by changing technology and demographics, but there comes a time in many people's lives when a car is a necessity.

"There was a lot of conversation about Millennials buying vehicles, not buying vehicles, deferring their decisions ... But ultimately when Millennials decide to start a family, utilities are a terrific opportunity for them."

She is confident that within five years, driverless cars will fully be a reality.

She said that is competition for Ford. Not necessarily the cars themselves she said that Ford had the largest fleet of autonomous vehicles in the U.S. but for mobility. "We have to understand what the emerging trends are. We can't be afraid of that," she said of the challenge.

But even with those new vehicles driving around, on their own, car ownership will likely be an inevitability.

"Clearly there are going to be consumers, whether or not they live in an urban space, who say, 'I don't need a car anymore,'" she said when driverless vehicles arrive.

"But ultimately, again it gets back to when your lifestyle changes. And you need a car, and a driveway, and your family is bigger and you don't want to be carting around car seats every time you switch vehicles."

Trade concerns

Though consumer behaviour is a excuse the pun driver of Ford's fortunes in Canada, the company is an exporter here, and trade policy is something it is fully involved with.

On that front, Craig and Ford have been vocal about their concerns over theTrans-Pacific Partnership.

"We're a company that's built on free trade," she said. "But we believe in making sure we have fair trade."

Craig said the company is in full support of the Canadian European Trade Agreement, a deal with Eurozone countries that have allowed Ford to ship Ford Edges made in Oakville to countries in Europe.

In fact, Canada's signing of a free trade deal with the EU contributed to Ford's decision to expand production of theEdge here in Canada for the European market.

But that as it stands today, the TPP agreement won't give Ford those benefits, the CEO said.

"TPP is different," she said. "There is no upside to Canadian manufacturing from an export standpoint."

Craig called Japan, for instance, "a closed market,"and said the deal doesn't represent the wishes of the Canadian auto sector.

Still, 2015 was called a "breakthrough year" by Bob Shanks, Ford's chief financial officer. Improving sales in most of the world helped Ford Motor Co. achieve a record pretax profit in 2015, and the company says the numbers could go even higher this year. Its F-Series pickup remained the bestselling vehicle in the U.S. for the 34th straight year. It's also the best-selling pickup in Canada, according to DesRosiersAutomotive Consultants.

First opened in 1953, the Oakville assembly plant also produces the Ford Flex and the Lincoln MKT. It will also begin production of the 2016 Lincoln MKX this year.