Canada to Finance Volkswagen Expansion in the U.S., Mexico
Canada’s trade finance agency, Export Development Canada (EDC), will be financing the Germany-based Volkswagen Group’s expansion of its operations in the U.S. and Mexico to the tune of about $444 million.
The financing “is designed to create opportunities for qualified small and medium-sized Canadian companies to win new business with the global automotive giant as they grow their operations in North America,” the EDC says.
Volkswagen Group, one of the world’s leading automobile manufacturers, comprises twelve brands from seven countries, and holds a 12.9 percent share of the 2014 world passenger car market.
SOUTHERN U.S., MEXICO ARE “PRIME LOCATIONS FOR GLOBAL AUTOMAKERS”
“This financing is really about relationship building, both for EDC and Canadian SMEs in the tooling and automotive supply industries,” says Carl Burlock, senior vice president of financing and investment at the EDC in Ottawa.
The value “is that qualified Canadian SMEs get a real chance to be considered by a major industry player, where they might not have an opportunity to gain that kind of access on their own,” he adds.
“With the southern U.S. and Mexico increasingly becoming prime production locations for global automakers, EDC has a role to play in making sure that Canadian companies have the opportunity and financial wherewithal to compete for that business,” says Burlock.
Volkswagen purchased $85 million worth of parts from Canadian suppliers last year, according to the Canadian Automotive Parts Manufacturers’ Association (APMA).