Canada automotive industry reset: what’s changing in 2026

Canada automotive industry reset
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Canada’s auto sector is going through a “reset” as trade uncertainty and U.S. tariffs on auto parts pressure manufacturers and suppliers to cut risk and control costs.​
A KPMG Canada survey cited by Canadian Auto Dealer says 63% of OEMs and suppliers have already raised prices because of the tariff environment, and 62% have changed their product mix to reduce exposure.

Canada automotive industry reset: why prices and choices may change

The survey suggests companies are prioritizing operational stability, with 82% adjusting supply chain strategies and 70% exploring international markets.
For consumers, that can show up as higher prices, fewer “good value” trims, and more changes in what is available at dealers, especially if parts sourcing shifts or becomes more expensive.

What you should do if you’re shopping soon

  • Use these practical moves to protect your budget and avoid surprises:

    • Compare total cost, not just sticker price: If prices rise (63% reported raising prices), your best “deal” might be the model with lower fuel use, cheaper insurance, or lower maintenance in your area.

    • Be flexible on trim and colour: Since 62% said they changed product mix, the exact version you want may be harder to find, so build a shortlist of 2 to 3 acceptable trims.​

    • Get written out-the-door numbers: Ask for the full breakdown (vehicle price, fees, tax, add-ons) so you can compare offers cleanly across dealers.

    • If you’re buying used, check recall history: Trade disruptions can shift parts supply, so staying on top of recalls and repairs becomes even more important.

    • Time your purchase around needs, not headlines: This “reset” may take years, so if your current car is unreliable, delaying too long can cost more in repairs than you save by waiting.

Why AI matters to buyers (in plain language)

The survey says 69% of respondents are investing heavily in artificial intelligence, and 20% reported AI-driven productivity gains over 25%.​
For buyers, this is less about robots “taking jobs” and more about companies trying to build cars faster, plan inventory better, reduce defects, and lower costs in a tough tariff environment.

Simple “watch list” for consumers

Over the next months, these are the signals that actually matter for your wallet:

  • Price movements on high-volume models (new and used) as tariffs ripple through the supply chain.​

  • Changes in trims (features removed, new “packages,” fewer choices) because companies adjust product mix.​

  • Availability and wait times if sourcing changes are still settling.​

  • Dealer experience changes as the industry adapts to more online shopping and changing service patterns.​