Canada Invites South Korea to Join Following China’s Entry

Canada is intensifying its collaboration with South Korea following a recent trade agreement with China. The focus is on enhancing the local auto industry amid ongoing trade tensions with the United States. A forthcoming Memorandum of Understanding (MoU) aims to boost vehicle production in Canada, building on existing ties established by the free trade agreement signed in 2015.

Canada Invites South Korea to Join Following China’s Entry

As part of its strategy, Canada is engaging major South Korean companies, such as Hyundai and Hanwha, to strengthen its automotive and defense sectors. These partnerships could lead to substantial investments and job creation in Canada.

Strategic Partnerships and Investments

Hyundai is currently bidding to construct 12 submarines for Canada, a project estimated to be worth up to $100 billion over the next 30 to 40 years. The Canadian government is exploring synergies between the defense and automotive sectors. Industry Minister Mélanie Joly remarked that this agreement could enhance Canada’s auto sector and solidify its status in the manufacturing of future-ready vehicles.

Growth of South Korean Vehicles in Canada

In 2024, South Korean cars constituted 12% of new vehicle sales in Canada, totaling 228,257 units. This growing presence highlights the importance of South Korea in Canada’s auto market.

Strengthening Domestic Automotive Production

The focus now is on increasing production of electric vehicles and their components. Canada is eager to develop a more robust local supply chain for batteries through investments in manufacturing and recycling of critical minerals.

• 12% of all cars sold in Canada in 2024 were South Korean models.
• $100 billion potential submarine contract with South Korea over 30-40 years.
• Commitment of $275 million from Hanwha to establish a steel mill in Ontario.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, stated that current market conditions favor establishing manufacturing plants for electric vehicles in Canada. These developments align with defense investments that could significantly enhance the domestic auto industry while meeting the needs of substantial bidders like Hyundai.