Canadians call for a new automotive strategy to build Canada strong

With as many as six in 10 Canadians in the market to buy a new vehicle within the next five years, three-quarters are worried the ongoing uncertainty in the automotive industry will result in sharply higher prices, making new vehicles unaffordable, finds a new KPMG Canada survey. While price and brand trust are the determining factors when Canadians buy a new automobile, the findings reveal that they have also become attuned to where vehicles are being made, with 72 per cent saying it’s very or somewhat important to them 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,” says Dave Power, Partner and National Automotive Sector Leader, 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. 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.”

“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,” he says. “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.”

Key survey highlights:

• 61 per cent of Canadians plan to buy a new car within the next five years
• 62 per cent won’t spend more than $50,000 on a new automobile, down from 75 per cent in a 2022 KPMG survey
  • 39 per cent plan to spend between $30,000 and $50,000, while 23 per cent will only spend under $30,000
• Price and brand are the two most important considerations when buying a new vehicle, with 80 per cent saying price, and 71 per cent saying brand trust and reputation
• 76 per cent say they are worried that ongoing trade tensions and tariffs will make new vehicles unaffordable
• 72 per cent are concerned new vehicle prices will rise if Canada’s auto industry loses protection under the Canada – U.S. – Mexico Agreement (CUSMA), especially given potential U.S. trade policies
• Nearly a quarter (23 per cent) worry that tariffs have priced them out of the new vehicle market and another 10-15 per cent increase in vehicle prices would push another 38 per cent of consumers out of the market
• 72 per cent say it’s important that their vehicle is assembled or built in Canada,
  • 23 per cent very important
  • 49 per cent somewhat important

Support shifts toward domestic capacity

Canadians want government support directed where it enhances domestic production and resilience. While all five original equipment manufacturers (OEM) operating in Ontario have historically benefited from government support, only 7 per cent believe subsidies should continue flowing to the Detroit 3, the KPMG survey finds. Instead, 37 per cent want funding directed to Canada’s auto parts supply industry to protect Canadian manufacturing and supply chain stability. Fifty-eight per cent also said they support diversification into defence manufacturing.

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

Preparing for a post-CUSMA future

With CUSMA set for review next year, nearly three-quarters (72 per cent) of Canadians worry vehicle prices will rise if Canada’s industry loses protection under the agreement. Canadians strongly support a transition that moves away from U.S. reliance and prioritizes defence manufacturing, parts manufacturing and battery and critical minerals production.

“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,” says Joy Nott, Partner, Trade and Customs. “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.”

Indeed, half (51 per cent) believe Canada’s automotive industry cannot survive without trade protections or a new trade agreement with the U.S. and six in 10 (59 per cent) support subjecting domestic automakers to Canadian tariffs if they relocate assembly lines to the U.S., the research finds.

EV and battery leadership seen as a national opportunity

More than half of Canadians (55 per cent) believe Canada could become a global leader in electric vehicles (EVs) in order to reduce its reliance on the U.S. auto industry. Nearly as many (52 per cent) expressed a desire for governments to make this a priority. “And with billions already committed to new battery and EV charging facilities in Ontario and Quebec, momentum is building toward a made-in-Canada ecosystem for cleantech exports in renewable energy, EVs and electrification,” adds Mr. Power.

“With all the turmoil in the auto sector, Canada has a real opportunity to invest at home and diversify into EV battery production to protect jobs, attract investment, and build long-term resilience,” he says. “We have everything to lead the EV transition, including critical minerals, innovation, talent, and manufacturing capacity. What’s needed is a clear roadmap to accelerate Canada’s leadership, bearing in mind that building affordable EVs will be essential, particularly to compete with lower-cost models from foreign manufacturers, as will significant investment in a robust charging infrastructure.”

Additional survey findings:

• 60 per cent say governments should provide financial support and incentives to keep automakers operating in Canada
• When asked to indicate how government support should be prioritized, 37 per cent said it should support jobs and production specifically in Canada’s auto parts supply industry to protect Canadian manufacturing and supply chain stability; 21 per cent want governments to focus on industries where Canada can be more competitive; 15 per cent say both the OEMs and auto parts suppliers should be supported equally; and, only 7 per cent believe supporting jobs and production among Canada’s Detroit 3 manufacturing operations should be prioritized
• 51 per cent believe Canada’s automotive industry cannot survive without trade protections or a new trade agreement with the U.S.
• 59 per cent believe that auto manufacturers in Canada should be subject to (higher) tariffs if they move to the U.S.
• 58 per cent think the auto industry should diversify into defence manufacturing to save jobs
• 55 per cent say Canada has the potential to become a global leader in EVs, reducing its reliance on the U.S. auto industry
• 52 per cent say Canada should prioritize becoming a leader in EVs and battery production
• Over half (55 per cent) plan to purchase an environmentally friendly car next: hybrid (33 per cent), plug-in hybrid (11 per cent), fully electric (11 per cent)
• 63 per cent say plug-in hybrids should be included in Canada’s EV mandate
• Only 25 per cent would consider buying an EV manufactured by a major technology company, down sharply from 49 per cent in a 2022 KPMG survey
• Nearly half (47 per cent) support removing tariffs on EVs from China, 23 per cent disagree and 30 per cent are unsure.

About the 2025 KPMG Consumer Automotive Survey

KPMG in Canada surveyed 2,000 Canadians between the ages of 18-85 , from November 7 to November 17, 2025, on Sago's AskingCanadians panel, using its Methodify online research platform. Forty-nine per cent of respondents were male, 51 per cent were female. Twenty-four per cent have annual gross incomes under $49,900; 35 per cent between $50,000 to $100,000; 42 per cent $100,000 and over. Thirty-eight per cent live in Ontario, 24 per cent in Quebec, 31 per cent in Western Canada and seven per cent in Eastern Canada.