CANADA: Canadian finance aims to lure VW work for local firms
Export Development Canada (EDC) has announced financing of EUR400m for Volkswagen Group (Volkswagen).
The corporate finance is focused upon the automaker's expansion of its operations in the southern US and Mexico.
The finance is intended 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.
Volkswagen Group consists of 12 brands from seven countries and held a 12.9% share of the 2014 world passenger car market. The group generated sales revenues of EUR202.5bn and an operating profit of EUR12.7bn in 2014.
EDC is Canada's leading provider of financing and insurance for Canadian businesses with sales or business in other countries.
"This financing is really about relationship building, both for EDC and Canadian SMEs in the tooling and automotive supply industries," said Carl Burlock, senior vice-president, financing and investment, EDC.
"The value here 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."
EDC targets companies like Volkswagen whose procurement needs match up with Canadian expertise. Once EDC's team has a detailed understanding of a company's supply chain and business goals they will provide introductions to qualified Canadian companies with well-matched expertise.
"With the southern US 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," added Burlock.
"When Canadian companies win business after our introductions, they won't be left on their own. EDC can provide them with financing and insurance solutions to support their growth in these new markets."