Toronto, Ontario — In this weekly automotive-skewed economics report—your Tuesday Ticker—we cover Honda’s latest EV investment right here on Canadian soil; Martinrea’s recent decision to invest $6 million in 3D printed parts technologies; and Boyd Group’s Q4 2023 and full-year numbers as we wait for the company’s Q1 2024 results.
Electric news in Alliston, Ont.
Last week saw Honda announce a $15 billion investment to construct four new manufacturing plants in Alliston, Ont., including an EV assembly plant and a standalone battery manufacturing facility as parts of its existing Alliston facilities.
The new plants—dubbed as the start of “Canada’s first comprehensive electric vehicle supply chain”—are predicted to produce up to 240,000 vehicles per year, creating more than 1,000 “well-paying manufacturing jobs” once operational in 2028.
Provincial government funding of “up to $2.5 billion” will be provided to Honda, according to a news release.
This is the largest-ever investment by Honda in the North American market.
3D printed parts
Canadian auto parts supplier Martinrea announced a US$6 million investment in Equispheres, a private company developing “innovative technologies for the production and use of advanced materials,” like aluminum powder for additive manufacturing, or 3D printing applications.
The investment, which adds to a US$1 million investment made to Equispheres from Martinrea in April 2023, is “part of a broader strategic relationship where Martinrea will provide Equispheres with advice on issues related to manufacturing, operations and corporate strategy.”
Martinrea said Equispheres’ “proven technology enables printing speeds up to nine times faster than industry standards, thereby lowering production costs by as much as 80 percent.”
“Equispheres is a specialist in aluminum powder, and Martinrea is an expert in aluminum components,” said Pat D’Aramo, CEO of Martinrea, in a press release. “This should enable [Martinrea] to provide increasingly complex and sophisticated assemblies and other products to our customers—or what we refer to as BreakThrough products.”
Martinrea has historically supplied parts to OEMs like Ford, General Motors, Stellantis, Honda, Toyota, Volkswagen and more. The company provides components for various systems, including body and chassis; suspension and drivetrain; electronics, fuel systems and other related areas.
The repair of 3D printed parts is challenging due to inherent brittleness, which makes it highly difficult to effectively repair these components without specialized processes.
As of Monday at 11 a.m. ET, shares of Martinrea traded at CAD$11.62, down two percent over the last month and 19.5 percent year-to-date.
A financial yearbook of Boyd’s 2023
Boyd Group reported a 21.1 percent increase in sales in 2023, according to the Winnipeg, Man.-based company’s financial results report for 2023.
Sales for 2024 were reported at US$2.9 billion, up from US$2.4 billion in 2022. Same-store sales increases were reported at 15.8 percent. Boyd noted in its release that same-store sales increases for Q1 2024 “thus far…while positive, are lower than the average quarterly ten-year level of same-store sales growth of 5.9 percent.”
Adjusted net earnings for 2023 were US$86.7 million—a 111.6 percent increase over US$41 million in 2022. Net earnings per share increased an equal amount, to US$4.04 per share compared to US$1.91 in 2022.
The company added 106 new locations last year, which included 78 acquisitions and 28 start-up locations. Ten of those locations were added in Q4.
The company also noted the “performance of the business during the first quarter of 2024 has been challenged by a number of factors,” including the addition of a “record number of new single locations” during Q4 2023, which “negatively impact earnings during the first several quarters of operation and typically mature to align with overall company performance over a two- to three-year period.”
As of Monday at 11 a.m. ET, shares of Boyd traded at $256.37 per share, down 9.8 percent in the last month and down 5.9 percent year-to-date.
