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WEEKLY VIDEO: Pro Motors Group partners with 4 Wheel Parts to offer installation of the hydrogen hybrid system.

SEPTEMBER 13, 2008: Creative Destruction - And an update on alternative fuels

by Michael Pistol

While the business world is gripped by venerable banks deathwatch, hair-raising Wall Street’ cliffhangers, Detroit Three’s bailout schemes and oil’s sudden abandonment by your pension plan or investment bank, the automotive sector’s fundamentals are quietly changing. The news may be slowly filtering in, but make no mistake, something is happening…

In the last several weeks, we noticed an unusual activity related to the alternative fuel-powered vehicles. Those disparate announcements, when put together, reveal an unstoppable shift away from oil derivates to the electric drives and natural gas.

As debt destruction of historic proportions is fundamentally changing the way business will be conducted in the near future, we cannot stop to think of the 1942 Joseph Schumpeter’s creative destruction theory.

Based on the long-wave economic cycles, his take on economic progress is that innovation allows for sustained long-term economic growth only as it destroys the value of established companies that in the previous cycle dominated their industries. For the finance and automotive sector in particular it sounds familiar and very timely, doesn’t it?

As we’ve already discussed, electric vehicles and natural gas seem to steal the headlines. And as for oil’s fate? Just see what hurricane Ike can do for prices at the pump, and think of it as a ‘dead cat bounce’, only in reverse.

Although there are many pieces that are slowly but surely building the case for oil’s exit, here is the main update:

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Ipso Facto - Fundamentals September 2008

MOBILE MARKETING: MyScreen partners with leading global advertising firm, Omnicom- Zimmerman

Toronto, Canada-based MyScreen has announced that it has partnered with national retail brand builder Zimmerman Advertising. Zimmerman is part of Omnicom, the largest worldwide advertising agency...
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INSURANCE: Hybrids trends and observations – kanetix.ca

As trends go, hybrids appear to have staying power. Recent reports have hybrid [Canadian] auto sales jumping 66 per cent, to 12,000 vehicles in the first six months of 2008...
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ECONOMY: CIBC World Markets lowers TSX, oil targets on weaker global growth and selling pressure

The world economy may be slowing but should perform above levels that sparked earlier commodity recessions, notes a new CIBC World Markets report. "With Europe in recession and Japan and the U.S. economy in borderline status...
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MANUFACTURING: Second quarter 2008 industrial capacity utilization rates - Statistics Canada

According to Statistics Canada, Canadian industries operated at 78.9% of their capacity in the second quarter, down from 79.6% in the first quarter. Capacity utilization fell for a fourth straight quarter as a result of weak exports. The automobile...
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RESOURCES 2009

CANADIAN AUTOMOTIVE INDUSTRY RESOURCES

Need results? Meet our industry's key players.
Essential data, contacts, website.

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NEWS - Seven Days___________Sept.13 - Sept.19, 2008

APPOINTMENT: Audi Canada Executive Vice – President Diego Ramos accepts position with Volkswagen Group’s SEAT SA

RESTRUCTURING: Ford Canada confirms the elimination of additional 500 jobs in Oakville.

FORECAST: 2008 U.S. Automotive Sales Forecast Remains Unchanged - J.D. Power and Associates

ACQUISITION: Clean Energy to acquire FuelMaker natural gas fueling appliances maker from Honda

PARADIGM SHIFTS - Open Source for Automotive Business Leadership /October

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Happy Birthday GM!

Fascinating week – don’t you think? The third week of September 2008, will be remembered for a long time, no doubt, and it won’t be much related to September 16 General Motors’s 100 anniversary...
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