OTTAWA, ONT. – Export Development Canada (EDC) will finance a $526 million (Euro 400 million) loan to Germany-based Volkswagen Group in an effort to create opportunities for small and medium-sized Canadian companies to win new business with the global automotive giant.
Despite the fact the corporate financing will focus on Volkswagen's expansion of its operations in the U.S. and Mexico and not in Canada, EDC senior V-P Carl Burlock says the deal is really about relationship building.
“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,” Burlock says in the release.
Volkswagen Group is one of the world's biggest automobile manufacturers comprising 12 brands from seven countries. It currently holds a 12.9 per cent share of the 2014 world passenger car market. The group generated sales revenues of Euro 202.5 billion and an operating profit of Euro 12.7 billion in 2014.
EDC provides financing and insurance for Canadian businesses with sales or business in other countries. It says it 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 U.S. 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,” he adds.
Qualified Canadian companies that may have an offer for Volkswagen can contact EDC at 1-888-434-8508 or register their services on Enterprise Canada Network, a joint venture between EDC and Canadian Manufacturers and Exporters.
The website works by matching profiles of Canadian selling companies that post what kind of services and products they have expertise and buying companies that post what kind of services and products they are looking for.
There are currently more than 30,000 opportunity profiles posted through the European Commission's Enterprise Europe Network, which the ECN links to.