Why Chinese ‘knock-down’ car kits could spell catastrophe for Canadian automakers
April 13, 2026
Many in the sector fear that the scaled-down plants will displace existing auto manufacturing and erase thousands of jobs
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Prime Minister Mark Carney has hailed the impending arrival of Chinese-made electric vehicles as a way to bring affordable cars to the country and as a way “to protect and create new auto manufacturing careers for Canadian workers.”
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But many within the auto sector fear the opposite, that Chinese EV makers will build scaled-down plants that displace existing auto manufacturing and erase thousands of jobs.
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Among the biggest fears, voiced by everyone from labour union officials to Ontario Premier Doug Ford, is that Chinese companies could send “knock-down kits,” sometimes referred to as CKDs (Complete Knock Downs).
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In the worst-case scenario, these vehicles would be entirely manufactured in China, but shipped to Canada as a kit for final reassembly, creating a void for the network of auto-parts companies in Ontario that sell components and services to the assembly plants located there.
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“The general public doesn’t understand the difference between knock-down kits and full assembly,” Flavio Volpe, president of the Auto Parts Manufacturers’ Association of Canada, said. “When you buy furniture from Ikea, you bring it home and you put it together. That’s not you manufacturing a sofa and that’s what a CKD kit is from China.”
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Earlier this month, Unifor, the largest labour union representing auto workers, said Stellantis NV is considering a plan to reopen its Brampton, Ont., plant using CKD kits. Stellantis has neither confirmed nor denied if that’s its plan.
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“We are in active discussions with government officials and key stakeholders to ensure that the conditions for success are in place to support continued investment in Canada,” the company said. “We have nothing to announce.”
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Federal Industry Minister Mélanie Joly has also voiced opposition to the plan to ship cars in kits to Ontario, but the federal government has revealed little about how its plan for China to ship 49,000 electric vehicles to Canada at a 6.1 per cent duty rate will work, including who will choose which models are sent.
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There have been reports that Chinese EV maker BYD Co. Ltd. is interested in setting up a dealership network in Canada, although some industry sources have said that makes little sense given the number of vehicles being allowed to enter the country. Other Chinese brands are also reportedly interested in selling in Canada.
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Like other automakers operating in Canada, Stellantis has a joint-venture partnership with a Chinese EV maker, although it has not said it plans to operate such a partnership in Canada. But last year, Stellantis hit pause on a multi-year renovation of its Brampton assembly plant.
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Against this backdrop, some in the sector have asked whether reopening a closed plant with CKDs is better than keeping it closed.
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Volpe provided back-of-the-envelope math to show why he believes a CKD plant would erase billions of dollars in economic activity and eliminate thousands of jobs. His numbers were then cross-checked against public data to ensure they were fair.
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