Canada’s auto manufacturers are expected to lose money again in 2007, before slowly returning to profitability beginning in 2008, according to a Conference Board report released today.

The report coincides with the news that Chrysler LLC announced it will eliminate about 1,100 jobs in Brampton, Ont. as part of its second restructuring in eight months.

Chrysler will eliminate a shift at its Brampton plant as part of a plan to wipe out 8,500 to 10,000 jobs in North America.

“Loss of market share by the Big Three automakers and the rise of the loonie have taken a toll on Canada’s auto industry,” says. Louis Thériault, Director, Canadian Industrial Outlook Service. “However, the opening of Toyota’s new Woodstock plant in early 2008 will help to increase domestic production and boost revenues for the sector. Improved production combined with major efforts by the Big Three to restructure will lead to a small industry profit of $850 million in 2008.”

Industry losses are expected to decline to $550 million in 2007, about half of the loss recorded in 2006. While the high Canadian dollar is hurting export prices-thereby cutting revenues-costs are declining even further because of job cuts, lower production and cheaper imported parts as a result of the strong loonie.

Although profits are forecast to continue growing through 2011, profit margins in the motor vehicle manufacturing industry will remain extremely slim because material and labour costs are expected to increase.