Future is bleak for auto industry
Friday 1st November, 2013 2:02pm
Author: Toby Hagon

The future of the Australian car industry is largely in the hands of governments - and the car makers know it.

Government “assistance” is a major part of car making world wide. Manufacturers ask for money (or tax breaks, or other help that makes it more viable to build cars) and in most cases get it.

The global nature of the modern car industry means they have manufacturing plants dotted around the globe. Toyota, for example, builds the same Camry in eight plants around the world.

So the Australian manufacturing facilities on Melbourne’s southern edge aren’t just competing with cars produced locally, but with every one of those plants. If the US or Thailand can build it cheaper, for example, then from the car company’s perspective it makes sense to ship them down under rather than spend thousands more keeping Australians in jobs.

Ultimately it comes down to the local offer of financial incentives to produce cars, which help maintain a manufacturing base (something in sharp decline in Australia) and keep a long tail of suppliers (many of which export components) in business.

Car making is big – but expensive - business. Of the G20 members – a council of 20 of the world’s largest economies – all but one produces cars. And that one, Saudi Arabia, is currently working to entice a car maker to set up in its country. Along with the flow-down benefits of producing the most complex everyday item most of us will ever own it’s something Holden has been keen to point out in its years-long campaign to convince Australian governments to dig deeper.

Being on the doorstep of Asia, Australia's car makers are competing for car making business in countries as diverse as Thailand, Japan and China. All can produce cars cheaper than Australia, especially with our dollar as high as it is.

While there’s still significant support for the car industry locally, it’s also clear the public tide has turned. Many are fed up with what they see as a doomed industry. No point delaying the inevitable is a common public belief.

Others are quick to point out it’s good we don’t treat other financially supported industries the same way; agriculture, tourism and mining being the most obvious.

Either way, the fate of Holden and Toyota locally will come down to how much the Coalition values the positives the car industry can bring.

Clearly the signs are not good.

If Holden and Toyota do close their manufacturing doors, the ramifications will be a lot bigger than the 5000-odd employees directly involved with producing cars. There are about 150 parts manufacturers employing some 35,000 people. There would also be a flow on effect to other industries, such as trucking and, potentially, the highly skilled design and engineering teams.

Petrol is to high and there leting to much cheep s,,t cars come into Aus.
People stop buying Aus cars to buy cheep crap that use little fuel and you throw away after 5 years.
Does anyone now how to run and look after their own country anymore.

It seems countries like China and India are the only ones who know how to look after themselves. Unfortunately most capitalist societies are only concerned about how cheap something is and not about the quality of the product. So called "free trade" agreements are a load of crap. Australia has unfortunately become the worlds whore that gets screwed by everyone whenever they feel like it