All Australian production will cease in 2017
- Australian production has continuously declined over the last ten years. Today only three major car producers manufacture in Australia: Toyota, General-Motors (Holden) and Ford. Mitsubishi ended its industrial activity in 2008. Ford will pull out in 2016, and the remaining two have decided they will cease activities in 2017.
- These manufacturers are leaving Australia as the country is no longer a competitive base. Wages in the Australian automobile industry are among the highest in the developed world and cannot compete with the wages of its South-East Asian neighbours. Holden, which produces fewer than 80 000 cars a year at its factory in Adelaide, estimates that the difference between production at its Australian site and the average for its other sites 3750 dollars per car. Australia is the second most expensive country for the production of car parts, mainly due to its geographical location.
- Besides this, the cost advantage of producing cars domestically is weak due to the low tariff barriers imposed on imports. And finally, manufacturers are faced with a relatively modest local market (just over a million new cars bought each year) which is very competitive, exports little, and is not an attractive location to set up a factory.
- Hence the progressive increase in imports over the last ten years, from 600 000 units in 2005 to 900 000 in 2015. Following the closure of Australian factories in 2016 and 2017, local registrations will consist only of imported vehicles, mainly from South-East Asia, Korea and Japan.
Contact us: info@inovev.com