Australia Car Manufacturing Kaput

It's gone. Many decades of car manufacturing gone with no real chance of a return. It's not just about car plants but also about suppliers and that means the logistics of ever going back to what was there is over. It started in the early 20th century and ended in 2017. So how did this come about? Here are a few reasons in no particular order.

Models. While Australians bought large cars in generous numbers, the industry prospered. As tastes changed, the product didn't so trying to sell what fewer and fewer people wanted isn't a sound business plan. Finding export markets for them was a challenge too.

Costs. Wages were very high for car assemblers in Australia, I believe in recent times in the region of nearly AUD $70,000 pa as well as generous conditions. Compare that with Australia's nearest neighbours and that meant cars could be built in Asia for much less.

Protection. Most car producers around the world protect their car industry with import duties. Countries such as China do this with high tariffs even though it is not needed anymore. Australia also gave its car industry such an advantage but it was gradually removed. It made the price of all cars lower but it also exposed local production to cheaper imported cars.

Export. As local sales fell, exports needed to grow. Of the last three car manufacturers, Ford did virtually nothing in the regard. In recent times, less than 10% was sent offshore. GM did sent cars mainly to the US as Pontiacs but the demise of that brand wiped that out. It did manage to stay above 10% but not by much. Toyota exported cars to the Middle East and two thirds of production was sent overseas. Had the other two managed anything like that, I wouldn't be writing this article.

Exchange. A successful mining industry meant a higher dollar value and that wasn't helpful for exporting.

Scale. While the car industry has needed to increase production numbers to keep costs down, Australian car production was going the other way. Assembly numbers once in the 300-400k pa were more recently down to 200k and less. This was due to all the afore mentioned issues.  

Summary. The government ended up subsidising the industry but realised that it would have to be a permanent assistance, something that wasn't popular in many circles. Trade protection would have negated that cost to government coffers, but then the car buyer would be subsidising the industry instead. There was no other option but to close it down.

Once Ford decided that, the others were obliged to follow as suppliers had too few cars at make components for. Toyota's first overseas assembly plant was in Australia and this is the first major plant it has closed down. Time had run out for Australian car manufacturing.