Just when you thought the worst news that the Australian auto industry could get was Ford getting ready to stop production in the country, Holden and Toyota, the last two major companies building cars there have both intimated that they were eyeballing an exodus as well. Holden has been vocal in its approach telling the media that they need to start saving a couple hundred dollars per week per worker to make it worth their while to stay in production on Aussie shores. Toyota has said virtually the same things but in a far quieter and less public way. In looking back through recent years, this seems to be a pattern with Holden as they pressure the government for subsidies and generally get them or at least something close for what they were asking for. The problem of course is that this is not a sustainable solution and at some point, they’re going to pull the plug and all the stories we keep reading are mentioning the year 2022 as some sort of potential drop dead date for these companies. Toyota made almost $150 million dollars through its Australian business last year but claimed that the three previous years of losses all but offset that.
The Australian automotive market averages about one million sales per year. The companies involved are claiming that the costs of production between materials, workers, and other expenses are making it impossible to build cars in Australia and make a profit. Where else have we heard this argument before? Oh yeah, right here at home. GM’s recent announcement of a massive investment in Mexican manufacturing sure looks exceptionally more ominous in the face of the Australian situation.
As of right now, Holden has essentially told the government that unless they can guarantee funding for the next decade then they are going to have to cease operations in Australia. Kind of sounds like blackmail to us, but then again, we’re the country that poured billions into our car companies to save them from themselves a few years ago, so what the hell do we know?
We’re not doomsday predictors here, but we think that it is fair to say that be 2022, automotive manufacturing in Australia will be a fond memory. That is shocking and sad as hell.
Bottoms up.
Read the sad truth here: HOLDEN PRESSURES AUSSIE GOV’T
“Government Motors” successfully shook down the American taxpayers, so why shouldn’t they run the same scam in the land of OZ?
GM was able to turn around and make a profit, their line up needed refreshing the American economy needed time to improve. I don’t know if the Australian market has the same solid foundation with costs of manufacturing going up. That was not the major problem for GM.
GM made their profit by changing the way they ran the numbers. Smoke and Mirrors. Now they are expending, but not in the US, but Mexico again. It is the government regulation, and unions in the developed or “civilized” countries that are killing us.
GM looks good on paper because of a practice called “channel stuffing”. They ship autos to the dealer and book it as a sale. Take a look at dealer inventory numbers for a sobering reality check. According to my personal logic, these cars are not really “sold” until some buys them with actual money, and takes them home.
unlike ford that took grants(free money) and tarp funds,
right speedy
Check your facts, Ford did not take gov’t loans.
You know all we have to do is look at ourselves for this. If we didn’t want cheap cheap cheap stuff we wouldn’t be in this pickle. The reason you pay so much for stuff made in America is because of labor costs and the fact China is taking every mineral they can get. It’s all about making it cheaper. Our cost of living, value of dollar and cost of health care is killing the American Dream. You know worse is the fact that we have the like the fourth largest military in the world ( I think that is right) lead by China and N. Korea……What does this tell you? Toyota may make a car or two in America but Toyota is kinda expensive if you ask me, new and used. I don’t feel that they are as good as quality as they once were either. I hate the fact they ever got into NASCAR. Was a real eye opener. Companies like KIA, which by the way is half owned by Hyundai, Mitsubishi and Suzuki do rather well here is that they really don’t compete with Ford, Dodge or Chevy. These offshore companies offer a product that the big three really don’t offer. Small cars, Sedans ( I know Ford and Chevy have their makes but they are almost luxury) and other crossover SUVS and such. There’s nothing cheap about buying a car anymore. But when you can save a bunch of money and get more for your money you better bet that’s were you’ll head. I think the American automotive world is slowly changing to look like the consumer driven shelves of Walmart. It will take a drastic change to see any kinda of comeback from the big three. Though the good ole days are gone.
As an Australian I couldn’t agree more. With a population that is becoming far more centralized and with the cost of air travel decreasing the “family road trip” isn’t a thing anymore, and the family sedan becoming far less relevant. You either need a small car where you are spoiled for choice from pacific rim manufacturers or a large car where the diesel 4×4 market is putting forth such a strong case for itself its impossible to ignore.
Combine that with an expectation of a skilled workforce expecting a wage level consistent with their skills, a market that wants more value for their dollar and the often daft decision makers at the car companies. Its no wonder this will happen.
The biggest problem with Australian domestic manufacturing is that they aren’t giving us what we want, they are making a product and telling us its what we want and in the age of information, we have learned overseas manufacturers are giving us just that.
Toyota for years in Australia has been producing “cardigan cars” – A car for old age pensioners. Its safe, reliable and as boring as mud. Then they produce the 86 and there is a waiting list! They release the Rukus (US market Scion Xb) as an automatic only, in bland colors and try to give it youth appeal with 16 inch rims as standard. The Aurion (running the 3.5 v6, one of my favorite motors at the moment and a future gem of the aftermarket tuning industry) is available in automatic and front wheel drive only. I own a Corolla Sport as my daily and its powered by the same dreary 1.8 as the entire lineup. There isn’t a hot hatch variety!
In short, if they stopped making family sedans and started making cars people NEED to have, not what they have been manufacturing and then telling them they need for the last 50 years. Maybe they wouldn’t be in such dire trouble.
guess they’ll be head to oh say Bangladesh or someplace similar
I never thought that Mad Max’s words would become reality about having “The last of the V8 Interceptors” in Australia..
Yup we have been raped and pillaged by Ford and GM, I just wish they’d used lube!
On the plus side we may get some US imports with RHD.
The Chevy SS sells for $10,000 less in the US than we pay for it hear, and we have to make it LHD and ship it to you.
such is life
It’s inevietable , I live close enough to Holdens and some of their smaller satellite companies to be able to hear the death rattles from here.The govt. has been propping up the car industry in Australia now for years , and it doesn’t matter what marque you follow ,they are all headed in the same direction. I read somewhere here that they need to give the general public something they really want and need , not what you get and this is right! It’s a fact that we aren’t a large populated country and I think we have well and truly hit saturation point and if this industry is to survive here then the govt. has to start bringing in the 10 year rule and get some of the older cars off the road , allowing for the replacement with new or newer cars.