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The Australian new car manufacturing industry is on its knees. If we were discussing a horse race, the likelihood of the industry surviving the next decade – in particular the survival of two of the three players – would be, to put it mildly, a long shot. If the Australian new car manufacturing industry were a patient in a hospital, sooner or later a rational discussion about maintaining ongoing life support, and having the priest on speed-dial, would need to be had.

Let’s have that discussion now.

Above: Autopolis managing partner John Wormald

Just over a year ago, John Wormald, the principal of respected international automotive think tank and government advisor, Autopolis, declared that Ford Australia would be “the next Mitsubishi”, a reference to Mitsubishi Motors Australia Limited’s withdrawal from local manufacturing a few years earlier. Mr Wormald said this would occur because Ford Australia, among the three local manufacturers, was the most isolated from its parent company’s operations.

Since Mr Wormald’s assessment, things have gotten a lot worse at Ford Australia. Fast forward to the end of 2010, and annual Falcon sales slumped to their lowest level in more than a decade. Just 29,516 Falcons were sold that year, a reduction of a staggering 60 per cent since 2003 when 73,220 Falcons rolled off showroom floors. This year, in January, Falcon sales experienced their worst month in at least 15 years. In May, a fairly typical month for car sales in Australia, Falcon sales were 1331 units – a 59 per cent drop, compared with May 2010. This is a massive drop on the back of a sustained massive drop in sales – the double-whammy of exactly how you don’t want your sales chart to look if you’re in business.  Hundreds of unsold Falcons crowded the grass surrounding the Broadmeadows factory, and working hours at the plant were cut back.

When you’re a factory, production has to equal sales. Otherwise: massive problem. Death by oversupply.

Those 1300 May Falcons is an annualised total of just 16,000 units. It hardly seems worth the effort of putting the lights on three days a week. The production capacity of the Broadmeadows factory (which also makes Falcon utes and newly facelifted Territorys) is something like 120,000 units annually. Production is currently being scaled back to “maintain production in line with market demand” from 260 vehicles per day to 209 – a 20 per cent reduction on the previous (reduced) status quo.

Above: Ford engine assembly plant, Geelong

In 2008, 800 Ford manufacturing operations workers lost their jobs at the Geelong casting plant and the Broadmeadows assembly plant. The Ford engine operation in Geelong was saved late in play by the government’s emergency injection of $21 million in taxpayer funds. Last April, it was announced a further 240 Ford manufacturing jobs would go in July – dropping Ford’s manufacturing workforce to just 1560 people. This announcement came just two weeks before the re-launch of the Territory, off the back of $42 million in Green Car Investment Fund (taxpayer funded) payments.

It’s no longer possible to buy a Falcon wagon, although to some extent the Territory fills this hole. Nor is it possible to buy a V8 (except for the brilliant supercharged one from FPV). The inline six is due for review this year, and the jury is out on that – especially in light of the recent proclamation by minister Anthony Albanese that Australia will comply with Euro 5 emissions regulations by 2013. R&D budget will need to underpin any attempt to tune the I6 for Euro 5 compliance, and doubtless some taxpayer co-funding will be requested…

Above: New Territory – the de facto Falcon wagon

Light at the end of the tunnel? There is a glimmer – the LPI Falcon, which features the hi-tech liquid LPG injection system, and the turbo four Ecoboost are due. LPI is imminent, and Ecoboost is about six months away. Do these developments comprise a sufficiently large rudder to about-face the shift, in your opinion? Have your say in the comments section below.

A new Falcon is due in 2015, and (apparently) the call will be made on this internally very soon. A strong series of signals from Detroit suggest the days of the ‘Aussie’ Falcon – that is, a model engineered from the ground up for our market, which has been a mainstay on Australian roads since 1960 – are over.

Ford design boss J Mays, who let the cat out of the bag on Falcon, early

Ford has enacted its ‘One Ford’ policy, mandating a single platform in each size for global markets – no more bespoke models like the Falcon, basically. At the last Detroit Auto Show, Ford’s global vice-president of deisgn, J Mays, told Australian reporters “I wouldn’t be holding my breath for rear-wheel drive”. (Although this was hurriedly hosed down by a PR minder with the caveat that a decision on this was “yet to be made”. PRs hate it when senior executives take the truth off its leash like that.)

Above: Your next Falcon will probably be a badge-engineered Taurus – but where will it be built?

The smart money is that the next Falcon will be a right-hook adaptation of the Ford Taurus – a vehicle available only in front-wheel drive and AWD configurations. The $64,000 question is: where will it be made – at a struggling operation just north of Melbourne, or elsewhere in the world – perhaps Thailand, where there is a free trade agreement with Australia, and a booming automotive manufacturing sector? It’s only a short boat ride away.

Australians don’t typically like big FWD cars. Mitsubishi’s locally made Magna was always a much better car than many gave it credit for. So was the 380 – people just didn’t want either, inconveniently. In 2000, 26,271 Magnas and Veradas were sold here. By 2007 – the last full year on sale for the 380 – less than 11,000 were sold. Mitsubishi divested itself of local manufacturing and hasn’t looked healthier, financially.

Above: A good, large, front-drive car … that no Aussies wanted, the ill-fated Mitsubishi 380

Do you think that Mr Wormald was right when he looked into his crystal ball back in early 2010 and predicted a Mitsubishi-like conclusion to Ford’s local manufacturing operations? Tell us what you think by commenting below.

Over at Holden, a five-year run of incurring financial losses in the process of being ‘Australia’s Own’ officially came to an end last year. In those five years, Holden lost a staggering total of $579 million engaged in, among other things, making Australia’s most popular car. That’s a half-billion-dollar-plus black hole, wallpapered with taxpayer funds.

Above: Historical shot of Holden’s earlier assembly operations

Last year Holden’s finances turned around, and GM’s antipodean outpost made a profit of $112 million ($138 million before tax). Shortly afterwards, in happier times, Julia Gillard strapped herself into the usual hi-viz hair and a yellow fluoro vest, for extra safety, and emitted CO2 all the way to Elizabeth in South Oz to attend the made-for-TV photo-op opening of the Holden Cruze production line.

Above: Ms Gillard, looking as statesperson-like as ever, at the opening of the Cruze production line in Adelaide

Things appear to be looking up for Holden, which is nice.

Post-GFC, after the rubber-stamping ‘Chapter 11’ bankruptcy of its parent in the USA, Holden describes itself as “leaner” and “more flexible”. It runs a tidy business exporting both engines and engineering talent globally. (In this respect, Ford is also a powerful exporter of Australian engineering talent to the global Ford empire. Both undertakings demonstrate how highly skilled and sought after Australian automotive engineering talent is – a major side benefit of actually making cars here.) Holden is certainly leaner than it was previously, with its workforce cut from over 6000 to just over 4500 in 2009. (Both Holden and Ford managed their job losses in a highly ethical way.)

Above: Holden boss, Mike Devereux

Holden Chairman Mike Devereux is on the record declaring: “every market has to be self sustaining” and has told reporters he’s aiming for 100,000 units to achieve the right economies of scale to achieve this. He will need to stop the long-term bloodshed in Commodore sales and sell 30,000 locally built Cruzes to do this. Several thousand Caprice-based US police car exports wouldn’t hurt, either.

Commodore sales have crashed from a high of 88,478 in 2002 to a low of 44,387 in 2009 – with drops every year in between. Holden’s market share has been slashed in under a decade. Additionally, Pontiac G8 export sales (essentially left-hook Commodores with different badges) evaporated overnight after the notorious corporate jet/Congress-begging fiasco that tipped the final domino over, and the once-mighty GM fell over. Big Fritz Henderson declared Pontiac suddenly superfluous to requirements, despite the G8/Commodore itself being a great car that out-performed its sales estimates in the US.

Above: Pontiac GTO

Commodore sales have dropped 48 per cent since 2002 despite various developments designed to up its contemporary ante – developments like AFM, the Sportwagon and Flex-fuel capability for the 3.0- and 6.0-litre engines. Commodore has a proud record of being Australia’s most popular car, and has been a hallowed nameplate in Australia since its introduction with the VB in 1978 (back when the Commodore was the same size as the Cruze, and the V8 made the same power as today’s Cruze four). Last year, 45,956 Commodores were sold here.

At least the Cruze is a locally built Commodore mini-me that you can downsize into if you decide big cars are suddenly on the nose – exactly decision many corporate and fleet customers are now making. (As many as two-thirds of Commodore and Falcon sales were historically corporate and fleet customers, who enjoyed significant discounts compared with mums and dads.)

Above: Holden’s Elizabeth factory

Digging deep into Holden’s annual report involves knocking some of the gloss off that promising 2010 profit announcement. In that same year, Holden received $99.6 million in taxpayer funds from the Automotive Competitiveness and Investment Scheme (ACIS). These funds are in addition to another $149 million in taxpayer funds over three years granted under the now defunct Green Car Innovation Fund. South Australian taxpayers also lent Holden a further $3 million.

Holden was also significantly assisted in its bottom line in 2010 by currency movements – foreign exchange. In fact, Taxpayer-funded government grants plus foreign exchange plus miscellaneous revenue totalled almost $160 million in the black part of Holden’s balance sheet last year. Foreign exchange and taxpayer funding were the key to the company’s 2010 profitability.

If you were to remove the Government grants and the foreign exchange windfall, that $138 million pre-tax profit turns into a $20+ million pre-tax black hole.

Above: Holden Robots at work in Elizabeth

Holden sold 132,923 vehicles in Australia in 2010. In doing so it secured almost 13 per cent of all new vehicles sold in the country. When you consider the logistics and the people: all of the ships, all of the trucks and the thousands of staff members, the thousands of people who go to work in hundreds of dealerships nationwide, there has to be something monumentally wrong with this picture. How can all this endeavour by all those people turn into a $20+ million loss in the absence of taxpayer funding and currency movements?

Should the Government continue to prop up (in the long-term) multi-national car company loss-making? Do taxpayers like you really have a vested interest in keeping multinational fires burning in car companies Down Under? Isn’t government funding, at best, a short-term industry bail-out strategy? Do the funds paid deliver more net economic benefit to Australian society than the amount they cost taxpayers to tip in? Should taxpayer funds be used in this way? A better question might be: Where could this money of ours be used better? Here, there’s no shortage of choice – roads, health, immigration policy, border security, infrastructure…

These are all fundamentally important questions for Australian society, so please give us your views by commenting below.

Toyota is the one local car make that appears to have its eye most on the ball, or at least be strategically placed near the local manufacturing ‘sweet spot’. Despite the stigma of recalls globally in the multi-millions, and a speed bump in local production as part of the fallout from Fukashima, Toyota’s monumental local momentum is something you could set your watch by. It’s like the sun coming up in the east.

But things are far from rosy at Toyota Australia, and they haven’t been for the past two years. Here’s an update on the Toyota Oz situation.

Above: Locally built Hybrid Camry

People love their Camrys (to a car enthusiast, only God knows why – but they do). In the past decade, annual Camry sales have been as high as 26,336 (2007) and as low as 16,711 (2001). Last year, more than 25,000 Camrys were sold. There is no downward trend in play.

That Camry sales result in 2007 corresponded with the debut of the all-new Camry. The then-new Aurion (V6 Camry by any other name) also leapt out of the blocks in ’07, securing a tidy 22,036 sales. If they’d called it a Camry, total Camry sales would have instantly eclipsed Falcon sales and been comfortably within 10,000 units of Australia’s most popular car in 2007.

People are running away from six-cylinder cars, however, and Aurion sales have not been immune to this exodus. Aurion sales in Australia have almost halved since the stellar 2007 result. Last year only 11,764 Aurions were sold (22,036 in 2007).

Above: On the Toyota assembly line in Altona, Vic

Frankly, though, Camry and Aurion local sales are maybe not a sideshow for Toyota – but they’re certainly not the main game. Retailing Camrys and Aurions in Australia is a tidy ancilliary business that helps support a major export operation.

Toyota’s Altona plant produced about 120,000 cars in 2010, and more than 80,000 of those were exported. Two years ago, Commodore exports evaporated, GM was insolvent and Ford US was pedalling hard to emerge un-bankrupted by its own high-level mis-management and the effects of the GFC. (Ford was the only US big three car maker to manage to remain solvent by getting rid of Volvo … and other radical surgery.) In the midst of this automotive maelstrom, Toyota Australia was in the eye of the hurricane and managed a record 101,668 exports worth a total of $1.3 billion. What crisis?

Above: Saudi’s most popular passenger car

Toyota’s export program kicked off in 1986.A decade later, in 1996, exports to the Middle East began. (Camry is the top-selling car in the Middle East.) By 2000, Toyota had exported its 100,000th car to Saudi Arabia. By 2010 that number had grown to 500,000 Saudi exports. Ballpark figure for Toyota’s export program? Call it 60 per cent of Altona’s production.

Above: Welcome to Saudi Arabia, $1.3 billion worth or expatriate Aussie Camrys

In isolation, Toyota seems rock solid in local manufacturing. However, Ford’s and Holden’s problems are also Toyota’s problems. Each of the three local manufacturers is dependent on the supply of thousands of component parts, some of which come from local suppliers. And the local suppliers are under tremendous pressure. When one goes under as a result of, say, reduced orders from Ford being the straw that breaks the camel’s back – it’s also a problem for Toyota.

Camry and Aurion are global products, as opposed to Falcon and Commodore, which are bespoke to Oz, and as such demand much higher R&D input before someone presses the big, green button on the production line. Even so, Toyota Australia is not immune to accepting taxpayer-funded government  contributions. The Hybrid Camry project (assembling it here, not designing it) took place only after  $70 million in taxpayer funds was forthcoming – $35 million each from the Federal Government and Victorian Government.

Above: Would the Hybrid Camry have been built here in the absence of a $70 million taxpayer tin-kick?

At the time it was alleged that Toyota would have made the Hybrid Camry here, whether or not the taxpayer funds were forthcoming, but Toyota (after accepting the funds) denied it.

Are you happy to see taxpayer funds delivered to the world’s largest car company to make an ageing hybrid car that has hardly sold its socks off – even to the governments that approved the funding?

Making cars in Australia costs almost everyone who buys an imported vehicle just that little bit extra. (Every car maker in Australia is also an importer, with many more import sales on the books than locally-made sales.) The import tariff of five per cent applies to the landed price of vehicles imported from most countries (but not Thailand, with which we have a free-trade agreement). So, if you bought a Mazda3, or a Honda Accord Euro, or a Volkswagen, Audi, BMW or Benz, or a Nissan, a Mitsubishi, a Peugeot, Citroen, Hyundai, Kia, Ssangyong or even a Great Wall or Chery lately, you paid five per cent. Actually, the importing car company paid it. They passed it on to their dealer network, who then passed it onto you.

If the average landed price of a vehicle is $20,000, and if there are 750,000 of them subject to the import tariff, that’s a $750 million industry-protecting treasury windfall. Are you happy with paying that, or would you simply rather your imported car just be that little bit cheaper? You are effectively subsidising the local car industry every time you buy an imported car (provided it’s not one made in Thailand). Let us know what you think about that below.

When local car makers feel pain, so do their suppliers, many of whom in Australia are haemorrhaging.

Take Drivetrain Systems International (DSI), which a couple of years ago was Australia’s last and only manufacturer of automatic transmissions. It supplied the four-speed auto on the base-model Falcons. It even developed a six-speed auto for the Falcon, but Ford Oz decided to run with the ZF instead. (No argument with that choice – the ZF is a great gearbox. The decision was hardly an example of bilateral industry support, however. Or even ‘buy Australian’.)

DSI sought another market for its six speed. It found Ssangyong, which promptly went into liquidation and left DSI holding rather a large bag. The debt was forgiven, a euphemism for ‘unpaid’, and the process sanctioned by the South Korean government. DSI consequently went out the back door. It’s now owned by Chinese automotive conglomerate, Geely, the same mob that bought Volvo from Ford.

Some viable and high-profile Australian automotive components suppliers have seen the writing on the wall. In the interests of self-preservation, those who are able to do so are making like rats on a ship for which Archimedes’ principle is no longer working out.

Earlier this year, Autoliv Australia, a subsidiary of a large Swedish-US OE manufacturer (seatbelts, airbags, etc.), which also operated a crash-testing facility near the Ford factory in Broadmeadows, moved its local manufacturing operation offshore, to Thailand. It also put the crash-testing centre on the market. Its manufacturing, engineering and admin employees hit the unemployment queue. In the mid-2000s, at its height, Autoliv employed more than 1000 staff.

Robert Bosch Australia has done exactly the same thing – almost 400 local jobs in Clayton, Victoria, have been axed as 75 per cent of the company’s local operations are relocated offshore to other Bosch facilities in Asia and Europe. The company manufactured state-of-the-art electronic control units, ABS systems, ESC systems, steering wheel angle sensors, etc. More than 90 per cent of its output was exported. Just 120 local employees will be retained in its manufacturing operations.

The Bosch OS exodus will be phased in during 2012 and 2013. Reason? The cost of doing business in Australia no longer added up. The company has been manufacturing in Australia since the 1950s. Bosch says it will continue to supply parts to Australian car makers – however, more of these in the future will be imported.

Bosch also has viable Australian business operations in the building, consumer goods and industrial sectors – and these will remain unaffected.

Each big, Aussie car that fails to sell puts reverse ‘economies of scale’ pressure on component suppliers. The price of each unit goes up as volumes contract – at a time when the car company customer can ill afford to pay extra.

Mike Devereux from Holden wants to produce 100,000 cars – like Toyota. It sounds like a sufficiently large number. Like, if you had 100,000 cars, where would you put them? But last year I was in Seoul for an interview with Steve Yang, Hyundai-Kia’s head honcho. To put the filter of global perspective on the desire to build 100,000 cars, Mr Yang said that, in his view, the minimum economically viable output for a car factory was 300,000 annual units. (So you can relax if you were worried about a Hyundai car factory going up any time soon, on that vacant lot over the road from your place.) The combined output of Australia’s automotive manufacturing sector is well below that – and spread across three plants in two states.

Above: Will we still be seeing photos like this in 2030?

What’s your take? A renaissance of the local Aussie car maker by 2020 – or a fire sale of cheap land at Broadmeadows and Elizabeth? Is it worth the government tipping your seed money into something that seems disinclined to sprout and then grow on its own? How can we turn the local car manufacturing operation around? Do we even need to? Tell us what you think by commenting below.

Australia is one of only 13 countries in the developed world with the skill and ability to engineer and build a car from the ground up. We also have the lowest tariff barriers. What will we lose if it all comes to a screeching halt over the next decade? Can the decline be stopped, or is it already too late?

We welcome your comments below. What’s your take on the future of automotive manufacturing in Australia?




  • Car Window

    The truth is that manufacturing in Australia will never survive and it’s not viable. Especially car manufacturing. Honestly all the governments are just pumping millions of dollars in something that cannot compete with car manufacturing in China, Mexico, Brazil, North America and South Korea. Its just a waste of money and the cars shown in this article proves it.

    • Dave

      The industry is teetering and the stupid tax on carbon dioxide will finish it off, if implemented. The Greens may yet have their wish of having us huddled in caves, chanting Kambaya to the tune of Solidarity Forever. Unfortunately, it’s not only the car industry trashed by a useless socialist government.

      • Informed

        Err… you do realise that both Labor and Coalition have committed to the exact same target of CO2 reduction by 2025. One by placing a price on carbon and then letting the market decide which is the more efficient way of reducing carbon (see recent comments from the Chief of NAB). The other (i.e. Coalition) through the investment of tax payer money directly to coal mines, energy companies to reduce carbon emissions. I wonder which of the two options sounds more socialist to me.

        The way a price on carbon or ETS is designed to work is to make other forms of energy competetive with cheap coal that emit less emissions. E.g. a price on carbon would lead to more gas turbine power station as gas produces less carbon and is much more energy efficient, which would in turn de-centralise the production of electricity (away from coal resource areas) making our electricity network more secure.

        Further advantages would be the encouragement of more investement in industries like gas or whatever the market decides. Remember the coal/electricity industry was formed from heavy government subsidies and therefore has a competetive advantage despite being less efficient and a higher polluter.

        The reality is that the world is moving, hesitently, towards cap and trade system on carbon emissions. We can get on board now or be burdened later on. If delayed too long opportunities in Australia will be lost, such as carbon sequestation, because companies will get no “credit for developing in Australia. Further we will be pay through indirect levies. The EU is already threatening to charge Qantas a surcharge because Qantas is based in a country without an ETS or price on carbon and therefore has an unfair competetive advantage.

        • RedBack

          An ETS is not what’s being proposed/implemented at present though is it?

          As you say, – an ETS would let the market decide. On the other hand, the carbon tax is just a social engineering exercise to redistribute wealth and is more likely to be used to prop-up votes within Labor constituencies, than achieve any real reduction in carbon emissions.

          Governments have an appalling record of inefficiency when it comes taking our taxes and investing them wisely.

          Our bureaucracy has shown demonstrable incompetence in administration of anything but the most basic programmes. (Anyone remember the BER, Home Insulation, Solar Rebate, Green Car Fund, etc, etc?)

          Taxes are like drugs for governments. They quickly become dependent on their new “hit” and rarely do they even try to free themselves of the addiction.

          …and we’re the gullible bunnies that pay for it.

          Incidentally, in the unlikely event that our carbon tax achieves its emission reduction objectives, the result will be a drop in global carbon emissions of less than half of 1 percent.

          All this counter-productive disruption and abuse/misuse of tax-payer funds for a freaking rounding-error!

      • Hayzel

        The only stupid on here is you DAVE for being ignorant and ill informed.

    • http://profile.yahoo.com/BDSQ5HLPAQIJ2FNB3ET4AGDPJI Matthew

       It could survive.. The problem is our government has this idea of giving every other country a fair go while they give us the finger.. On top of that, with our local manufacturer’s being foreign owned they are at risk of decision’s made overseas, We can survive but change’s need to be made, Increase the tariff’s, having the lowest tariff in the world has only caused more harm for us. On top of that make it harder for foreign companies to hold back and Australian product just because they only want an inferior American product on the market (eg: The Ford Taurus vs the Ford Falcon, With the Ford Falcon outperforming the Taurus on several issue’s.)

  • Fred

    Ford AU will be gone in the next few years.

    Toyota AU will pull the pin soon after.

    GM Holden….??

    Building cars in Australia has NO Future.

  • john

    Of course it will survive. It has access too a bottomless, endless supply of taxpayer money. Is it a case of throwing good money after bad? Hard too tell because all the people employed directly and indirectly by the car making industry may not be able too find jobs in this gillard induced coma the country is in, so centrelink payments will go through the roof. May be cheaper too keep throwing money at the car industry than pull the plug and let it die!

    • Sumpguard

      So it’s Gillard’s fault? Get a grip bonehead. The industry is in trouble for many reasons and the reduction in tariff protection which both sides of government spport is just a part of it.

      There’s the fact that there are now hundreds of models sold in Austrlia where as when the Commalcons were dominant there were fewer options and imports have become a lot cheaper. I remember a time when a Mazda 626 was considerably dearer than a base model commodore or falcon. Now they are similar.

      The camry is popular because it offers large car size and ride with an enviable reliabilty record and is still several grand cheaper than the Commadore/falcon. I agree it has as much soul as Lucifer but it seems plenty of people want a bland but reliable vehicle.

      When you throw in the fact that many of those “small” cars can be had for around 18 grand and actually have a half decent amount of room as well as decent economy compared to the local RWD’s it and in a market where economy is becoming critical then the writing is on the wall. Most people believe the days of cheap fuel are behind us and that too is doing damage to the sale of large RWD vehicles. Economy is the single biggest factor for people now which is why I cannot understand why both ford and holden benched plans for a diesel variant of their passenger cars.

      Top it off with a high Aussie dollar to destroy our export market and the reason the industry is in trouble becomes even more obvious. I desperately want to see it survive but I don’t think it will. If even one of the local three close their doors the loss to the component industry would be catastrophic in itself.

      Australia’s isolation is a big issue when it comes to trading with the world. One thing is certain is the fact that when the inevitable occurs and the industry closes in Australia we will see a gradual rise in the cost of imports.

      • john

        Read what I said. The car making industry decline is not Gillards fault. The fact that people laid off by the industry won’t be able too find jobs is Gillard and Rudds fault. They ran a perfectly stable economy into the ground as labour always does. Then the liberals have too come in and fix it. Luckily for me under Howard I made most of my money, because business for me has stunk the last 4 years!

        • john

          PS Unlike the car makers I don’t need government help too survive!

  • Fred

    Re:

    ” If the average landed price of a vehicle is $20,000, and if there are 750,000 of them subject to the import tariff, that’s a $750 million industry-protecting treasury windfall. ”

    And we also got 33% LCT on some of them as well.

  • MattW

    Manufacturing here won’t survive. Exporting as Toyota does is the only chance of making operations viable as our market (plus NZ) is too small to be viable, and the strong Aussie dollar is putting the squeeze on that.

    Ford will be the first to stop, then the flow on effect on component suppliers and strong Aussie dollar will kill it for Holden as well (sooner if government handouts stop). GM have been talking about canning the Zeta platform the Commodore is built on for a while already.

    Ford AU & Holden will remain as R&D centres though (eg Ford doing Ranger & Figo, Holden the Cruze hatch & Malibu).

    Sad, as I love my FG XR6T, but once you look at it from the numbers that the accountants at GM & Ford HQ will be looking at, its inevitable. And if the Aussie dollar stays strong, who knows how long Toyota will hang around?

  • Ford Fairlane

    I tell you what will happen if we can not produce cars.
    All midsize car prices will go up,small car prices will go up.
    More chinese manufactures will come and there price will go up.
    Imported cars that are standard in other countrys will become prestige(that already happend)and i would not be surprized if performance cars get a premium price tag(further down the road).
    Its Lose,Lose and Lose for Australia.

    • Phil

      What are you basing that on?

      When Mitsubishi left, there were no changes in car prices. If anything, cars are cheaper than ever.

      The only way Chinese manufactuers will be able to sell cars here is with cheap prices – so why would the prices go up?

      None of what you said makes sense.

      • Ford Fairlane

        Because we make cars here we know how much it costs to make cars here and how that compares with overseas.
        When we lose that we have no base to compare with anything overseas and the prices WILL go up.
        There is also alot of people who will only buy Falcon and Commodores,when there not there to buy it will open up a whole new set of buyers(who usally spend more money to buy a large car)to imported cars,hence the price will go up.
        When mitsubishi left there was/is still three manufactuers here making cars.
        Why wouldn’t the chinese put prices up,there here to make money aswell.

        • Phil

          That still makes no sense. The dealers will know how much it costs to make and will price it accordingly whether its imported or not.

          Also the cost of making a car here is not the same as imported cars anways. Our cars are made in a low volume (40,000 units a year) and highly labour intensive factory with workers all on high wages. Most imported cars come from high volume (up to 1,000,000 units a year) and fully robotic factory, overseen by fewer workers who are on lower wages.

          NZ used to make cars a few decades ago. When they stopped there was no change in prices – if anything they’ve got cheaper.

          The reasoning that the Chinese will increase their Australian prices because we aren’t making our own still makes no sense. None of the cars they are selling even compete with our Australian made cars.

          • Karl

            If we close lose local automotive production, those cars will have to be imported.

            More imported cars = worse terms of trade = lower $AUS = imported cars cost more.

            So no, cars won’t be cheaper.

  • nickdl

    I’m getting so sick of this. The reason Mitsubishi was forced to pull out of Tonsley Park in 08 was largely due to a massive drop in public confidence in the brand. The ABC and plenty of other media outlets put out all of the same doom and gloom stories as they are now with Ford. The 380 and later Magnas were great cars and the level of engineering for the tiny budgets they were developed on was superb. If Mitsubishi had had just a little more money (and maybe some better looks) to spend we would have seen one of the best Aussie 6′s ever. However, on the back of media speculation and doomsaying people would not buy a Mitsubishi. My parents didn’t even want to know about an imported one.

    It would be a massive shame to see Ford pushed out for the same reason as Mitsubishi: the media. With factually incorrect reports from the morons at Today Tonight, which its equally moronic viewers will question, and the constant morbid articles on Drive and Carsguide, Ford are fighting an uphill battle to keep reasonable level of public confidence in their local operations. I was very dissapointed, John, to see you make that outrageous statemtent on the report. Generally Car Advice has been pretty good on leaving out negativity, and I’d like to see that continue.

    We’ve just come off the back of the biggest financial adversity since the Great Depression, so it could be expected that many businesses around the country need government support to survive. Holden has a good outlook, with its popular Commodore and Cruze (which are great cars) and exports on the cards over the next few years. The profits should only continue to increase from now. Ford, too has plenty to look forward to, with the new Territory out and an updated Falcon on the way. As for Toyota, things are looking great.

    The $70M Toyota recieved from the Government was simply a very smart business decision to take advantage of two of the most economically mismanaged governments in recent history. That money was just icing on the cake for them. Holden and Ford have suffered as a result of mismanagement in America. The US Government support GM and Chrysler recieved was massive compared to the small amount here.

    While the Falcon probably can’t survive without an export market, there’s no need for the media, who should be reporting the facts rather than speculating the future, to give its last rites. Ultimately, I’d rather see my tax go into keeping people in their jobs than propping up those who don’t work. “On its knees” is a bold statement, and not a very fair one IMO.

    • Phil

      You have it the wrong way around. Sales of 380/Falcon/Magna were dropping (perhaps due to public confidence) long before the media latched on to it.

      The Australian car manufctuers were taking in Government subsidys before the global financial crisis took effect.

      The profits cannot “only continue to increase from now” since there haven’t been any unsubsidised profits for years.

      • nickdl

        Falcon sales have been slowing but the overall segment has been slowing as well. Up until the end of last year, when wagon and LPG production stopped and the last XR8s left the showrooms, things were looking pretty healthy for the Falcon. Then it had its worst sales in a long time in January resulting from a combination of natural disasters around the country as well as none of the above models being produced. At the moment the Falcon is in a large hole with sales without LPG which also affects Ute sales. With the LPi on the way we should see a resurgence, and the updated model with EcoBoost 4 is less than 6 months away.

        Media reports of Mitsubishi’s impending closure existed well before the release of the 380, by the way. Perhaps I am being too positive, but I think it’s unfair to make these outlandish statements, especially when you see government subsidies in many counrties around the world for their own manufacturing.

        • Phil

          For nickdl:

          2003 – 73,220
          2004 – 65,384
          2005 – 53,080
          2006 – 42,390
          2007 – 33,941
          2008 – 31,936
          2009 – 31,023
          2010 – 29,516
          (2011 figure based on monthly sales so far: 17,000)

          30,000 sales IS NOT “pretty healthy” esspecially when you consider that all of them were only achieved with around 30% discounted from RRP.

          Also, I think Ford are still selling LPG utes. A banner add keeps popping on the side advertising them (at a huge discount as per usual for Falcon).

      • Ford Fairlane

        Magna were dropping (perhaps due to public confidence) long before the media latched on to it.

        Mitsubishi did not see it that way and where very unhappay with the way the a ABC supplyed the nails to the coffin lid.

        • Naive one

          Public confidence comes from the Media; the ABC had predicted the death of Mitsubishi from 1996, (great foresight)

          Are we as Australians so naive to believe that we are the only country in the world who tip tax payer dollars into the hands of large multinational automotive manufactures. Do you think that your imported VW hasn’t received a hand out from the German Taxpayer? An EU regional growth funding initiative, or a green carbon manufacturing reduction scheme?

          Do you think that the UK is not pouring millions of pounds into its motor manufacturing plants and suppliers? (Most of which are owned by large foreign multinationals from Japan, India, US and Germany)
          The UK’s 1.4 Billion pound regional growth fund has had its first round of spending with 450 million pounds going primarily to manufacturing, with a large % going to these Car companies and or its suppliers.

          Do these same large Multinationals set up in Thailand just because wagers are lower than other countries, or is it because they receive assistance and inducements to come and manufacture and bring with them their suppliers? Might just be a great place to build cars near the seaside?

          I suppose I can just buy a farm and live off the sheep’s back, and when my children grow up and want to become Engineers, I can send them off overseas. Or I regale them about a time when Australians could manufacture things and not just buy them in.

          But I forget the exchange rate will always be favourable, like in 1981 when it was fixed and it would never drop to 50c US again……..
          But then again I’m just being naive.

          • Jack

            So true.

  • Troll No. 47

    This looks like a re-hash of that story that was on Today Tonight the other day and was criticised by Media Watch for containing wrong and misleading information and figures. Here’s the media watch piece for those who are interested:

    http://www.abc.net.au/mediawatch/transcripts/s3248775.htm

    I should have guessed that it would turn up here sooner or later, given the author of this story was prominent in the TT segment. Funny how Today Tonight’s piece doesn’t get a mention in this article?? Why’s that I wonder…

    • Falcodore

      Yep, after putting his name to that grossly inacurate report on TT, John Cadogen has lost ALL credibility.

      I dont visit this site much anymore because they put the whole article in the RSS feed which only serves to slow down my computer and chew up data. STUPID! Having this goose on their payroll might just be the ‘nail in the coffin’ as far as i’m concerned.

      • RedBack

        In fairness to John, his (heavily edited) interview was included as part of that story, but he had no knowledge of the “tone” TT were going take, did not see the script or the final piece before it went to air and was as appalled as the rest of us at its inaccuracies.

  • Andrew

    I feel sorry for Ford and Holden because I believe that the falcon and commodore are great cars, but why on earth has it taken them so long to consider a 4 cylinder engine? And why no diesel alternative?

    Considering the market’s trend towards downsizing I would have thought it would make sense for these large cars to shrink in size and use the weight savings to augment performance and economy while also drawing in customers who don’t want something ungainly and difficult to park.

  • Martin

    MattW is on the money. It’s just not a viable industry for Aus anymore. Maybe QLD and NSW can entice those put out of a car manufacturing job into the mining industry which coincidently actually makes this country money. The design centres should be kept running since they are viable. The price of medium and small cars would not rise. Why would they? They are priced at the point which customers are willing to pay. If they rose too much, people wouldn’t pay it. The price of some medium sized cars already straddles the large car segment. How could they go higher?

  • Mick

    People always complain about ‘taxpayer’ money being poured into the local manufacturers. Fact is, that money isn’t really taxpayers money. That money came from the taxes that were applied in every step in the manufacturing and selling of that car. There is so max tax applied to the actual manufacturer of the car, that goes into the workers pay, the buying of the parts to make the car, the manufacturing of those parts including business tax and tax involved in trasportation, the tax involved with the source of the thing to go into that doorhandle, and the associated taxes of everything in between…

    Overall, the Australian car manufacturing industry gets very little even with these prop ups when you consider all the tax that is gained through all the steps from raw materials to final product.

    Australia needs to look out for itself when it comes to manufacturing, just like any other country. What they should be doing is greatly reducing the tax impact across the whole range from source materials to the final product, which would mean a much cheaper car when it is sold.

    So the government may argue ‘thats not feasible, we need that tax money etc’, well, that money is only going to be there as long as there is an industry to create it, the government is going to lose out on a whole lot more money if the vehicle manufacturing sector goes under.

    The reduced tax from source materials to final product also means better possibilities for export. Cars like the Ford Falcon and Territory would sell well in America if they weren’t so heavily taxed.

    • Tim Johnston

      Mick, by definition, the GST ensures the consumer foots the final tax bill.

  • Mick

    Also if the government argues we can’t do that because of what other countries may say, they shouldn’t think for a second that the countries we import from aren’t doing the exact same thing!

  • Phil

    Whilst reading this, a add for Falcon Ute kept coming up on the side:

    Falcon Ute with E-Gas, $27,990 drive away with automatic, extended warranty and free alloy tray.

    Normal price is $33,295 + on road costs of ~$2500 + alloy tray ~ $1500 = $37,295 which adds up to a discount of nearly $10,000 not including the price of the extended warranty.

    25% discount before you even enter the dealer to start haggling….and they have even bigger discounts on XR6 sedans.

  • Phil

    Yep as soon as I posted that last comment the add changed:

    “Falcon XR6 SEDAN with 6 speed auto, $34,990 drive away PLUS $2000 cashback.

    Normal Price: $43,990 + on road costs ~ $2500 = $46,490 so discount is $11,500 or $13,500 if cashback is caculated after purchase price!

  • QAZ

    Not building any car in Australia would be a big mistake.

    A country without capabilities to manufacture = No power in negotiation in international trade.

    Australia can not rely on its mining industry forever!

    • Phil

      How exactly does our car manufacturing give us negotiation power in International trade?

    • paulb

      QAZ your right,that mining example just came up the other day.Sino Steel just pulled out of the Midwest of WA,off TO Africa its cheaper.
      We need to be diverse in our economy.

  • Tony

    It is unlikely that the foreign owners of Toyota (in Japan); Ford and Holden (in America) will continue to keep running their factories here for much longer, once the carbon tax gets enacted. They are already struggling to sell their cars. The carbon tax will prompt them to close. The Ford Falcon is selling at such low numbers that it is absurd to keep production. Toyota recently announced a 4th car plant will be built in Thailand. Toyota can export cars here from Thailand cheaper than it can build them here, especially with wages continuing to rise in Australia, compared against Thailand.

  • Hub cap

    Very interesting article. I never thought the industry was having such potential problems.
    It sounds like cars that sell globally are more likely to succeed. Locally built and designed cars seem to be on the way out, especially six cylinder models.
    I think that even the Cruze was designed in Korea prior to being built here. It seems to be a good car with the new engines which are designed in Belgium.

  • Hub cap

    Sounds like local production is on the way out. Not at all good news.

  • M

    Why don’t the manufacturer’s try and sell locally made cars overseas. Like we are seeing here, with some models like Skoda, and new Chinese models trying to sell here in Australia.

    • Robert Ryan

      That is the problem with Ford Australia unlike Holden Ford US has not given te green light for any sort of export program.

    • Phil

      Europeans and Asians do not buy large sedans. Americans already have several large sedans in their market – and theirs come from more cost effective factorys meaning Australian cars would not be competative.

      If you read the article, you’d have learnt that Toyota and Holden have a export program to the gas guzzling Middle east. Ford already has a different large car in that market, so Falcon is not wanted or needed.

      • bd

        Actually, the Chinese and Korean markets prefer mid-to-large size sedans (tho, that is slowly changing as gas prices continue to stay high).

        • Ford Fairlane

          Agreed The Chinese love big cars because they love the western way(American)of life.

    • MattW

      The problem with exporting from Australia is the strong Aussie dollar. Remember when Holden were saying they were going to manufacture the Cruze here and export it? They have quietly let that idea go…

  • Shak

    Up till this point in time, i have whole heartedly supported local manufacturing, and i still do to some extent, but honestly they have been receiving out tax money for years, and while at times they have used it effectively, they just arent keeping up with the rest of the world. As much as i would love to see them stay on, they have to become more effective, or produce something genuinely extraordinary to stay afloat downunder. The only way for this to happen, is to force them to become more efficient by taking away the money. If they can genuinely show that they are going to do a project that is truly beneficial then why not give them money; governments all around the world do it. But if they ask for money just to stay in business due to their own foolishness, then too bad. That is capitalism, deal with it.

    • Luv Local

      Shak, the key point in this entire article is this,

      “Australia is one of only 13 countries in the developed world with the skill and ability to engineer and build a car from the ground up. We also have the lowest tariff barriers”

      • johnniesazzler

        @ Luv Local, that a line Senator Carr has been spouting for years – it’s not true.

        There are at least 20 countries that have the capability to design, engineer, and manufacture cars, and the number’s growing. How is it relevant anyway? Surely it would only matter if the number was less than 3 or so, implying an oligopoly in car-making technology.

  • chook

    Given that near all manufacturing here is doomed long term , (in many industries), they may as well close down everything now !!….then when everone (including the buyers and supporters of imports) are screaming about the hardship that has been caused by their job being undercut by someone overseas earning 5 dollars per hour…..then we will understand more about giving back to our country instead of making lame excuses about quality of our own products . We get paid australian pay rates …..so damn well buy things which keep our own people in work with our pay rates . Buying some imports is fine , but when its out of control its the ultimate expression of selfishness on the part of the buyer . Maybe a few less beers each week or less time losing the cash at the poker machines and some people will suddenly find that they can meet their costs , without having to resort to imports when they buy something .!!

    • Luv Local

      Well said Chook, thumbs up!

    • Ford Fairlane

      Heer,heer

  • Convict

    As Arthur Calwell said, “populate or perish”.

    • Phil

      The two biggest car manufacturing countrys in the world, Germany and Japan, have had a declining population for the last two decades.

      • Convict

        You fail to acknowledge the size comparison of the country between Germany/Japan and Australia. Or of the comparative advantage in industrial prowess.

        Australia’s largest export is resources by far, not any form of manufacturing. IF you wanted to compete on that level, you would need to buff up the population so that there is greater coverage in Australia’s industrial technology.

        As it stands, the fields Australia chooses to pursue are of a high standard (world class), but there are massive gaps.

        • Phil

          Neither of those two countrys “buffed” up their population to become industrial powerhouses.
          Nor had Liechtenstein, Luxembourg or Switzerland been boosting their meagre populations before becoming the top GDP per capita countrys in the world.

          • Convict

            Again, you fail to see the scale comparison between the examples you’re giving and Australia.

            For every square kilometre, the Australian Government has to spend considerably more on infrastructure than any of the countries you have listed, yet at the same time, they have less per capita coming in.

            Your argument is very naive and nullified by the fact that Australia’s advantage does not lie in any of the industries which powered Germany, Japan or Switzerland, or any of the Euro nations for that matter.

            We are a nation of farmers and resource exporters, yet we want to compete in motor vehicle manufacturing without a sizeable domestic market, nor the population to support a cheap labour source. How is the eventuality of this any surprise?

    • MattW

      There’s too many people in the world already, we need less mouths to feed, not more

      • Convict

        Good on you for being so righteous with such a high moral standard. If only everyone would abstain from reproducing like yourself.

  • Ian Dalton

    Sadly all in the article are true. However, the real loss in the loss of our local car manufacuring industry will be the leading skills that will cease to be generated in design, product and manufacturing engineering, finance, materials management and logistics, people management, etc .. all which the auto industry has long been a leader and innovator, and which has cascaded into many other parts of our economy .. the leats of which is the component supplier industry.

    Just note that all the leading economies in the world have an automotive industry!

    • Robert Ryan

      Losing that industry is the start of the slide to becoming a third world country. I doubt too many Australians think that is a great idea.

  • shiner

    Both the Falcon and the Commodore are excellent modern vehicles. A common misconception exists that they are old, inefficient dinosaurs. To be a strong country, you need a manufacturing industry, otherwise you are just a consumer country.

    Buy australian cars or we will all end up in retail and services industries.

    • Phil

      People don’t want large cars and if they do, they expect more practicality than just a basic large sedan with barely anymore boot space than a little Honda City.

      Very few people want a huge 3.0 or 4.0 petrol engine with 200KW and even fewer people are willing to fuel 9.9L\100km.

      So no, I will not buy Australian cars.

      • bangel

        ABSOLUTELY correct phil , they have been blind to the fact the world has moved on from booted large cars , their sales have been declining for 10 to 15 years at yet they did nothing , thats right they were protected with tariffs and govt subsidies , tariffs are all but over .

        • Hung Low

          Bungle, you are just an anti-australian troll.
          We do not need your small minded badge loving opinions!

      • Hung Low

        The large car has been replaced by the SUV trend, some with just as large engines and worst fuel economy. Simple as that!

        What stops you from buying an Australian made Cruze? It ticks the very boxes you have complained about?

        • Phil

          What practicality box does the Cruz tick that Falcon doesnt?

    • Rocketman

      I’m not going to spend 30K-40K just to prop up the Australian car industry. The car companies should have made products that I want and not just stuck to their large car comfort zone. I’ll buy Australian if they make a car with comparable packaging and quality to any Honda, Mazda, Toyota or even the new Hyundais.

  • david

    CA, your information regarding Camry sales is incorrect. In the past 10 years, they were at their highest in 2004, when 40,356 were sold (3rd best selling car that year). Perhaps you are only counting 4 cylinder Camrys?

  • Sledge

    The dollar needs to be 50c again but with the demand for resources ongoing, it will take a while. Australian cars need to go upmarket a little further with v6 diesels, Audi/BMW styling and marketing that will shame aussie bogans from the masses of cheap pap they keep on buying and into recognising that quality will pay off.

    I remember the 120Y craze 35 years ago and the beaming owners who looked as dopey as the Excel apologists 15 years later – all feeling the need to bag Australian cars but never admitting they themselves were just cheap, tight a$$es who couldn’t give a stuff about fellow aussies and their jobs.

    • david

      What are you on about mate? The 120Y was made in Australia.

      • Spectre

        The point I was making was that many people that were too miserable to cough up a few bucks extra to buy an Australian car had to make out they were doing it for righteous reasons of poor quality or govt subsidy.

        If you haven’t got the cash, fair enough – just dont dribble shite about Oz cars when they are good value and compare well.

        Yes the 120Y was assembled in Aus but it was a world car not representative of Aus design & engineering. Its main virtue was price.

  • paulb

    Its not just the large car market thats collapsed,also the mid size market.Camry dominates the mid size market as Commodore the large.
    Big mouth Mays has done the Falcon no favours.The scairy thing to me is the new Chinese Foton,the quamtam leap on the Great Wall.
    Tough times for Toyota+Ford locally,but Holden must be happy with things.Buy LPG aussies.

    • Convict

      Indeed.

      We’ve only had 2 years of Great Wall (2 star ANCAP etc) and the entrance of Foton is a huge leap in advancements (engine, safety specs, 4 star ANCAP goal etc), and there are endless Chinese auto companies looking to expand overseas.

      Given the visible rate of improvement, I wouldn’t be surprised if they overtake the South Korean manufacturers within 5 years.

      • MattW

        Part of the reason for Chinese improvement (in everything they do) is the dodgy way the government makes any foreign company going in there form a joint partnership with a local company, otherwise it can’t do business. Then they rip off the IP the foreign company has spent many years & dollars developing.

        For this reason alone I won’t buy anything from a Chinese owned brand

        • Convict

          And yet all these foreign corporations are lining up to enter China so willingly, boy they are they silly.

          One would almost think all these corporations are getting something out of it.

          • Jack

            Access to the biggest market in town…

  • Peanut

    This is total heresy but maybe the only way for Ford and Holden to survive as local manufactures is to produce a joint platform together. They will still be able to apply their own styling and motors ect but share the cost in the development of a next gen platform.

  • Tony

    When Nissan decided to close its factory in Australia in 1989; the factory was closed. When Mitsubishi decided to close its Australian factory a few years ago, the factory was closed. If Ford, Holden and Toyota decide to close their factories in Australia; the factories will be closed. It is their money and they do not need to ask for permission. If they continue to make financial losses, it is only logical to close, which is what happened to Nissan and Mitsubishi in Australia.

    Toyota in Australia has reported two consecutive years of losses (despite receiving subsidies from Federal and State governments). In today’s Financial Review newspaper, Holden’s MD has stated “the carmaker’s manufacturing future was hanging in the balance because of the unstable political situation and uncertainty surrounding the carbon tax.”

    General Motors has stated that it will bring Opel cars into Australia under that separate brand. Perhaps Head Office has already decided to implement an alternative brand in Australia under Opel, in case it decides to close Holden.

  • Scotto

    It felt like I just read a huge sales pitch for Holden….Either way, it would be said to see our local manufactures disappear.
    If anything, Toyota will be the ones who survive with their huge export market. Ford is “kind of” going down the right path with this One Ford platform thing. Kind of praying that we see it shared with the Mustang rather then the Taurus, as the Taurus is just way too big for the Aussie market…
    And who knows where Holden is heading, they look ok on the surface, but 5 years of looses, (Yes I know they just posted a profit, for the first time…) how do we know that the major damage hasn’t already been done.

    Also be nice to see the media post a positive rather then a negative for a change. It’s funny how the media changed their tune as soon as the Magna/380 disappeared. Everyone know the Magna had a pretty decent export market too…??

  • Boss

    The biggest problem for Ford Au is that Ford NA only looks after American interests and American jobs. Why do you think the Falcon has never been exported, even though it is a better product than what was/is coming out of the US.

    • Daniel D

      Exactly Boss. Ford US also underfunds Ford AU, which shows in all sorts of ways like the time taken to incorporate new technology in Falcon and Territory. The deletion of models that would have been viable if Ford US gave the Australian operation the all clear for exports to prop up sales. The slow adoption of standard equipment in Australian made cars and finally and most tragically for Ford Australia’s future.

      The imperative at Ford Australia to do everything on the cheap. This shows in cost cutting, dodgy warranty practices and a very poor dealer network. All of which is harming the brands long term reputation and future.

      • Boss

        Why do you think its taking so long for Ford NA to decide on a GRWD. They are trying to find away to kill off the Falcon but Ford Au has done such a good job with the very little money thats given to them. They’ve tried before and it didn’t work.
        What I don’t understand is why throw something away that is so good and can only get better if they put some serious money behind it

  • http://Frosty Hicks

    Might as well have written an article about what the lottery numbers are for next week.

    No-one here can predict the future. We are in the middle of a ‘enviro-green’ changing period where our cars have to have the exhaust output of a mouse’s fart per annum.

    I’m not going to make a prediction, I’m just going to sit, and buy Australian until such a point that Australian cars are no longer produced.

  • Crummydore

    I was only thinking about this yesterday – years ago the round bodied Hyundai Excel was selling in spades – there were almost more of the strangely coloured buzz boxes on the road than Commodores and Falcons.

    Now, next time you go for a drive, see if you can spot any – bet you cant, however Aussie made cars of the same vintage are there with 250,000 plus km’s and a few dents and dings.

    My point?

    There is a lot to be said for cars that are designed, developed and built in Australia – we need to keep that going at all costs for so, so many reasons. Free trade is not in Australia’s best interest long term and this needs to be addressed – government, unions and the general public need to make this an issue now before it is too late – the writing is not on the wall…. yet!

    • Scotto

      You serious? Those excel are everywhere..I see 3 in the car park outside…

      • Crummydore

        There must be some very loving owners where you are – there are none within cooee of anywhere I have been of late.

        Regardless, we do not want to lose our car manufacturers.

  • F1MotoGP

    Car production around the world. Australia is 25th.

    1 Japan 11,484,233
    2 USA 11,263,986
    3 China 7,188,708
    4 Germany 5,819,614
    5 South Korea 3,840,102
    6 France 3,169,219
    7 Spain 2,777,435
    8 Brazil 2,611,034
    9 Canada 2,572,292
    10 Mexico 2,045,518
    11 India 2,019,808
    12 UK 1,648,388
    13 Russia 1,508,358
    14 Thailand 1,296,060
    15 Italy 1,211,594
    16 Turkey 987,780
    17 Belgium 918,056
    18 Iran 904,500
    19 Czech Rep. 854,907
    20 Poland 714,600
    21 South Africa 587,719
    22 Malaysia 502,973
    23 Argentina 432,101
    24 Sweden 333,168
    25 Australia 330,900
    26 Taiwan 303,221
    27 Indonesia 296,008
    28 Slovakia 295,391
    29 Ukraine 295,260
    30 Austria 274,932
    31 Portugal 227,325
    32 Romania 213,597
    33 Hungary 190,823
    34 Netherlands 159,454
    35 Slovenia 150,320
    36 Uzbekistan 110,000
    37 Egypt 91,573
    38 Finland 32,770
    39 Serbia 11,182

    • johnniesazzler

      Sorry F1MotoGP, but your figures are old, probably around 2007. Last year (cal 2010) 243,213 vehicles were manufactured in Australia. Not sure where that puts us in world rankings, but you can see we’re losing ground fast.

      • F1MotoGP

        Yes I know. I could the latest figures. My figures from 2006 but still shows that slowly we are going down.

  • Peewee

    Broadly speaking car buying patterns haven’t changed all that much in this country since we began local manufacturing in the ’50s.
    By this I mean that if you compare the size of the Holden/Falcon in the ’60s & ’70s its not that much different to the size of the popular cars of today i.e. Corolla/Focus et al.
    When you consider that a Commodore/Falcon weigh the best part of 80% more than when they were originally introduced it doesn’t take much pondering to work out the direction those two cars are heading towards.
    If the two manufacturers of those vehicles persist in making and selling this style of vehicle it will surely produce the inevitable result you’re talking about here. For the record I happen to like them and I enjoy driving them.
    To their credit the manufacturers have taken an axe to their running costs to the extent there’s not much difference from the running costs of the category below them.
    Personally, I’d be disappointed to see manufacturing of motor vehicles cease in this country as I, for one, believe its an important element of manufacturing.
    That automotive companies have insulated themselves from their customers – they’re obviously not out there talking to them! – is, probably, the main issue here.
    The fact that the car companies are questioning their viability rather than researching, planning and building cars suitable to ours and other markets is testament to that!
    Paradoxically the Australian arms are a centre of excellence for design and engineering.
    There’s no reason we can’t export to other countries ( our wages cost is not deal breaker – I’d wager) other than that the head honchos in the ‘good ol US of A’ are not motivated enough to consider it.
    Perhaps a bit of gentle persuasion from the Government could be the order of the day here.
    Perhaps when we (Gov’t) do negotiate with them we take a more dominant attitude than the subservient one that appears to be the case nowadays.
    I agree, the problem is not a simple one.
    But for car companies to simply say ‘its too expensive here’ and giving up is not good enough, they need to be active in the market place and working towards recovering their lost sales.
    If the car companies do decide to close operations here perhaps we could say to them “fine, close if you will and become an importer, just make sure that what you import contain Australian components – say 35%”.
    It might be just enough of an incentive to cause them to refocus on Australia!

  • Fred

    Just google:

    Holden’s local future in doubt: report

    Published 7:54 AM, 27 Jun 2011

  • Mojo

    Australia will not have a car industry next decade, mark my words.

    To all those in Victoria employed by the car industry start looking for another job, your states economy is in for a rough ride.

  • miki

    We NEED to drive Right hand side.Everything will be o.k.And, by the way,everyone is right

  • Dan B

    Back it in if Ford goes the other two won’t be far behind. It’s going to be Australia 1950′s and ’60′s all over again when we drove imported cars, paid heaps for them and waited forever for them to arrive. That’s if anyone has any money after we have been taxed to death e.g: Carbon Tax for one.

  • Roger Ramjet

    The sad future of Australian manufacturing will read:

    “designed in Australia”

    “Made in China”

    We needed our own Australian brands of cars, but our country is full of sell outs, from the government to our farmers! Now that we are selling off our resources, the main industry in Australia will be 3PL logistics, transport/warehousing and tourism!
    we are also fooked with no manufacturing industry if there ever was another decade long war!

  • Anton

    Food for thought. If you don’t have a local manufacturing base then you don’t have the capability to put your local manufacturing industry on a war footing when needed. During World War II Australia (with much smaller population and industry) was readily able to move across to making planes and tanks (and support the war effort) because it had an automotive manufacturing base. Without a manufacturing base, by the time we get funds/equipment from our “Axis of Evil” partners we’ll all be singing off a different song sheet if China (or any other war capable nation) decided to take our commodities rather and pay for them. Also, federal government support of the car industry here is still way short of other countries – take the US and Sweden, which support their industries to the tune of more than $250 per capita. Australia? About $20 per capita. Fact is, everyone whinging about our local industry better be prepared for paying more for imports too if we lose the local industry. Why? Importers won’t need to discount as much to keep pace with Ford, Holden or Toyota. They’ll see profit ahead of people. It’s a business.

    • Convict

      How is China a “war capable nation”?

      They don’t even have a bluewater navy, lmfao.

      Stick to watching Simpsons imo.

  • Gibbo

    Why can’t Ford US adopt Falcon’s underpinnings for the Mustang? and share the rwd platform instead of giving us the Taurus.
    The new LPI LPG Falcon reads interesting. If there was a turbo version of it I’d be down at the Ford dealer tomorrow, cheque book in hand.

  • Brendan

    Price is only one factor. when you can get a quality product where the knobs don’t fall off and the electrics continue to work you will go back to that supplier. Just drive a 6 year old version of anything and you will know weather or not it has true quality. Also, I don’t know who Ford Australia was listening to when they maintained an inferior lpg system on the market for so long. Where they trying to drive customers away on purpose. If people are turning away to diesel and four cylinder models, then why not give them what they want.
    The export market is a more complicated fish with tariffs abound in most markets we export to.
    A clever country needs to innovate and come up with clever solutions to maintain it’s economic base and keep employment at sustainable levels. Of course China will do it cheaper so we must not compete on their level.

    We have to do it better.

  • Rocketman

    Australians have been sold a dream by Ford and GM marketers which is that RWD, large cars is what everyone wants and needs. For a time this was true.
    The tide starte turning years ago when the Magna died with no large car replacement and the Maxima went unloved. Yet Ford and GM still pomote this large car dream when petrol has doubled in price, families have got smaller and there is no need for this wasteful product. Sadly, I see no future for the Commodore and Falcon in its current form. Smaller and efficient cars are the immediate future and our car companies are caught with their pants down.

    • http://caradvice OSU811

      It seems to be the growing popularity of SUV’S that has caused the downward spiral, Not because people want smaller, just more practical!, look at sales of Prado for eg, never been more popular!!

  • RunFlat

    You can blame me for their demise. I recently bought a Mazda after inspecting the offerings of the major players.
    Firstly, as the article alludes, the 4′s of today are better than yester-years 6′s and a ’3′ is about the size of an EH. There is no market for American Size cars any more.

    • Spectre

      Well apart from the fact that the Commodore has been the biggest seller for the last forever. And that the Falcon and the Comm are too small and everyone decided to go SUV.
      If they gave us BMW/Merc syle and performance with a serve of Miami V8, LPI, diesel and perhaps hybrid they could win back the punters as big sedans are still a great drive and practical to boot.

    • nickdl

      Remember though, that in the 60s and 70s, people were generally a fair bit smaller than they are now. American-sized cars might just suit the ever increasing number of American-sized familieis in years to come…

  • Al Juraj

    Car manufacturing tends to be much like call centres. Companies would rather pay offshore employees a tenth of a typical Aussie’s salary, maybe even less, to do the same thing.

    Commodores should be sold dirt-cheap considering their quality, but to pay local assemblers is quite a fortune, hence the high price. If it were built in countries like China or India, the RRP should be around 20K only, or better yet, improve on the car’s materials and be sold at the same price as now.

  • Mark Roberts

    Any government’s first priority should be to ensure its people have jobs. Almost everything depends on this basic right (eg the economy, personal happiness etc). So surely the only solution is to do what so many other countries successfully do and (re)introduce decent, fair tariffs.

    • Jack

      Rubbish. Jobs are not a “right”. As for a government’s first priority, it is to make itself as small and unobtrusive as possible, and let the people (who are incidentally the “market”) determine their own futures.

  • http://www.wavebox.com.au Charles van Heerden

    Firstly, Australia should be very proud of our capability to design and manufacture cars. There is no need to import vehicles from other countries, as long as we understand and meet the needs of consumers.

    For too long have we continued bigger vehicles, ignoring the shift in consumer demand to smaller vehicles. As result, our car manufacturers are now having to play catch-up.

    Developed countries, such as the USA and Australia, can continue with car manufacturing, as long as we design and manufacture the right vehicles firstly for our own market, as well as becoming a centre of excellence for a specific global product.

    Manufacturing can continue to be part of our future, if we invest in the right technologies for the future.

    • Convict

      So what you’re trying to say is GM wouldn’t have gone bankrupt if they knew if and how and when they would be bankrupt, as long as they were proud of their vehicles.

      amiright?

  • Charlie Windsor

    Tax mining, tax manufacturing, stop agricultural exports, carbon trading tax, tax rain water Paul Keating’s descendants are developing the ultimate banana republic, loss of car manufacturing is a major casualty. If we didn’t have natural resources, our government genius’ would have us all selling string bags on street corners

  • Jacob

    When a Victorian company (Ceramic Fuel Cells Ltd) decides to build their factory in Germany instead of Australia, because they got more support from a state in Germany than Victoria, you know there is something wrong.

    BTW, rich countries smaller than Australia have manufacturing industries: Finland, Switzerland, Austria, etc.

    There’s more to manufacturing than cars.

  • Jack

    “The cost of doing business in Australia no longer added up.”

    Welcome to ‘Atlas Shrugged’, people. Flee, disappear like John Galt or stay an be amused as the bumbling central planners implode what once was a self sufficient, productive nation…

  • jimbo

    “Both Holden and Ford managed their job losses in a highly ethical way” This part of the article is absolute crap. Holden treat there employees with no respect. The whole ship will go down and all those arrogant managers will wonder what hit them!

  • RR

    Holden,
    Ford, and Toyota – all three are foreign owned companies and the profits go to their
    overseas owners.

    The
    Australian collects Tax on sold vehicles and the car workers PAYE.

    When demand
    falls, the Australian Government hands out MILLIONS of dollars to the Car manufactures
    with no hope of seeing a return.

    If a company
    falters NO government should dish out bailout funds unless it is willing to do
    so for ALL companies in trouble be they a car manufacture or your local coffee
    shop.

    Whilst you
    may be thinking about the Millions of dollars the Government has wasted on car
    companies, spare a moment and ponder this next figure as an  even bigger waist of OUR money – Australian
    Defence Spending $24 BILLION DOLLARS PER YEAR !!

  • Areopagitica

    Crepe hangers in OZ, please reflect that the USA RE elected its Marxist.  Now all the horrid scenario of punitive social engineered taxation, kleptocratic cronyism and impotence in dealing with the outside world have been endorsed and the desire to bring about the destruction of wealth and the dismantlement of US industry that this presages should be good news for Canada and Australia.  If you chuck your lady with the beak and give the world an oasis of sanity we in the northern hemisphere will apply for immigrant status like you would never believe.  

  • Areopagitica1

    I remember that Ford Dearborn had some Australian Falcons show up in the mid eighties that were amazingly trimmed, styled, engineered and powered, as compared with the dreck we ourselves were dishing out.  I could not fathom how we made three decades of the same crappy inefficient integral manifold one barrel six while the OZ investment modernized that cylinder head three times, and fixed the rear suspension to boot.  Your problem was not Ford’s then. OURS in the USA was.  If Madame Gillard quits reading out of Tony Wedgwood Benn’s playbook on socialist nanny statism and goes cold turkey on subsidies then you taxpayers might have a fighting chance of buying that new car.  There is not a natural cause why the entire world is being destabilized economically, it is clearly as manmade as the global warming ain’t.

  • Henry

    Australia, imagine this, no manufacturing, no overseas airline , no agriculture, minerals plundered and all gone, then we have 3rd world uneducated Centrelink customers standing next to un – employed Aussies.        The money that is spent on welfare and the armed forces and the list goes on.  No money coming in population going up—- Sounds like a country , or should I say 3rd. world country. The Socialists will be happy.        We will have created our own Aussie boat people  trying to get to some place which has a Centrelink office who will feed  us etc.   Aussies wanted high wages for themselves but wanted cheap everything else that somebody supplied. Oh and I nearly forgot the most useless bunch  of wackos running the country into the ground.                                                                                                

  • David Thailand Auto

    just benchmark other countries protection, Tax on cc of engine for example. Select the best model for Australia. Its no cash handouts we want its parity with other countries methods.