As you most certainly know, the recent closure of Ford’s Victorian engine plant cast a shadow of doubt over the entire Australian car assembly process, however Ford Australia has put the affected workers to use, and with news that the next generation Ford Focus will be built in Australia, things are not looking too bad, right? Not according to the new car buyer’s Dog & Lemon Guide.

Editor Clive Matthew-Wilson doesn’t share our optimism about the production of locally manufactured cars. He believes that Ford, Holden and Mitsubishi will all eventually stop manufacturing in Australia.

Both Ford & General Motors are in serious trouble globally, while Mitsubishi Motors Australia is haemorrhaging money. Therefore, it seems inevitable that their Australian car assembly operations will be phased out.” Matthew-Wilson said

While Toyota surges ahead as the largest and most successful car manufacturer in the world, some of the best known brands continue to struggle. Ford Motor Co. posted a $12.6 billion global loss last year, General Motors managed to lose $2 billion globally in the same period and Mitsubishi lost an impressive $226 million in Australia alone!

But the bad news doesn’t stop there, although more new cars are being sold than ever before, with sales expected to top the 1 million mark in 2007, the overall growth of the industry has not reflected on Australian manufactured cars. In 1998, 36.1% of all cars sold in Australia were made here, that figure has dropped to 19.4% so far in 2007.

How long do we have? Matthew-Wilson believes it could be in one year, or in ten years, but the time-frame is not the issue as it will eventually happen. He also believes that struggling Japanese manufacturer Mitsubishi will be first to close up its car assembly operations.

“As things stand, it will require something of a miracle to keep the Australian Mitsubishi factories open.” Mr Matthew-Wilson said

Of course no one wants to hear this sort of news, but the reality seems to be bleak for a once successful business model.

…the fact is, car manufacturing in Australia is only marginally profitable even in good times, and for many manufacturers the good times are over.” he said

Let’s just stop here and we can tell you why we disagree with Mr Matthew-Wilson, although the situation currently looks desperate, as we have seen with Holden and their successful export operations, there is no reason why Ford (and maybe even Mitsubishi) cannot follow the same path.

Furthermore, the reason for the drop is sales appears to be obvious, Australia is building big and hungry cars, while the market demands medium to small, fuel efficient cars. This is the same story in the U.S. and sooner than later manufacturers will decide to change plans, Ford has already signalled it will build the Focus here, why can’t Mitsubishi build the Lancer here?

Nonetheless, if we are wrong, just imagine the situation in 5-10 years time, Mitsubish is long gone, and Ford and Holden are looking at closing up local operations, this will lead to Toyota as the sole volume manufacturer in Australia, and although the Japanese manufacturer is currently enjoying the most successful period in the company’s history, there is no reason why upper-management would not push for a move overseas to cut costs.

So we want to know, how would you rate the Australian Car Assembly operations chances to stay alive in the next ten years?

{democracy:9}



  • Graeme

    The Australian car manufacturing industry used to depend on tariff protection and government handouts for its survival. Its future will be based on exporting as many cars as it sells locally. There is no other way to obtain economic volume. Long term survival looks like a 50/50 bet to me.
    By the way, although Clive Matthew-Wilson has an enormous amount of knowledge, he drives a 1956 Morris Oxford with an aftermarket airbag because he believes modern cars to be unsafe. Figure that one out.

  • Plutonus

    I believe Holden and Ford will stay here as long as possible, but I can see Mitsubishi leaving unless they start building another car here or the 380 starts selling well.

  • Tony M

    Unfortunately our survival will depend on the stength of influence that Ford and GM AMERICA have over Australian car design. In Australia we tend to follow the European model when it comes to car design but we try to apease the American car mogals. In doing this when tend to take one step forward and two steps back. I believe the Holden Torana that was shown at the Motor Show recently and the Ford Mondeo are the right mix for Australia. People forget that when you have a country with high personal debt you don’t make cars that drink fuel. Currently the Leasing of cars in Australia keep the large cars going. But if those people who had to lease their cars could not claim fuel then there might be a different direction in the car sizes leased.

    Ford, Holden and Mitsubishi need to focus on, need I say, diesel engines that can handle heavy vehicles and give low fuel consumption figures.

    We buy what we can afford to run. Not what the American’s can afford to run.

  • falcon

    I don’t see ford going anywhere seeing they have just invested in building the next generation focus over here in 2010.

    Holden i don’t see going anywhere soon either, mitsubishi is another thing, I think maybe in the next 3-5 years we’ll see Mitsubishi move away from building cars overhere

  • Paul

    I think as long as the Australian government keeps them afloat they wont be closing down, so my choice to the question would be NO. Left to the market though, I would say that Holden almost certainly would close down, Ford I think would stay alive as they have some decent vehicles that are suited more to the future such as the Fiesta, Mondeo and Focus (conversely to Holden who have Korean trash Epica and Barina).

  • Adam

    So the Aussie goverment is the only political movement to offer local assemblers incentives to stay? including toyota?
    I don’t think so…that argument is irrelevant and getting old.
    Will we all die one day? absolutley! many things are certain and to me this assumption has been made many times…flogging a dead horse in my opinion with assumptions on local manufacturing.
    How many times did people speculate over the last 20 years when some models were no longer made/assembled here?
    We know that all 4 are staying put at this stage and if things change, so be it…progress is progress.
    I say NO.

  • Paul

    Im not really going to get into this, but weve already discussed this before, Ford and Holdens government handouts far exceed anything that Toyota gets. And its not just for producing vehicles here, for example we know Ford were given money to develop the I6 into a hybrid. So all that money which was given away was for NOTHING as the I6 is now scrapped. Many other examples. Point is, without such support its hard to believe Holden at least would be able to survive given their poor range of vehicles.

  • Adam

    Paul…

    The inline 6cyl goes in 2010, it’s 2007 currently, so thats make it’s redundant in 2010, not now…

    And again Paul, your point of Ford/Holden getting more money is again weak unless you can provide proof of figures, which u refuse/can’t do…

    So stop with the rants you can’t back up, ok?

  • golfschwein

    Take everything Clive Matthew-Wilson says with a grain of salt.

    His Dogs and Lemons guide makes for depressing reading and leaves me with the conclusion he must be a Toyota stooge. All Toyotas are fabulous, even the 1990 Camry (I’ve checked – he makes no mention of their chronic head gasket leaks and 3rd gear synchro failures, an experienc of mine shared with many) and everything else on the road is rubbish.

    The Morris Oxford claim is news to me, but given his ultra conservative views in other areas, it wouldn’t surprise me if true.

  • http://Toyota Blue Blood

    HERE, HERE, Adam

  • Glen

    I think both Ford & Holden will still be buidling cars here until their parent companies die off (which i doubt) But to survive I think that they both have to have the facilties to build more vehicles and export them as well as engineer new models. If Falcon & Commodore become global models (available in majority of countries) and we were the only country to build and develop them, our industry might not need the handouts. If Falcon went to the States & the Middle East I’m sure their success would rival Holden because in the Middle East the last thing they worry about is fuel consumption (try less than 30 cents a litre). If Ford scrapped the Taurus and instead imported Falcons as the Family car it could become lucrative. Its exports that will save our industry and from what i hear thats where we’re heading. We’re not dead yet

  • wheelnut

    I believe that based on recent rumours.news and events the local car industry will be able to survive.

    The main reason is the Exports from both Holden and Toyota. currently the local:export ratio at Holden is 40:60 and is likely to change to something like 25:75 in the near future.

    Then there’s the recent announcement that Ford and Holden have become the R&D centre [including design]for RWD projects.

    There are rumours that the TT-36 will become the next Pontiac G6 sedan which indicates that the Torana will make a comeback [repalce the Epica]. There are also rumours that Ford could possibly build the next Mustang due in 2010.

    This shows that Detroit is finally recognising the potential of what their Australian based operations can achieve compared to thevarious facilities in the USA.

    All of which could mean As exports increase and the role the Holden and Ford also increases it will mean that they’re able to sell cars which sell in relatively low numbers here [like the Monaro/Mustang]because the majority of production is sent overseas.

    Toyota isnt in trouble as their exports are well in advance of Holden and Ford.

    As for Mitsubishi? they would have been fine if they allowed Tom Phillips to build a car from scratch and convert the Magna into a RWD. Then they could have offered customers 4cyl 6cyl and V8s which would have meant possibly a 3rd make in the V8 supercars.

  • Matthew

    Not sure why anyone would bother buying a book telling them what *not* to buy?

    Surely you’re better off finding out what vehicles are best? Start from the top of the list rather than the bottom, in other words.

    Has anybody ever heard of the editor? Didn’t think so.

    Just because you have the time and money to print a book doesn’t mean your opinion is worthwhile . . . .

  • Osienna

    The local car manufacturing industry will remain if the government continues to prop it up with generous tax concessions and skewed incentives. For instance, imagine if the ATO stopped encouraging people to rack-up unncessary kilometres with their ridiculous FBT rules (less vehicle usage, less wear-and-tear, less new cars on the road).

    Better yet, imagine if they started allowing people to claim public transport or a push-bike as a deductible work expense in the same way as the motor vehicle… the population might actually abandon the car and choose alternate modes of transport. But of course, such innovative thinking will deprive them of healthy streams of addictive tax revenue: fuel excise, GST, stamp duty, motorway tolls etc

  • Andrew. M

    osienna,
    the government most of the time sets boundaries that encourage spending to keep various industries a float. also regulations with just about everything keep coming in all the time meaning you now need this and that to comply with this and that. its neverending and the age old saying “money makes the world go round” can be applied to why to government does it.(cause its true)

    Paul,
    adam is right. i dont watch repeats on TV and i am getting sick of seeing the same repeat arguments on here. (yep that excuse is getting old)
    here is how i hope you will get it…….
    yep ford and holden might get more, i dont know for sure as i havent seen figures and i doubt you have. but the fact that ford and holden produce/develop more here i would say that is cause for more funding wouldnt you?????

    hey has anyone heard of LPG?? i cant understand why if people have a problem with large car fuel costs then why not convert them to LPG and then they will run at cheaper than a 4cyl.
    i cant believe that people will get queezy at another 2L 100k as the punishment for driving a large car. just have a look at what you loose for that 2L/100k you are trying to gain

  • http://AustralianCarAdvice Shane T

    The funny thing about all of this, Ford and Holden bagged Toyota business strategies for years but look who is having the big loud laugh now. While Holden and Ford struggle to stabilise, Toyota soldiers on like a British Gerker.

    I have read recent articles mentioning that GM and Ford are now trying to steamline thier operations into a similar manner that Toyota has already been doing for generations.

    I guess Ford and Holden having to situp and take note from Toyota how to manage a real successful, lucrative company would be cutting deep into thier pride.

    Despite all the critics of Toyota, they are not the one with problems except finding a vault to store all of thier fortunes.

  • The Axe

    Every manufacturer will have their time in the sun. It’s Toyotas turn and good on them. But, Holden and Ford will be here for the long haul. Mitsubishis days are numbered with only around 1000 380′s sold per month.

    Both Ford and GM globally are not sitting back while they bleed red ink. They are turning things around, and mind you they are both doing well in Europe, especially Ford.

  • Tony M

    I might be wrong, but the Mitsubishi 380 is of American design which has been tailored to Australian conditions. So the issue of whether Mitsubishi lasts in Australia has a lot to do with America (I think).

  • Jamison

    Most have already inputted on the current situations with Ford and GM. I work in the automotive industry in itself, and from what I have learnt so far. Its not very easy to simply start exporting vehicles, as some say Holden should do, yes they are in the process and are planning to increase volume exports, but you have to factor in that cars are engineered and designed specifically for certain areas. Not only that, but agreements and partnerships with suppliers within the countries of assembly will limit the amount of cars being imported from another country. I read someone say, Ford should get rid of Taurus and start importing Australian made cars?… I don’t see anyone benefitting there except the Australian manufacturing plants and workers. Why exactly would Ford stop production of this vehicle in its current plant? Not only is taurus an established car in the U.S, but the plant it is assembled in has much more workers and are bigger than the Australian plant(s). Currently, from information I have learnt, Ford U.S is not exactly over loaded with demands for their vehicles hence manufacturing plants in the U.S are under pressure already. And the U.S market dwarves the Australian market. So yes, decisions are very tough, one reason why you wont see much support from many industrial partners about importing cars, especially suppliers.
    However, as most stated, Ford’s plans to produce the focus in Australia, is a good step, its logical. As trends have shown that people are indeed looking into the small to medium car market more rather than the big car market. Sure, Holden is enjoying the VE top the sales chart, but considering that most of that sales go to people upgrading from their previous model commodores, not to mention the tribalist mentality that I think, is a signficant reason why Holden and Ford are still afloat over there.
    Also, mind you, that this doesnt just concern Ford and GM, but th Australian automotive manufacturing sector as a whole. China is fast becomming a global supplier option for all manufacturers as the cost of suppliers there are a fraction in comparison to others. And I know that all companies are actually battling to establish their presens over there, so even the Korean manufacturers can easily claim huge dividends. The only major obstacle at this point is the cheap imitators from smaller Chinese manufacturers, I am not too sure on the rules about, exporting there, but it would have to be under a controlled manner, favouring the local manufacturers.

  • Adam

    Agreed! Ford having territory, falcon and focus assembly here will only help Ford AUs adapt to changing local conditions…

    It’s amazing to think that Ford AUS has never had any major exports programs for falcon or territory like Holden and Toyota do, yet manages to do as much as they do…

    There was even a rumour going around when territory was released that Holden could figure out how Ford AUS could produce such a vehicle for such a relatively small volume!

    I wonder if you took Toyota and Holdens exports away who would actually be the healthier local producer?

  • Neddy Smith

    They will die if they don’t get their act together and stop dishing up badly designed cars that are not fuel efficient, of bad quality, poor resale value, costly to repair.

    Why buy Australian?

  • Neddy Smith

    By the way I drive a European brand – which is cheaper to service and repair than my 2000 Holden Commodore.

    • Dave

      that must be the exception to the rule

  • Roy

    I operate a small fleet of Australian built motor vehicles (all Falcons – 2 utes and one sedan). Two pertol and one dedicated LPG. Most running is highway and the petrol cars return around 10 litres per 100 k’s regularly like clockwork. A 4 cylinder buzz bomb might do about 7 litres per 100. If petrol averages $1.20 per litre that equates to a petrol saving of $3.60 per hundred or $360 per 10000 kilometres. If I tried to do with say a Jumbuck for example what I do with the Falcon utes I would have to travel at least an extra 50% further. How would that save me money? Anyway it is worth a few bucks per week to protect Aussie jobs, Aussie traditions and Aussie made products. Anyone who drives imported cars is not a true Australian patriot. God help us if Aussie made cars vanish. I pray for the industry’s survival. One thing that really irks me are the farmers and manufacturers who bleat about cheap Chinese imports costing jobs and profits but they drive imported cars. What hypocrites.

  • Al Juraj

    Maybe MIVEC will cure 380 sales woes. It’s sold in the US as the Galant, but it has MIVEC back there. Why can’t Mitsu OZ feature that in their midsizer?

    The new Falcon looks promising and may well head for the States as a replacement for the Crown Victoria. The Commodore has already been exported to China as Buicks, and in America as the Pontiac G8 soon.

    I really don’t think that despite all financial crises, these makers will stop manufacturing here. Australia does care for its people and has pride in everything that is made here and brought worldwide. Many may argue about Holden’s true nationality, but one thing’s for sure – there are still Aussie jobs generated by this company.

    Ford OZ, on the other hand, has its own independent designs. The Barra DOHC 4.0 in the Falcon is their own and is not available in American models. The control blade independent rear suspension is also unique downunder. The current Mustang still has the SOHC V6 that used to power Falcons up to the AU, as well as a primitive live axle rear chassis setup. Finally, the Territory is a true Australian, and could have actually been proxied for the Explorer.

    Despite the layoff, I believe they’re on the right track. Once they scrap those 4-speed autos and improve on reliability, they can possibly come to the top again. They’ve gotten the recipe for exterior design and handling right anyway.

  • Me.

    Hope fully not all Australian cars will leave the contry. I think the Dog and Lemon Guide person must be japanese that hates Australian cars or something.
    No offense, sorry!

  • Peter Schuback

    Holden a name that every person thinks is Australian , I brought three new Holdens thinking that I was createing jobs for Australians , I found out after buying them that not one of them is manufactured in Australia , Is that false and misleading advertising and should manufactures of all imported products have to inform the Australian public where the products they are buying are manufactured .