The Demise of Automotive Production in Australia

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The Demise of Automotive Production in Australia 5 May 2020

In the third quarter of 2017, Australia closed down the production of vehicles. Mistubishi was the first OEM to shut down the factories in Australia & resulting in thousands of jobless people. It was the first time in Australia that Mistubishi has stopped the production. In January 2017 Toyota also shut down the production due to high manufacturing cost & low economies on large scale. At those times there was the biggest loss of employment in the vehicle industry.

What we study in this article let’s look at

  • When & how Automotive Industry Collapse
  • History
  • End of Estimated Future Forecast record
  • End of Sedan Cars is major reason for demise
  • Labour cost affecting the Industry

When & how Automotive Production in Australia Demise-

In 2016 ford shut down the production of vehicles then followed by holden in October 2017. Due to this, 2500 people become jobless. Holden, Toyota & Ford were three major car manufacture in the country. When ford closes their production in October then Holden & Toyota were able to do the production for 12 months. As they have higher production volumes but not have enough demand from long term point of view.

History of Australia Automotive Industry

In 20th-century car automotive industry was created in Australia by international manufactures. They opened the Australian plants to create this industry. Ford was the first major carmaker in Australia.

In 2004 the first factory in Adelaide close down the manufacturing of vehicles and then in 2008 due to this Australia suffered a lot in terms of unemployment. It has made jobless to thousands of people. After this tragedy, in 2013 ford also declare that they will shut down the production 2016 & start removing people from their company. In October when ford stopped the production in Australia, a few weeks ago Toyota & Holden also terminate their production in Melbourne & remove 2500 people from the job.

When the Government ask termination plant then they said high cost was the reason to shut down the plant.

2, 00,000 Jobs Lost–

As per the John Spoehr, Professor of Adelaide university, we haven’ t seen such destruction of the industry in recent history. They said this when the Toyota plant was closing. He told that approximately it will cost the country about 200000 well-settled jobs.

End of Estimated Record

As per the Toyota manufactures, Australian car manufactures were responsible for all economic loss. Because forecast record taken by all vehicle manufactures were not the same. The industries itself was doing heavy investment in car industry to maintain its survival. This was the exclusive reason that they were not able to handle the production any more.

End of Sedan Cars

No demand for sedan cars in Australia also closes down the 100 years of vehicle production. People were only demanding V6 and V8 for a long time. The demand for V6 and V8 was stable for many years. The stability of demand for these vehicles in the mind consumers has removed the other vehicles from their list. It was another big reason.

Labour cost

There is a cheaper labour cost in Australia as compared to other countries. In Australia, it was $50k while in Thailand they get $9k. Mostly vehicles came from Korea, Japan & Thailand and these are fully conversion of small engines & SUV. Therefore, the prices of the car were low to meet up the daily requirement. So, the country was facing a very difficult situation.

The Bottom Line!!

Declining of Automotive Industry in Australia is become role model for other countries. Kia’s vehicles have taken the place of Ford, Toyota & Holden. There will be no vehicle of these manufactures in the coming year. These are the reasons for declining automotive industry in Australia.

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