With GM closing its last Horton plant on Friday (Oct. 20), the Australian auto industry will come to an end, with a glorious, long-standing Australian auto industry officially ending.
In fact, in the past few years, the end of the Australian auto industry has been full of news throughout the market. On Friday, this end will eventually become a reality. GM is currently the last carmaker to stick to production in Australia, officially announcing the end of the Australian auto industry following the closure of the Elizabeth plant near Adelaide, South Australia, on Friday.
In fact, before GM left Australia, Ford stopped manufacturing in Australia a year ago; In October 2016, Ford, which has a 91-year-old manufacturing history in Australia, eventually closed its factories in Melbourne, Victoria, at Brode Arrow and Gilang. Ford, which could not bear to leave, said it would remain in Australia even if processing was forced to stop, but Ford's new status was an importer and distributor and employed about 1500 people in Australia.
In addition, Japan's Toyota Motor Company has officially closed its Camry manufacturing plant in Altona, Australia, some time ago, ending Toyota's 54-year-old Australian car manufacturing business. Toyota's Altona manufacturing plant is located in Victoria near Melbourne. Toyota said as early as 2014 that it would stop manufacturing cars at its Altona plant because of growing competition in the industry and the fact that Toyota is not bullish on local market growth.
The glorious years of Australian automobile manufacturing
Ford, Toyota, GM Horton, all have a long history in Australia, they have not only contributed to Australia's economic development, but also in the Australian manufacturing history of a brilliant.
Australia's auto industry dates back to 1925, when Ford first produced cars in the country, when the legendary Model T opened Ford's glory in Australia. Horton Motors, which was acquired by GM, also began manufacturing cars in Australia in 1948. In 1963, Toyota opened its first overseas production plant outside of Japan in Australia.
At its peak, Ford, Toyota and GM could produce one hundred and fifty thousand cars a year in Australia, where the glory of the Australian car market has faded over the past 15 years and the auto industry has collapsed in 2016. Australia's home-grown car sales totaled just 86,999 vehicles.
Toyota has been Australia's largest carmaker and Australia's largest car exporter for the past decade. Toyota has been trying to extend its processing operations in Australia, but as other manufacturers "fled", Toyota was struggling to support itself. Australian auto parts suppliers, which back Toyota, Ford and General Motors, could not survive on Toyota alone.
Low tariffs and high labour costs are the main reasons
The reasons for the eventual end of the Australian auto industry are diverse, but the main reasons are the low tariffs on Australian cars and the high labour costs in Australia.
Australia's tariffs on imported cars are very low. It is reported that non-luxury cars from countries with trade agreements with Australia enjoy a zero tariff policy for entering the Australian market, and non-luxury car tariffs for countries without a trade agreement are only 5 percent. In this case, a large number of imported cars from Thailand, Japan and other zero-tariff areas have seized Australia's limited market share, and the survival of local carmakers has become unsustainable.
On the one hand, tariffs on cars are low, on the other hand, labor costs in developing countries are much cheaper than in Australia. Thailand's minimum wage is equivalent to less than A $2 an hour, and Thai car assembly line workers earn more, but only A $6 an hour, with an annual income of about A $12500. The average wage in Australia's auto industry is A $69000. Even with the exchange rate, the cost disadvantage of Australian automakers is even more pronounced.
As a result, Thailand is more profitable for automakers than Australia. Thailand has become the Southeast Asian Automobile Manufacturing Center and ASEAN's largest auto market. Each year, millions of brand-new vehicles manufactured in Thailand are transported from the South Rong A5 Terminal to more than 30 major ports in the world and transferred to more than 100 countries and regions. Australia has little advantage over manufacturers in car manufacturing.
In addition, Australia's taxpayers have paid a lot to preserve their own car manufacturing. A big part of the survival of Australia's auto industry is on goverment, which has spent a total of A $30 billion over the past 15 years to subsidize the car industry. However, whether in terms of budget considerations or the reasons for the competitiveness of the industry itself, goverment support for the industry is likely to be less and less.
What is the subsequent impact of the "end" of Australian car manufacturing?
One point that Volkswagen might be the first to focus on is the price of cars. However, car prices will not fluctuate very much in Australia, which is one of the key reasons for the closure of local car factories because of the low price competition in the Australian auto market. But some models made only in Australia are likely to disappear on the market.
The biggest shock comes from the employment of workers after the end of the industry. There are countless unemployed workers out of the closure of the car factory. How are these workers going to get back to work? Some depots said they would arrange for workers to "transform" to continue working in other parts of the company. There are also many workers re-training from car factories or goverment to re-enter new industries. However, many of these manufacturing workers also face the risk of long-term unemployment.
With the development of society and the changes of the times, the industry in the market will continue to "rise and fall", some industries may rise from the rise, and some industries will "end", Australia's auto industry is only a microcosm. With advances in artificial intelligence and machine automation, many industries and jobs are likely to face new challenges in the future, while practitioners need to keep an eye on the changes in new trends.
