Industry analyst says Australian car industry is doomed
Clive Matthew-Wilson, editor of Australia's Dog & Lemon Guide, says there's no way around a central fact of Australian automobile production: "Australia's car factories are losing money on every vehicle they make." Because of that, he believes that there is no future for the domestic car industry Down Under, no matter how much money the government provides to keep factories open.
Matthew-Wilson further believes that General Motors' Holden division will be the first brand thrown into the abyss, trailed closely by Ford. The economics of Australian auto manufacturing, as far as he's concerned, simply don't make sense and GM and Ford's cash drain will force them to shut down their operations there.
''Globally, there's a glut of new cars at bargain prices," he says, "yet Australia, which produces a small number of high cost cars, is trying to compete with countries like China.... The Australian car industry can re-focus on small cars, green cars, blue cars or red cars. None of this will make the slightest difference."
For its part, Holden recently cut production nearly by half, and rumblings are that it, like Saab and Opel and HUMMER, it may soon be looking for a buyer.
[Source: Sydney Morning Herald via Carscoop]
Get a WordPress.com Blog
Reader Comments (Page 1 of 3)
garlinski 2:07PM (4/14/2009)
Get your G8's now!!! seriously... i saw a brand new G8 GT on cars.com recently for $22k...
Reply
Dan 2:50PM (4/14/2009)
22k for a G8 GT, seriously?
I just looked and the two cheapest GTs listed in the US are $25.2 and $25.5.
There are a couple V6 models listed at 22K, and one for $19,999. (Which I'd bet dollars to donuts was wrecked on a test drive and rebuilt or something similar.)
Alex Klein 10:25PM (4/14/2009)
I think people here in Canada are purchaseing G8's buy the ton becuase i used to see maybe one or two a week on the road and a few on the dealers lot but today I must have seen atleast 6 on the road. I love the G8 and it is on my list for my next car. I really hope Holden doesn't go "down under" because that would affect Pontiac's life also and I see alot of potenital in that GM brand.
KA 2:07PM (4/14/2009)
As much as I hate to say it, he's got a point. It's a GD shame.
Reply
TyWright 2:07PM (4/14/2009)
I think this guy is a pessimist about most things. Aussies have huge pride and their manufacturers make better cars with higher margins.
Oi! Oi! Oi!
Reply
MachinaDC5 2:07PM (4/14/2009)
Well Australian car industry, you had a good run. A damn good run. C'est la vie.
Reply
Lucas 2:10PM (4/14/2009)
Consolidation!
* Make Pontiac = Holden = Vauxhall= Opel
* Build cars in Mexico/Canada/Wherever
* Sell same model mix in ALL COUNTRIES!
Done.
Reply
XGM 6:39PM (4/14/2009)
Luckily there is a Holden Commodore kit for the G8's because that thing looks badass compared to the G8
ken_aisin 2:13PM (4/14/2009)
''Globally, there's a glut of new cars at bargain prices," he says, "yet Australia, which produces a small number of high cost cars, is trying to compete with countries like China.... "
If so, Ferrari and Porsche would have to fold too. Total nonsense.
A small company from a developed country doesn't have to make crappy toy cars to compete with Chinese and Indian automakers. There's always a market for small volume high performance vehicles with good profit margins.
Reply
Ken 2:16PM (4/14/2009)
Very true, they may struggle against the Chinese for small family cars, but they'll have the market cornered still for V8 and RWD and with GM finally using the chassis engineering they have in Austrailia in the US and other markets they do stand a better chance (as long as GM is still around to do this).
Kitko 3:12PM (4/14/2009)
Yes, because Porsche makes several million cars per year and competes at the same market as Opel Corsa....
ehisforadam 3:15PM (4/14/2009)
You seriously cannot be comparing Fords and Holdens to Porches and Ferraris.
Steve Lopez 2:23PM (4/14/2009)
Well, I am going to say I do believe in the industry and that they will come out of this big mess.
These are good cars and they will sell well once this nightmare is over.
Reply
Swede 2:28PM (4/14/2009)
Evidently Australian car companies will have financial difficulties if they only sell cars on the moon...
Reply
BrianFL 2:34PM (4/14/2009)
The worlds addiction to cheap products from China is going to be every other countries problem very soon. Wait until they start dumping cars at dirt cheap prices here in America. Even the Japanese will find it hard to compete. The majority of people in America really don't care where there car is made or how many Americans lose their jobs because of it. When the Japanese plants start closing because of China dumping cars over here at dirt cheap prices maybe people will notice then, but I doubt it. Hey its cheap to them, who cares right? If we want to keep a car industry here in America employing thousands of "American" workers we should mandate by lets say 2015 all cars sold in the USA must be built here or in Canada. If they don't then pay a huge $ 10 grand tarriff. Oh wait, thats not "fair trade", Ahem, excuse me, "free trade"
Reply
Sea Urchin 2:38PM (4/14/2009)
China is not a free market economy, i have long ago said that we need to tax their products. I support free trade with Japan, EU and others, but China obviously does not respect, trade, environmental and intellectual property.
reddy 2:58PM (4/14/2009)
@Sea Urchin
could not agree more. US is playing dumb having unbalanced free trade with china at the cost of american jobs.
and we all know how chinese blatantly ignore IP.
jgp 3:04PM (4/14/2009)
And a much more moral thing to do would be to completely eliminate the nation-state as an economic factor.
There are no such things as "domestic" or "foreign" cars. There are just cars made and sold by human beings. It's time to end this cancer on society known as "nationalism" and embrace the true future of pure, unadulterated consumerism without regard to artificial concepts such as borders.
Patrick 3:07PM (4/14/2009)
I'm not too worried about it. Half of the stupid people who buy Chinese cars will die in a fiery wreck either due to the car malfunctioning or due to it crumpling up beyond recognition after getting in an accident. Therefore, Darwinism will rule and the smarter people who did not buy those crappy cars will continue to live and breed and hopefully the world population will be just a little bit better off.
The Luigiian 3:11PM (4/14/2009)
Americans have largely been placated by the Japanese and Koreans because a large number of their products are assembled in the United States.
I am uncertain if Americans would be willing to buy from a company that manufactures exclusively in China, but I'm fairly certain they would assuming that cost is much, much cheaper.
I will tell you right now that older folks aren't going to buy the Chinese products that first come out. It'll be the new, younger generation, because today's vehicles are too expensive for them to afford. I've not yet seen a brand-new, well-done vehicle in the U.S. today that can be had for under $15K. Even good cars like the Fit retail for around $15K base, and that's for one with a manual. Many of the people I know in my generation can't even drive a manual in the first place.
CHAMCO was a wake-up call. There was no way it was going to succeed but their desire to bring a compact truck--with crew cab, at $13K, when most American crew-cab compact trucks retail for $20K base--that was a huge broadside. The Chinese expect that they're going to be able to convince Americans, Europeans and Australians to buy their vehicles at Third World prices, and if they succeed the rest of the world is going to cower.