Australia Stops Making Cars

October 23, 2017

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The automotive manufacturing industry Down Under is done. At least for now, Australia is finished with making cars at home. General Motors finished the last vehicle about a week ago at its Holden facility, ending what has been decades of moderately successful business.

“Moderately successful” because the manufacturer could not drum up enough demand for more expensive locally-manufactured automobiles. After 70 years in the car-making business, every new car purchased in Australia will be an import. Gone are the days of Australian factories needing motor trade insurance for their practice, as every new car in the country will be from elsewhere.

From a local manufacturing standpoint, Australia faced multiple challenges from the beginning. Relatively low demand, remote locations, competing against inexpensive manufacturing hubs in Asia, who have access to cheaper materials and newer technology. They can use high quality ruggedised computer products, like the products created by CKS Holdings. Individually, all of these factors made it difficult to make money manufacturing cars to sell in Australia. Taken together, the operation simply became untenable.

This day has been a long time coming. GM is only the last one to pull out. Ford was the first to announce it would be closing its plants. Then GM and Toyota. For the next few years, each company completed a full-scale drawdown of operations.

The closures mean thousands of lost Australian manufacturing jobs, and now autoworkers in other countries are wondering if they might be next. As the industry becomes more globally focused, with parts being manufactured across the globe for nearly every major brand, national pride is taking a backseat to economic realities.

And that’s not all that has manufacturing professionals worried. Automation is fast becoming the wave of “now” rather than the wave of the future. More and more facilities are increasing their automated manufacturing processes, leaving more and more workers out in the cold.

As in Australia, consumers may not like this change, but they don’t hate it enough to pay a lot more for their cars. People want the most quality for the cheapest price, and with all the new tech innovations in automobiles, that means getting things made as cheaply as possible … no matter where that may be.

There is absolutely no doubt the industry as a whole is at a major crossroads. With manufacturing changing drastically and demand ramping up in China and India, automakers are racing to grab up as much market share as they can.

Meanwhile, innovations in ridesharing and automated vehicles will change the consumer market dramatically in the next few decades. But it’s the short-term realities that are taxing the industry at the moment. Change is more than a byword. It’s an undeniable reality that will have to be addressed at every level of the industry. The motor industry, from the perspective of the customer, seems to be embracing car leasing which is something you may want to consider when it comes to your next car.

Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States