Does Australia care about having a car industry? Nah

Premium content

To access premium content, please log in or set up a subscription. It's quick and easy.

Connect with Alan Kohler on Google+

More from Business Spectator


Please login or register to post comments

Comments Policy »

It would be interesting to know what percentage of SPC, or Holden, or Ford, or Toyota’s costs are wages ?
Would lower wages make a significant difference to their viability ?.

Exactly the way I feel Alan. Who cares ?

Always was going to end in tears. Making an expensive product in low volumes no one wants in an open market is the path to going broke.

We should also not forget that there is a $13000 tax on imported second-hand cars introduced presumably to protect the local car manufacturers. As there will no longer be a case to retain this tax at least for its original purpose it abolition would allow such cars to be imported and hence put price pressure on new cars. New Zealand has done this.

Surely it would be sensible of us to assure that we have useful ways of earning our way in the world by developing skills and expertise in producing things of value to others? And surely production of vehicles (given our shabby public transport infrastructure), canned goods, energy, food and so on are sensible strategic industries in which the capacity to be more self-sufficient could be of great use to us?

Yet gradually our governments are making us more fragile (less robust), now cutting education spending to further limit our potential in the growing 'knowledge economy'. Who is driving the bus? Overseas interests?

I think you are right Mike about overseas interests. But maybe more about building an international system. Like a DVD, we are sort of 'Region 4' rather than a traditional nation.

Well I care, because as an industry there is a lot of investment in its infrastructure and systems that in three years time will all be wasted. Many millions down the drain hole and the cascading impact of this will be immense. While recognising that, I am not in favour of subsidies that do not have strict performance goals associated with them. The old trick of a government dollar being churned to cover increased costs, should have disappeared back in the Hawk Keating era. But no. What we have is a cost plus approach in a market economy. Economics tells us subsidies create inefficiencies and we can see them writ large across this failed industry.

I'm one of those "curiosities", and for no reason other than the local product was easily the best fit for my needs (and wants) at a price point...a decision made much easier by my previous car (a so-called premium import) that was far from reliable and therefore very borderline on the safety front. I for one will be very sad to see the local vehicles go.
Once we eventually discover (too late) that digging up rocks and sending them overseas does not make for a diversified or robust economy, maybe others will be sad too.

The federal government may have denied SPC Ardmona a $25 million assistance package but shoppers have pulled out their wallets to support the fruit-packing company.

Managing director Peter Kelly said sales over the past week had increased by "more than 50 per cent", helped in part by a social media campaign that encouraged Australians to buy the company's products and share pictures of them online.

“The Shepparton community and our workers have been overwhelmed by this amazing support and have expressed their heartfelt thanks to everyone who has been involved,” Mr Kelly said.

“This has been an incredible example of the power of social media in giving people the opportunity to rally behind something in which they believe.”


Read more:

With all the publicity it was probably predictable that there would be a bit of a short-term surge in SPC sales Vasso - but I can assure you that it won't last. Anyone who has worked in small business knows first-hand that customer loyalty is ephemeral and in the end will flow like water under the influence of gravity to the lowest price - assuming of course that the product is even wanted in the first place.

Alan - should the question not be "SHOULD" Australians care about having a car industry? A quality piece showing considered arguments for and against, plus statistics on subsidies provided and tariffs levied in Australia and all the other car producing nations might enable a fact based debate. Perhaps such a piece exists?

Forget all the statistics Peter - customers don't use them when making a decision to buy any product. Most people make an instinctive and subjective decision when buying any product on four main factors - fit-for-the purpose, price, quality, and availability. Are you prepared to forgo $40,000 of your hard-earned savings in order to be able to pay $60,000 for a car that can be purchased overseas for only $20,000 - just so that a tiny part of the workforce can continue to do what they have always been doing? Why should the mums and dads on Struggle Street be forced to subsidise salaries and working conditions which greatly exceed their own? Where is the social justice in that? There is only one reason that justifies the public subsidy of a specialist industry, and that is to assure the nation's defence capability - but in the case of the current car manufacturing set-up that is not a consideration. The shut-down of car manufacturing and the removal of the tariffs and other protective devices that currently support it will inevitably lead to a small to moderate fall in the price of cars, and the money "saved" by car purchasers will then be available to be spent in other parts of the economy. Jobs will eventually flow to reflect that movement.

People stopped buying Falcons and Commodores because they could get a perfectly adequate car for $10,000 less. If you went back 30 years, you needed to buy a 6 cylinder engine car in order to get enough power. Today's equivalent Falcon or commodore costs you $36,000. Trouble is, you can walk down the street and buy a Toyota Camry or Honda Accord or several others for about $26,000. Sure the Camry / Accord etc have 4 cylinder engines but who cares. Power is more than adequate. Unless you are a rev head, you just don't need a 6 cylinder car for another $10,000.

Fair comment re the Camry (can be had for $27K driveaway) but with a Falcon G6 actually priced less (by a few hundred) than a base Accord VTi the comparison here is less valid...and becomes murkier still once you drive them back-to-back. But to each their own, and the roads full of SUVs and hatchbacks suggest that what the locals have been building (mid-large sedans in the main) haven't been what the market is looking for.

I am interested that nobody mentions the added burden of the manufacturing cost created by the carbon tax. My power bills have doubled so what has been the increase in energy costs for the car industry??

Whatever one may think about the relative merit of making cars in Australia, cars and tinned fruit are not comparable. Cars aren't being dumped on Australia. Tinned fruit is being dumped. Even GERMANY is dumping tinned fruit on Australia. Anyone who says that this is a level playing field is either ignorant of this simple fact or is a propagandist from a dumping nation! (I am not a farmer or representative of the fruit growers or workers).

I notice that Toyota Australia CEO Akio Toyoda has described to a business group how having explained to the workforce two years ago what was required to stay in business and having given a substantial pay rise it so happened that shortly afterwards Australia Day fell on a Thursday.On the Friday 30 percent of the workforce called in sick.At that point he realised that the business had no hope of surviving in Australia.Never the less Toyota soldiered on but having asked to place proposed changes before the workers for them to vote in order to increase efficiency the union response was to go to court to block such a vote happening.The Japanese are patient and polite people but faced with that attitude they gave up on Australia.It does seem that the union and the Toyota workers did not really want their jobs badly but as a result havoc will be unleashed on the parts suppliers with thin orders to ensure that there is absolutely no dead stock when the plants close.

People will still have break down and prangs so there will still be demand for parts for as far as I can forsee. The Holden and fords will still be sold here...just not made here. A lot of hysterical nonsense being spoken if you ask me. I am looking forward to the price of cars falling.