Toyota Holden will stop production for 100 years How did the Australian auto manufacturing industry cross?

In less than a month, Australia will completely lose its own auto assembly industry.

In October 2016, Ford had operated in Australia for 91 years and closed its factories in Broadmeadows and Geelong. After that, there were two remaining three major auto manufacturers in Australia. A year later, the two companies will also withdraw from Australia.

Toyota plans to close its Camry plant in Altona, South Australia, on October 3. General Motors plans to close its Holden plant in Elizabeth, South Australia on October 20.

Three major car manufacturers lead the century

Stephen Anthony, chief economist at Industry Super Australia, said: “For those of us who grew up thinking that Australians can design and build world-class cars smart enough, the end of the industry is a shameful loss.”

Ford, Toyota, Holden, the three automotive brands have a long history in Australia, they not only contributed to the Australian economic construction, but also wrote a glorious history in the history of Australian manufacturing.

Since 1925, Australia’s earliest car manufacturer, Ford, has produced nearly 6 million cars.

Commonly used to make cars in Melbourne Port in 1936, assembling parts imported from the United Kingdom and the United States. Afterwards, GM manufactured aircraft engines, armored vehicles and weapons and equipment at its Australian factory to support the participation of the Australian military in the Second World War.

Until 1948, Holden first produced cars and engines that were produced in Australia. When the first Holden sedan was delivered, Australian Prime Minister Ben Chillley praised “She is a Beauty”.

During that time, Horton produced more than 10 million engines in Australia. At the end of the year, Horton produced more than 7 million cars.

Although Toyota is a Japanese brand, it has been producing cars in Australia since 1963. In the same year, GM released the iconic model EH Holden in Australia.

For the past ten years, Toyota has been Australia’s largest automaker and Australia’s largest auto exporter. And Australia is Toyota's first overseas production site outside of Japan, which is why, despite difficulties, Toyota has been trying hard to maintain Altona’s Camry plant operations for so many years.

Over the past few decades, the Australian automotive industry has hired several generations of employees until, at the end, the number of people employed in this industry has remained at around 50,000. This figure includes the small companies that make related parts and services in the industry chain.

To compensate for the unemployment rate, the federal government plans to build a French submarine in South Australia, which can create 4,000 to 5,000 jobs, but Anthony pointed out that the relevant costs may be ten times the previous subsidies to the auto industry.

In order to retain the country’s auto manufacturing industry, taxpayers pay a huge sum. In the past ten years alone, industry subsidies have reached more than five billion yuan. In 2012-13, the federal government supported the auto industry through a series of assistance measures, amounting to 990 million yuan. According to the Reserve Bank of Australia's lower limit, the major interest banks in Australia have received at least 1.9 billion yuan in implicit interest rate subsidies.

However, this is ultimately an unsustainable game. Over the past decade, due to low import tariffs or zero import tariffs, the Australian market is flooded with imported cars that are much cheaper than local models. Imported cars are either cheaper or have higher configurations, or both.

Imported cars erode large chunks of market share, and the survival of local automakers has become unsustainable.

The impact of external shocks, 20 billion yuan subsidy can not be retired

In Elizabeth on the outskirts of Adelaide, the Horton assembly line will produce the Commodore model until October 20. In October 2016, Holden delivered the last Cruz small-sized car Falcon, and then he took the road to cut production.

15 years ago, Holden's Commodore sold nearly 100,000 units a year. However, it faces great competitive pressures. In the past six years, the annual sales of small vehicles such as the Mazda 3 and Toyota Corolla have reached 40,000 units. Last year, Toyota HiLuxute led the market with a similar amount.

No car manufacturer in the world can survive in such a small quantity, except for the very expensive supercars like Ferrari or Lamborghini.

The influx of imported cars into the Australian market has given Australian car buyers more options than ever before. In addition to China, Australian consumers have more choices than any other country in the world. There are 64 car brands in Australia, 38 in the United States and 42 in the United Kingdom.

Australian consumers are indeed "spoiled." The auto market in Australia is becoming more and more discrete. When local automakers cannot rely on domestic sales alone, they also rarely have a way out.

Compared with Australia, the cost of labor in developing countries is much cheaper, and this alone has enough lethality. The minimum wage in Thailand is equivalent to less than AUD 2 per hour. The income of Thai auto assembly line workers is relatively high, but only AUD 6 per hour and the annual income is about AUD 12,500. The Australian automotive industry's average salary is 69,000 Australian dollars. Recounting the exchange rate, the cost disadvantages of Australian automakers are even more pronounced.

Among the top three auto makers, only Toyota uses its most advanced Altona plant to efficiently produce Camry and Aurion, and exports most of them. The other two American car manufacturers have never been committed to exporting cars from Australia. Horton arranged only two shifts for Elizabeth's factory production, which produced about 145,000 units a year, which is 1.5% of GM's global production.

However, GM needs to export most of its Holden cars if it invests in full capacity, but GM does not have this intention. From a general perspective, Horton's problem is that if the production quota is allocated to other regions, the same investment can get more profits.

This is why the Australian automotive industry has long needed government subsidies. In the post-tariff era, in order to leave foreign automakers in Australia, taxpayers only kept paying for them.

The Productivity Commission estimates that in the past 30 years, Australian taxpayers have spent about 20 billion yuan to subsidize the auto industry, which is enough to directly acquire some world-renowned car companies.

Cruel trade agreement

ACB News “Australia Finance Online” reported that some observers pointed out that in all free trade agreements between Australia and other countries, the trade agreement with Thailand in 2005 was the most cruel and sloppy one.

Australia agreed to cancel the import tariffs on cars from Thailand and completely opened the door. Since then, Australia has imported nearly 2 million cars from Thailand, including Ford, Holden and Toyota, three locally owned brands in Australia, as well as other famous brands such as Honda, Nissan, Mitsubishi, Mazda and others.

However, since Thailand has retained hidden non-tariff barriers, and Toyota already has a Camry plant in Thailand, there is no need to export any cars there. Only 100 cars are exported from Australia to Thailand. Yes, not 100,000 cars, but 100 cars.

And, Thailand continues to impose higher tariffs on cars with larger engines, such as those made by Ford and Holden.

Ten years after this free trade agreement was signed, Australia’s entire automobile manufacturing industry came to an end, and 50,000 jobs disappeared. These jobs have been transferred to Thailand, which is known as "Asia Pacific Detroit."

Now Thailand has become the second largest country of origin in the Australian automotive market, ahead of Japan and ahead of South Korea.

Critics say that Australia is the only country in the world that makes cars but does not provide some form of protection for the local car manufacturing industry.

The gap after the withdrawal of "Australia production"

When counting the disappearing social costs of the entire industry, car consumers may be most interested in knowing how the car price will change.

The answer may be that the new car price will not suddenly rise. Australia is the most competitive automobile market in the world and it has a low price. This is also one of the key reasons for the closure of local auto plants.

Wait until the last local car line is closed, Australians can still continue to have a lot of brands and car models. In addition to one point: There are no Ford and Holden models, leaving a regrettable and difficult to fill market gap.

There are no substitutes for the Holden Commodore V8s, or Ford Falcons with supercharged V8 power and turbocharged six-cylinder power. This is the fastest and most powerful car in the world with the same price.

Historically, Ford and Holden sold a large number of fleet cars, so that they have the ability to install larger engines, larger brakes and wider tires to attract fans. Unfortunately, the market share of these models is not high, and it is not worthwhile for manufacturers to invest in these unique performance models.

This is why all Australian highway patrols are mad - their Ford Falcons and Holden Commodore chase vehicles do not have suitable alternatives.

Ford Mustang is the best candidate for performance and price. From the late 1970s to the early 1980s, Australian police opened a two-door coupe. If Ford Mustang passes the test, the police may return to the era of the two-door coupe.

In Queensland, the police have announced that they are using Hyundais. Many people question whether this car's performance is suitable for a police car. At the same time, police officers in general positions will use SUVs such as Toyota Camry and Hyundai Santa Fe. The vehicle for escorting prisoners is still Volkswagen Transporter or Modern iLoad.

Unemployment Shockwave

The topics that were once heatedly debated in many media in Australia are: Should we retain the Australian auto industry or end the support of taxpayers and allow them to become extinct?

Those who hold the view of "preserving the domestic automobile industry" questioned how many workers who have come out of automobile production plants will be able to get new jobs in accommodation, tourism, IT or other "innovative" industries as advocated by the government?

A report written by Associate Professor John Pibor of the University of Adelaide in 2013 estimated that one-third of the blue-collar workers who were fired may become long-term unemployed. These statistics were collected from other related industries after the closure of the Mitsubishi Motors plant in Adelaide in 2008.

“We learned from the study that a large proportion of manufacturing practitioners are long-term unemployed,” said Professor Pibor. “They need a lot of retraining to work in other industries.”

As former Victorian Governor Jeff Kennet said, with the closure of manufacturing companies, the “mature age” unemployment rate has also risen. “These people are usually breadwinners with good personal values. They have been paying taxes and paying for years.” Kenny traced.

At the Horton plant in northern Adelaide, 950 employees are still working. A month later, the factory will be closed, but many others cannot find other jobs.

A Horton spokesman said that since the announcement of withdrawal from Australia in December 2013, about 800 employees had "transitioned" from the factory. Of these workers, 71% find jobs, 8% have retired, 4% are full-time students, and 1% are full-time volunteers.

About 200 people started to contact new jobs in advance. Horton said he continues to assist employees in finding new jobs.

The official estimate of the Ministry of Employment is that due to the disappearance of the local auto industry, Australia will lose 27,500 manufacturing jobs in the five years to November 2020.

Lance Worrall and John Spoehr, researchers at the University of Adelaide, believe that in addition to the direct impact on automotive assembly plants and parts manufacturing plants, the impact on all relevant industries in the industry chain will also be considered, and a total of 200,000 jobs will be destroyed. . Using the employment multiplier, Australia’s gross domestic product could therefore be reduced by 29 billion yuan.