Car industry in Australia is not dead but is dying. The combination of a historically high Australian dollar, the high cost base of local producers, and changing consumer trends had put local manufacturing under pressure.
China last year produced more than 18 million cars. Australia makes just over 250,000 a year. South Korea and Japan each produce millions of vehicles, all aimed at export markets.
Billion dollars Federal government put in and try to revive the car industry is totally waste.
This is another example of Global Industrial Shift.
Tread your own path. Make sure you board on the right bus.
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Australia risks auto collapse
Australia risks auto collapse
hm… didn't know Mitsubishi is not made in AU anymore (used to be a key point in their TV ads)… so it's now only Holdens, Fords and Camrys?… but still… apparently they are in high demand here… and still good value for money… on local AU market… maybe it will keep the industry alive for some while?…
hm… didn't know Mitsubishi is not made in AU anymore (used to be a key point in their TV ads)… so it's now only Holdens, Fords and Camrys?… but still… apparently they are in high demand here… and still good value for money… on local AU market… maybe it will keep the industry alive for some while?…
Local production vehicles are still good longterm value.
Plus Australia still has a relatively throbbing nationalistic spirit, which I expect still does affect purchasing decisions. As long as they don't just stick to making Commodore V8 petrol burners…
Local production vehicles are still good longterm value.
Plus Australia still has a relatively throbbing nationalistic spirit, which I expect still does affect purchasing decisions. As long as they don't just stick to making Commodore V8 petrol burners…
With U.S. Reserve Bank keeps interest rate between 0% to 0.25% till the end of year 2014, it's unlikely Aussie dollar will soon back to its historical average and its true value, i.e., 80 U.S. cent. So it's hard for local car manufacturers which target is oversea market.
Mind you, no industry protected from market competition by a financial great wall set up by the government around will perform at its best.
Resulting in unnecessarily make Aussies paid their houses, cars and other industry goods local made in high price.
With U.S. Reserve Bank keeps interest rate between 0% to 0.25% till the end of year 2014, it's unlikely Aussie dollar will soon back to its historical average and its true value, i.e., 80 U.S. cent. So it's hard for local car manufacturers which target is oversea market.
Mind you, no industry protected from market competition by a financial great wall set up by the government around will perform at its best.
Resulting in unnecessarily make Aussies paid their houses, cars and other industry goods local made in high price.
I think a point was well made however this if the current state of the dollar goes backward (some people are tipping a recession), then it would be a bad thing to have lost our local manufacturing industry. I'm of two minds whether what the government is doing is a good thing. Those older and wiser who have seen this sort of action before may have a more informed opinion.
I think a point was well made however this if the current state of the dollar goes backward (some people are tipping a recession), then it would be a bad thing to have lost our local manufacturing industry. I'm of two minds whether what the government is doing is a good thing. Those older and wiser who have seen this sort of action before may have a more informed opinion.
maybe a good idea would be to make more expensive and more "high-end" cars… like certain European makes./models… ??
to make it less "volatile" and more worth it…
maybe a good idea would be to make more expensive and more "high-end" cars… like certain European makes./models… ??
to make it less "volatile" and more worth it…
Kennett is spot on. What does the industry have to show after $3bn worth of innovation funding? The currency issue is a flimsy excuse. These guys struggle to compete with imports even when the Aussie is weak. What has kept them going thus far has been local love of gas guzzlers, misplaced nationalism and my tax dollars. This is all changing.
Schumpeter's creative destruction needs to take place. Inefficient manufacturers need to die and respawn with faster and more nimble business models. It's no small coincidence that Tesla Motors was born in Silicon Valley and not Detroit.
The $3bn would be better spent retraining those engineers who have lost their jobs.
Kennett is spot on. What does the industry have to show after $3bn worth of innovation funding? The currency issue is a flimsy excuse. These guys struggle to compete with imports even when the Aussie is weak. What has kept them going thus far has been local love of gas guzzlers, misplaced nationalism and my tax dollars. This is all changing.
Schumpeter's creative destruction needs to take place. Inefficient manufacturers need to die and respawn with faster and more nimble business models. It's no small coincidence that Tesla Motors was born in Silicon Valley and not Detroit.
The $3bn would be better spent retraining those engineers who have lost their jobs.
+James Gemmell they may end up as "software engineers"!!
+James Gemmell they may end up as "software engineers"!!
Big thumb up for Mr. J's creative destruction theory.
NYTimes has article about once tech gadgets that seemed indispensable have been mercilessly superseded over the years – http://www.nytimes.com/2012/01/29/business/blackberry-aiming-to-avoid-the-hall-of-fallen-giants.html
This including Polaroid instant cameras have disappeared almost completely with the spread of digital photography; Sony Walkman by entering of Apple and iPod; Palm Pilot by iPhone and Android; Atari by Nintendo, PlayStation and Xbox.
Same theory also applied to Australian car industry. Let's it die or die earlier maybe better for the country.
Like TV, refrigerator, PC, car is more like commodity you can buy in supermarket than a "high-end" product today. And "high-end" product doesn't guarantee mass production and profitable. Volkswagen made more money than BMW, Mercedes because it make affordable cars for Average Joes.
Anyway, every tax payers should ask how their money spent by pollies.
Big thumb up for Mr. J's creative destruction theory.
NYTimes has article about once tech gadgets that seemed indispensable have been mercilessly superseded over the years – http://www.nytimes.com/2012/01/29/business/blackberry-aiming-to-avoid-the-hall-of-fallen-giants.html
This including Polaroid instant cameras have disappeared almost completely with the spread of digital photography; Sony Walkman by entering of Apple and iPod; Palm Pilot by iPhone and Android; Atari by Nintendo, PlayStation and Xbox.
Same theory also applied to Australian car industry. Let's it die or die earlier maybe better for the country.
Like TV, refrigerator, PC, car is more like commodity you can buy in supermarket than a "high-end" product today. And "high-end" product doesn't guarantee mass production and profitable. Volkswagen made more money than BMW, Mercedes because it make affordable cars for Average Joes.
Anyway, every tax payers should ask how their money spent by pollies.
The economic arguments against industry subsidy are well known and well understood. They reward poor business practice, perpetuate reliance on handouts, waste valuable revenue on economically unviable projects, and prevent important structural adjustment.
But putting the economic arguments aside, policymakers and politicians should expect that after receiving assistance for half a century, employees not only grow dependent on handouts but begin to feel entitled. When subsidies are continually renewed, it is not hard to see why employees hold the government responsible for their employment circumstances rather than themselves.
http://cis.org.au/publications/ideasthecentre/article/3907-car-industry-handouts-are-childish-?utm_medium=twitter&utm_source=twitterfeed
The economic arguments against industry subsidy are well known and well understood. They reward poor business practice, perpetuate reliance on handouts, waste valuable revenue on economically unviable projects, and prevent important structural adjustment.
But putting the economic arguments aside, policymakers and politicians should expect that after receiving assistance for half a century, employees not only grow dependent on handouts but begin to feel entitled. When subsidies are continually renewed, it is not hard to see why employees hold the government responsible for their employment circumstances rather than themselves.
http://cis.org.au/publications/ideasthecentre/article/3907-car-industry-handouts-are-childish-?utm_medium=twitter&utm_source=twitterfeed