Ford/Holden/Toyota all pulling out manufacturing in Australia in 2016/2017. How will the car price be affected?

scotty on 11/02/2014 - 10:13

The big news yesterday ought to be Toyota's decision to quit car manufacturing in Australia (rather than someone being released on parole in Bali). That's the last of 3 big car manufacturers making the announcement, after Ford last May and Holden last December.

Whose fault is this? Should government do more? Is manufacturing substantial in the first place? How is it going to affect the economy? Or maybe it's a good thing? A lot is up to debate, but as it's OzBargain and I would like to know — how are all these affecting the new car and second hand car price in Australia, between now and 2017 and after 2017?

Automotive

Comments

  • Binxx on 11/02/2014 - 10:29
    +9

    Could not agree more what the headline should be Scotty. As for the car industry, billions of dollars have been poured in it, surely the same money can be used in other industries to create jobs. We cannot manufacture economically so how long will the industry be able to sustain? It was inevitable. As for prices, I believe they will come down as the government has no reason to slug imported cars with taxes under the pretext of shielding local manufacturing.

    • scotty on 11/02/2014 - 11:02
      +2

      government has no reason to slug imported cars with taxes under the pretext of shielding local manufacturing

      While that's true, government is still in deficit so it makes sense for them to hold onto any revenue for as long as they can.

      • ferguscan on 11/02/2014 - 22:16

        Or, you know, reduce spending.

      • Cyb3rGlitch on 12/02/2014 - 04:44
        +10

        Why? Our debt is tiny and assists in keeping the dollar low to increase exports. Having a surplus sounds great but it doesn't mean a whole lot in a world that trades debt. It is in our best interest to invest in industry and infrastructure (such as the NBN) than it is to go back to surplus. Everyone likes to bash Labor, but they didn't put us in the bad spot the Coalition likes us to think (and no, I don't vote Labor). It's sensible to take on debt to invest in long term prospects.

        The key question here is whether the Coalition know where to invest the money.

        • _Bruce_ on 12/02/2014 - 07:00
          -1

          While I agree with your debt comments, I don't agree that removing the tariff is a good idea, I don't see how it will help anything.

        • scotty on 12/02/2014 - 08:40
          +1

          Well. I was only soaking from the current government point of view. Agree that debt isn't always bad thing. However for them it's like "free money, why not?" with the extra tax…

        • [Deactivated] on 12/02/2014 - 15:03

          @Cyberglitch
          People who can't afford to get a car and go to work now can?

        • Serapis on 12/02/2014 - 22:33
          +2

          If you can't afford an el cheapo $6000 second hand car along with all other costs (vehicle inspections, rego, greenslip, etc), then you're probably being underpaid…

          I find the cost of petrol to be a far bigger problem than the prices of cars in Australia

        • hahaboy on 13/02/2014 - 00:45

          Why do you say that? If there is nothing produced in Australia, why should people pay insane prices for prices? It's unjustified and not protecting anyone. Simply lining the pockets of government with revenue.

        • _Bruce_ on 13/02/2014 - 06:44
          +1

          Simply lining the pockets of government with revenue.

          Damn the government and their money! Who needs roads/education/healthcare/police/welfare anyway.

      • nikey2k27 on 12/02/2014 - 07:12

        slug on imported cars was help local give our money back.

  • tonyjzx on 11/02/2014 - 11:04
    +4

    the productivity commission has recommended removing all barriers including the LCT and allowing all imports like New Zealand

    however the govt. wont not refuse to take free money so nothing will change

    the reality is that we can all do with commodores falcons camrys and territorys so the removal of these or the replacement of locally built ones with imported Cruzes or Camrys is really no big deal

  • retiredfeline on 11/02/2014 - 11:05
    +1

    I doubt if it will have any effect on the prices. There are many car manufacturers in the world supplying this market and Toyota will have to compete against the other imports so they can't raise prices. If anything it will be cheaper for Toyota to manufacture elsewhere.

  • pao2x on 11/02/2014 - 11:06

    I do not think car prices will be affected. Aside from the models in question.

  • _Bruce_ on 11/02/2014 - 11:09
    +4

    Can't see prices changing much, can see huge recession in Victoria.

    Not saying the government should have kept them manufacturers here (I don't have the full information on the ecomony available), but I do think that managing the transistion so that all three and all of their suppliers dont close their doors at the same time would have been a great idea.

    Prediction: In 2017 the job market will be unlike any I have experienced in my life time.

    • ESEMCE on 11/02/2014 - 11:34

      I agree, but I don't know how they were supposed to manage a smooth shutdown..

      If anything, the job market is likely to be worse in the coming 2 years than it will be in 2017. I imagine the young people currently employed throughout the industry would be looking to jump ship (it's what I'd be doing), wheras the old timers will stay on to get their Golden Handshake before retiring.

      • _Bruce_ on 11/02/2014 - 12:14
        +3

        Don't underestimate people's ability to stick their head in the sand. Or try, but not hard enough until they are really out of a job.

    • akula on 11/02/2014 - 22:42
      +3

      Yet there the real estate prices have jumped 13.8% :( How come a country can have a worsening job market but booming real estate.

      I am scared to buy a house because a decent house in decent suburb is unaffordable and what if i loose my job as you predicted..although i am positive that this won't happen to me as i am in health care sector.

      Car prices least worry me but i understand that it's about manufacturing and ultimately about the whole economy.

      …just winging

      • SupeNintendoChalmers on 11/02/2014 - 23:30
        +1

        Asian "investors"

        • _Bruce_ on 12/02/2014 - 07:01
          +3

          Insulting "quotation"

        • SupeNintendoChalmers on 12/02/2014 - 11:58
          +2

          Its true though. Its basically a bribe to get PR in Australia…. it keeps the wheels oiled I guess, at the expense of our younger generation.

        • _Bruce_ on 12/02/2014 - 12:46
          -1

          It is possible you haven't been to a country with real bribery and corruption.

        • SupeNintendoChalmers on 12/02/2014 - 14:00

          I was born in a country with real bribery and corruption. Plus if you pissed the wrong official off you'd "dissappear"

          I said the words 'basically a bribe', but I'm sure our officials use more civil language.

        • Serapis on 12/02/2014 - 22:43
          +1

          This is a misconception, you need to buy PR into Australia by Business Migration rather than just buying a property (i.e start a business / buy a business in Australia). This has the effect of creating jobs.

          The only other way is to have professional skills which are in demand. You can't just buy PR in Australia by buying a house…

          Naturally this attracts business people who would often see property investment as a stable / secure investment and in turn they buy houses.

        • Mumbles on 13/02/2014 - 13:26
          +2

          There is no data available to support your suggestion that foreign investors are the major cause of house prices.

          The Foreign Investment Review Board even hides its statistics from Freedom of Information Requests regarding foreign investment purchases of real estate:
          http://www.macrobusiness.com.au/2013/10/are-foreign-investor…

          Foreign investors come from all over the globe. Perhaps you'd be more surprised at the proportion from corporate and private investments out of USA, UK, New Zealand …

    • Serapis on 12/02/2014 - 22:37

      They did but the government changed and screwed things over by keeping the subsidies… the transition was supposed to be gradual from 2002 to 2015

  • tonyjzx on 11/02/2014 - 11:11

    yep 100,000+ out of work, abbott could well be a one term PM not due to any fault of his own

    he has his job cut out

    • _Bruce_ on 11/02/2014 - 11:15
      +3

      abbott could well be a one term PM not due to any fault of his own

      While this is a factor, there would be plenty of his own fault contributing, this alone would not lose him the election (particularly outside of Vic/SA).

      Also, the one mistake he did make (on this issue) is to publically challenge GM to leave. I'm sure this made no difference to their actions, other than giving them a perfect opportunity to make their announcement and divert blame, so it was a pretty terrible PR move by Abbott.

      • ESEMCE on 11/02/2014 - 11:36
        +7

        it was a pretty terrible PR move by Abbott.

        If there's one thing our current PM is good at it's terrible PR moves!

        I agree that Labor was also heading down this path, but they would have made at least a vague attempt at making the landing softer..

        • hahaboy on 13/02/2014 - 00:49

          That explains his lack of press-conferences in the media and bashing of ABC news. He can't string two sentences together, so currently in hiding and bullying local media that is actually objective with news etc.

    • DrStinge on 11/02/2014 - 11:36
      +3

      The areas most affected were already predominantly union heavy Labor supporters

  • scotty on 11/02/2014 - 11:24

    What about parts of those family cars that are manufactured locally? Recently trying to source a tail-light for my Korean car and it's pretty expensive locally (comparing to locally-sourced tail-light for Falcon, Commodore and Camry) and I ended up having to order one from the States which would take 3 weeks to arrive.

    Car manufacturing pulling out -> parts no longer manufactured locally -> increased cost of repair -> would that make insurance a bit more expensive?

    Or maybe the majority of parts aren't manufactured in Australia in the first place?

    • _Bruce_ on 11/02/2014 - 12:13

      Or maybe the majority of parts aren't manufactured in Australia in the first place?

      This. For spares it is handled differently, a few factories in the world will manufacture high volumes of one particular product for the whole world.

      So in Australia we manufacture spares than are mostly export, then most of the spares for our own cars are manufactured overseas, as higher production volume makes more sense.

    • Cluster on 11/02/2014 - 14:03
      +2

      A friend works at an Australian company that is almost solely reliant on producing one component for Ford trucks in the USA. Yes, we do export components overseas. The problem is when the contract is up for renewal Ford is quite likely to source the parts from a non Australian company as we just don't have the economies of scale any more.

      If things continue like this we'll end up with an economy based on making lattes and selling used houses to one another.

      • _Bruce_ on 11/02/2014 - 14:08

        At least they will have lots of people willing to work for them right up until they close!

      • ankor on 11/02/2014 - 23:07

        Considering the failure rate of cafes in the first 18months, highly doubtful.

    • realitybites on 13/02/2014 - 09:59
      -1

      When the local suppliers fail, unique parts for Commodore/Falcon/Territory will dry up. Camry and Cruze owners won't notice any change as the parts will be brought in from where they are still made.

  • jace88 on 11/02/2014 - 11:34

    I'm inclined to think it'll push down the price of the new and uncleared inventory/stock on hand closer to 2017 because without local manufacturer support, future parts availability and pricing becomes riskier (and hence future cost of ownership). This then in turn pushes down value of used car values.

    • ESEMCE on 11/02/2014 - 11:39

      Manufacturers are required by law to provide 10 years of parts availability.
      Used prices on Falcons/Commodores will drop a bit, but not by much, Camry prices shouldn't hurt much at all, cause Toyota will likely import the same vehicle, unless they slash the price on the imported models (which is possible given the lower manufacture cost)

      • tonyjzx on 11/02/2014 - 12:29

        i would disagree to some extent

        i like high performance rwd cars

        if you discontinue them, surely people will clamour for what is a fixed supply?

        on 6 cyl. auto cars, yeah i think these are worth nothing anyway

        on V8s and turbos? could be some demand there

        • _Bruce_ on 11/02/2014 - 12:36
          +1

          Not that fixed, the Australian market (particularly just for V8/V6 Turbo) is tiny in a global sense, it will hardly impact supply at all.

          Of course they might charge more in this segment just because they can. Or they might charge less as different brands try to claim the gap left.

        • tonyjzx on 11/02/2014 - 12:47

          you dont seem to understand

          after 2017, there will be no more high performance rwd cars from Holden or Ford

          therefore the pool of these cars will be fixed after that point

          the only cars like this available will be $100k+ german saloons… this will not be a realistic option for many people

          after 2017 i expect the fwd Ford Mondeo and Holden Malibu or Impala to take there place. This is not an acceptable option to me and many enthusiasts.

        • _Bruce_ on 11/02/2014 - 12:52
          +4

          the only cars like this available will be $100k+ german saloons… this will not be a realistic option for many people

          This is that bit where we disagree. There are tons of (mostly US) cars in this market segment, but most aren't sold here as they would have to compete with an already over saturated market. Ford and GM will just sell their internationally built alternatives instead.

          If you are saying that there are a lot of people who will only buy a Commadore specifically that makes more sense. Even here though, plummetting sales figures suggest they aren't in a hurry to get one before manufacturing stops.

        • tonyjzx on 11/02/2014 - 12:55

          Ford and GM actually do not have rwd platforms that are available in rhd format that they can 'readily sell here'… if they did, why would they export Commmdores to the US in the first place?

          if you know what they are, name them, i'd be interested, if only on a purely academic level

          IMO the chances of seeing American rhd Chevys and Fords here is very slim

        • 2jzzzz on 11/02/2014 - 13:13
          +2

          Wouldn't take much for the Mustang to be sold here.

          Then there are the Camaros, dodges etc etc. Can see the Toyota and Nissans taking over the RWD performance sector. I see this already. Long live the 2J Aristo!

        • _Bruce_ on 11/02/2014 - 13:14
          +1

          why would they export Commmdores to the US in the first place?

          It competes directly with their US offerings, but they sell them as a premium product, because frankly the US built cars set a low bar. But mostly it is about market differentiation.

          if you know what they are, name them, i'd be interested, if only on a purely academic level

          Don't know if there are any ready to go, but it would be market size that stops them (ie: they won't actually sell any) mostly.

          MO the chances of seeing American rhd Chevys and Fords here is very slim

          http://www.motorauthority.com/news/1071924_cadillac-to-expan…

          Of course you could always 'slum' it with an AWD, but what 'enthusiast' wants to keep their car straight?

        • tonyjzx on 11/02/2014 - 13:17

          also the market loves CUVs and hatches

          the Mondeo has been out for years and it really sells stuff all

          i'm of the opinion it will continue to sell "stuff all" even with the removal of the Falcon

          no one will replace the large rwd sedans with anything because the market is marginal as it is and really, the place for lower priced rwd platforms is largely over… dealers will direct these people to alternatives like fwd medium sedans

          Cadillac do make some medium to large sized RWD platforms but none are rhd and they are too high priced anyway

        • tonyjzx on 11/02/2014 - 13:31

          bruce, what you dont seem to understand is that the US are not export oriented

          this has been brought to my attention almost 25 yrs ago when Australia sold 5,000 of one model and yet the sold 500,000 in the US… Australia is just too small to care about

          you say there are 'tons of US' models and yet you produce a 2 year old link?

          would it surprise you to know Australians designed the Camaro and yet they dont even care enough to sell it here (not that I care either, its a pile of shit)

          I'll say again, the chances of see Cadillacs rebadged as Holdens or even as Cadillacs here after 2017 is NIL. I'll bet on it.

          Ford has no rwd platforms besides the Mustang and its no Falcon replacement anyway.

          Dodge surprisingly does have 2 platforms, the Charger and the 300c but its a single digit monthly anyway. Challenger thing wont come awesome though that it is.

        • jzx100 on 11/02/2014 - 14:19

          After Driving a Aurion (2012) & Corolla (2008) (Yes I only drive Toyota's) I had to jump ship and purchase a Toyota Chaser again. Like the 2JZ Aristo, the Chaser, is one quality ride. Looks like the demand may increase for these jdms.

        • ESEMCE on 11/02/2014 - 14:36

          Having been in a Challenger (6cyl model), I can say it was incredibly disappointing. Build quality was atrocious, it sounded boring and had less get up an go than my i30.

        • tonyjzx on 11/02/2014 - 14:37
          +2

          The Mustang is already coming, was confirmed late last year.

        • Speckled Jim on 12/02/2014 - 11:30

          if you know what they are, name them, i'd be interested, if only on a purely academic level

          Okay here's one that was already alluded to.

          The Camaro is based on the VE Commy platform. It should be easy for GM to flip for RHD.
          Whether they want to is another matter.

          Long-term there's nothing. Unless Aussie designers and engineers have input for US manufacturing with an eye to having some of them imported to us. Maybe. Probably not, as I think Holden have so much contempt for our market, they'll simply dump their Korean garbage on us.
          Yay.

      • jace88 on 11/02/2014 - 17:57

        But how about the price of those parts, and whether there will be non-OEM alternatives to keep prices down? Whilst the big T should be fine given they just substitute manufacturing locations of models and parts are available worldwide, the Aussie-only cars are where there is greatest risk.

  • mini2 on 11/02/2014 - 11:59
    +7

    Bring back the 15 year old rule. Actually, since there's no car industry to protect, open up importation completely…that should help expand the current importers industry and create jobs to offset some of the ones lost when culling Ford/Holden/Toyota.

    • tenshi13 on 11/02/2014 - 13:21
      +2

      agree but the offset does not come directly as the skillsets involved are shifted
      we're going from manufacturing to more business/sales/servicing oriented jobs
      the whole dynamics of the supply chain might be affected too

      • mini2 on 11/02/2014 - 14:27

        I was reading some articles about this whole debacle, when Mitsu closed up and a lot of workers were able to find jobs relatively quickly but in completely unrelated field and often for less cash than what Mitsu were paying.

        IIRC this piece is from Wheels couple of months back when Ford announced its closure…a lot of the workers aren't skilled either, flip a piece of metal into the stamping machine, push a button, retrieve the stamped steel…rinse and repeat. Someone will need to manage the transition pretty darn carefully.

        The Mitsu workers might have been lucky when they closed up shop, it was only them. Ford/Holden/Toyota's workers on the other hand…..

        • tonyjzx on 11/02/2014 - 14:38
          +1

          Mitsubishi closed up a long time ago when economic conditions were different.

        • mini2 on 11/02/2014 - 14:46

          That's why I said the Mitsu workers might have been lucky when that happens 10 years ago.

      • Serapis on 12/02/2014 - 22:52

        It's in line with the the trend of deindustrialisation along with other OECD countries, due to cheaper manual labour found overseas where there are no or bare minimum guarantees of wages / working conditions overseas.

  • coin saver on 11/02/2014 - 13:13

    dont forget that the cost of shipping a car will increase as the ships will be leaving australia empty.

    • stralya on 11/02/2014 - 14:02
      +5

      The cost of shipping a car is actually small. I deal a lot with imports from China. I would estimate the average freight cost per car to be around $200 to $300. The cost of road freight within Australia is usually more than the cost of international freight.

      • hahaboy on 13/02/2014 - 00:55

        What type of imports do you deal with if you don't mind me asking?

    • mini2 on 11/02/2014 - 14:30

      IIRC it's around $95-105USD per sqm for a car ex Japan depending on shipping line. My smallest shipping bill was for Rover Mini's in the $500 region…damn those were the days.

    • ESEMCE on 11/02/2014 - 14:40
      +3

      Why?
      ~90% would already be leaving empty, it's not like we export many vehicles at the moment.

      • donga100 on 12/02/2014 - 21:38
        +1

        It's not like those ships can only carry cars either.

        • ESEMCE on 13/02/2014 - 08:52

          I'm not in the business, but I'm pretty sure, that's exactly all the do.. they're designed to transport cars, so they're like a multistory carpark on the water..
          So to load anything else into them they'd have to be very car like.. self powered and able to manoeuvre around tight spaces.
          They don't put cars in shipping containers like they do in the movies.

          PS.. Most Container Ships leave our shores empty too.
          That's why Shipping Containers are cheap here.. After a few uses it's cheaper to build a new Container in China than it is to load it back on a boat empty.

  • morpheu on 11/02/2014 - 15:18

    in the short term, prices may drop, with more unemployed less people can afford to buy new cars so prices may come down, in the long term, the cost will be substantial i believe, cost to the government in terms of social security as not all the newly unemployed will find new jobs, cost to the rest of Australia as the government will have less tax revenue coming in placing even more burden on the existing tax payers, looks like the future for manufacturing in Australia will be virtually non existent, on the good side, our monthly trade balance shows we import more than we export so a strong $AUS will be in our benefit (to the detriment of our exports)

    • Wallyt99 on 11/02/2014 - 18:26
      +7

      How I love forum economic modelling.

  • retiredfeline on 11/02/2014 - 18:55
    +2

    Fold/Holden/Toyota all pulling out

    Ah I see what the problem is. With a name like Fold, they have to live up to it. :)

  • t_c on 11/02/2014 - 19:06
    +2

    Here's hoping that the plant closures will start a snowball effect that will bring housing prices to affordable levels.

    • neonlight on 11/02/2014 - 19:40

      Unlikely unless China economy goes with it.

      • t_c on 11/02/2014 - 20:55
        +2

        Have you seen those ghost towns they are building in China, sustainable?

    • _Bruce_ on 11/02/2014 - 20:00
      +3

      Here's hoping that the plant closures will start a snowball effect that will bring housing prices to affordable levels.

      You don't really want this. It means things will be very, very bad.

      • scotty on 11/02/2014 - 21:59

        Yes definitely not a good idea. It might be worse, where AUD$ got devalued and more overseas buyers flooding the market buying houses.

  • porsche26c on 11/02/2014 - 20:40

    This is due to high cost of production.

    1. Carbon tax introduction - electrical costs
    2. Labour/union - these workers had stupid benefits way beyond the norm.

    it comes down to the fault of everyone from the government to the workers.
    but really i believe the workers with their benefits.
    but the sad thing now is the economy will be hit because all these workers, parts makers etc pay tax.

    • Cheeper on 11/02/2014 - 20:45

      +Asian labour and productions costs much lower
      +The future influx of vehicles from China

      Somehow an open market is not really competitive when other countries only pay workers one tenth or less than Australian workers… not exactly a level playing field.

    • Sevenofnine on 12/02/2014 - 03:16
      +6

      Carbon tax…. seriously !? even Tony is not mad enough to blame this one on carbon tax.

      • Speckled Jim on 12/02/2014 - 11:43
        +3

        And

        Labour/union - these workers had stupid benefits way beyond the norm.

        Have you been asleep for a week? Toyota released their data on this, and Abbott was found wanting.
        Yet again.

        A major contributor to the manufacturing problem in this country is thanks to billionaire mining magnates. They are the ones paying stupid money for unskilled labour. Other industries such as manufacturing can't compete on wages.

    • findit on 13/02/2014 - 12:49

      Plus good leadership of company. Surely production costs in German is no lower than Australia. Yet no problem for car manufacture companies there.
      Was searching for good small/medium car in 2012 and 2013. Neither Ford nor Holden's offerings are good enough. Australia has the technology to build good car, but none can compete against overseas product. Those companies lost market share for a reason!

      • _Bruce_ on 13/02/2014 - 14:17

        Surely production costs in German is no lower than Australia.

        Germany uses the Euro, which is in a very different situation. I would also suggest you have never been to East Germany.

        Neither Ford nor Holden's offerings are good enough.

        Any particular reason?

        Australia has the technology to build good car, but none can compete against overseas product.

        The technology is the same, GM, Ford and Toyota are all global companies with global technology platforms, the difference is the manufacturing costs.

      • Mumbles on 13/02/2014 - 14:17

        This is certainly true. There are talented Australians working for overseas car manufacturers as managers, designers, engineers.

        There are several successful automotive inventions which came out of Australia (eg. windscreen wipers):
        http://www.carsguide.com.au/news-and-reviews/car-news/aussie…

        Though the talent is here it would be impossible to compete with the likes of a German car manufacturer.

        Firstly, they can sell higher volumes which means cost per vehicle is less.

        Secondly, who would an Australian manufacturer export their cars to? The USA is protectionist and import a smaller variety of models than anywhere else.

        Third is established branding. The German manufacturers already have a reputation, generations of future clients and repeat business. A newly started Australian manufacturer would have to build their brand from scratch.

        • coin saver on 15/02/2014 - 10:41

          gm will only import 100 holdens a month excluding police cars despite much larger orders. they claim they only want a niche market.i suspect a sweetheart deal with the us goverment so much for free trade…also gm is closing 1 plant in germany and moving production to england.

  • onlyletters on 11/02/2014 - 22:35

    With the closing of such big companies like Toyota/Ford/Holden, the future of Australia is really concerning!!!

    • SupeNintendoChalmers on 11/02/2014 - 23:49
      +1

      More specifically the future of manufacturing in Australia is finally dead. People have announced it for years, but I think now that the big T is going, its all over.

      I can see most of these workers getting new jobs, albeit in areas that pay way less. For example my old man was made redundant at a parts maker for Ford. He retrained as a home care worker (for old people). He has to shower and clean old folks for shit pay and next to no conditions, so he's had to readjust his spending.

      That's what's going to hurt these worker at Holden/Ford/Toyota the most- the lower pay\conditions in their new jobs. The lack of discretionary funds will hurt the rest of economy though as more people make do without 'luxuries' like Pay TV, eating out regularly, cinemas, theme parks, holidays, McMansions etc. Tourism and hospitality will suffer massively as the change happens, so plan to see more jobs lost in the near future.

      The next 5 years will be fascinating and horrifying….

      Also someone more knowledgeable might be able to answer this, but what's stopping a company like Hyundai from taking over a factory? I gather they just need to retool and retrain. Surely they can rehire workers for considerably less and pretty much have the Aus domestic/fleet market to themselves. Not to mention Messrs Napthine and Abbott would be bending over backwards to save their jobs (esp Napthine)

      • _Bruce_ on 12/02/2014 - 07:04
        +1

        but what's stopping a company like Hyundai from taking over a factory?

        Financial suicide?

        Surely they can rehire workers for considerably less and pretty much have the Aus domestic/fleet market to themselves.

        Doesn't work like that. We probably are barely viable at minimum wage anyway. If anyone was to build here it should be a high end brand.

        Abbott would be bending over backwards to save their jobs

        He certainly doesn't seem to be.

      • onlyletters on 12/02/2014 - 15:05
        -3

        they were getting paid too much in the first place, 80k for a factory worker, should have been more like 45k

        • _Bruce_ on 12/02/2014 - 15:15
          +1

          It was, you are reading sensationalist headlines only.

        • Mumbles on 13/02/2014 - 14:40

          The figures ARE astounding.

          Malcolm Turnbull was aired on this weeks ABC's Q&A and said by his calculations after dividing the total subsidy amount by number of Australian employees the government had subsidized each Holden worker $53K per year, each Ford worker $37K per year, next to nothing for Toyota.

          With figures like that its at least worth public discussion on how much tax payers would be willing to give away per employee.

  • mousie on 11/02/2014 - 23:31

    The government should consider pumping all that money that was keeping the industry afloat into creative ways to increase the speed of the NBN roll out. As we need to have lower pings to the Ozbargain website as the economy crashes around us and we need to save money on luxury items and steam downloads that won't be played. We should then sub contract ourselves out to rolling out broadband into Dubai or South east Asia while buying stacks of Korean cars. Win

    • cat06969 on 12/02/2014 - 09:32

      Can't wait for the NBN speed. Make half-arsed OZBargain quips at the speed of light.

  • Sevenofnine on 12/02/2014 - 03:45
    +2

    the decision not to support the car manufacturing is short sighted and terrifyingly dumb.
    so what is the Australia economy ?
    do you build stuff?…"nah too expensive"
    do you make stuff?…"nah too expensive"
    do you do anything electronic?…"nah way too expensive…but we export lot of our stuff, we just let other people dig it up or drill it out and sell it… and we get a commission out of it… clever huh…"

    so the answer to the question… yes, new car price will come down but only because less people can afford to or have the confident to buy new car and so stick to their old car longer, so secondhand cars would hold better resell value.

    • MoMoney on 12/02/2014 - 19:29
      +2

      It's not Australia or the Australian government that is saying it's too expensive to manufacture goods here, it's the Industries that are losing money hand over fist due to to Globalisation. This industry has been limping along for years, only surviving because of the handouts that they have been receiving, and yet still couldn't turn a profit in Australia. These closures were an inevitability, not a decision that was made by anyone. Businesses need to make money, and employees need to earn wages. If said wages can be reduced by shipping manufacturing elsewhere they will always choose that option in the long run.

      The only way the Car Manufacturing Industry could have survived was for all employees to take a pay cut, or to sacrifice wage increases for several years until the industry became profitable (if that ever happened). But why should they? Everyone deserves a pay increase to offset inflation. So why continue to flog a dead horse when the same money that gets invested into handouts can be used to re-skill and strengthen other Industries that are not in a downward spiral?

  • ranma on 12/02/2014 - 09:38

    I want to buy a Rukus - should I get it sooner or later?

    • onlyletters on 12/02/2014 - 15:06
      +3

      imo dont buy it at all

  • boccos on 12/02/2014 - 10:25
    +2

    Government is following the new world order and allowing countries with cheaper labour costs to take businesses that have a high people count and let them move to those countries. Mind you, in doing so, it does massive damage to every country's economy including the USA. Eventually the effect will be to lower our hard fought wages, lower our standard of living and move more of our population below the poverty line. Conversely, those countries claiming the Manufacturing and other industries get wealthy until they henselves get bowled over by other cheaper countries.

    Then because Australia is seen as a stable easy-peasy Country, the wealthy folk from the above countries like to buy our Real Estate, forcing prices even higher. It makes Real Estate Agents happy, but no one else is. Some even like to buy our businesses and send profits off-shore in order to avoid paying Aussie taxes.

    This and every previous Government is fully aware of the status, and is holding Australian citizens upside -down, shaking the cash from their pockets in order to keep Government functioning.

    At ground level, losing the car industry, losing the furniture industry and many other industries will also result in a hands-on skills shortage. In 10 years time, if you want a Welder or Boilermaker and the like, you will need to bring them in from another Country. There will hardly be any Australian Companies capable taking on large contracts, so these will tendered for Worldwide.
    Shame on our Polly's for thinking so lowly of Australians, viewing us as Dollar Values or Assets to plunder.

    Of Course prices of Cars will go up when there is no local car manufacturing. No doubt at all on this matter.

    Buy now before 2017 rather than later.

    • ItsMeAgro on 13/02/2014 - 11:01
      +1

      allowing countries with cheaper labour costs to take businesses that have a high people count and let them move to those countries. Mind you, in doing so, it does massive damage to every country's economy

      You might want to look up "protection" in any basic high-school economics textbook. TL;DR: All tariffs/subsidies that prop up unprofitable industries - like car manufacturing in Australia - are economically worse for BOTH that country and every country involved.

      That doesn't mean we should get rid of them all, there are non-economic reasons to protect some industries we suck at, but there's some pretty stubborn maths behind the fact that economically, free trade is better for everyone long-term.

  • branners on 12/02/2014 - 11:58
    +5

    The price of cars in the medium-to-long term future is difficult to predict because of the currency.

    Australian bought almost 1.1m vehicles in 2013 and almost 90 percent of those were imported. That will become 100 percent some time in 2017 (or perhaps even before) so that change in itself is not likely to be a massive factor in determining the retail price of vehicles.

    The biggest impact on prices has been the strength of the dollar. With a high A$ recently, cars are cheaper now than they have ever been. F'rinstance, when Nissan re-introduced the Pulsar last year, the price of the base model was the same at the equivalent model in 1996. In real terms (ie, the number of weeks' average salary it takes to buy the cars) it cost almost half as much as it did 17 years ago — and the new car is bigger, quieter, faster, more economical and has far more safety features.

    What will determine the price of cars is how the currency stacks up against source nations. Aus now has Free Trade Agreements with the USA and Thailand, one is about to take effect for South Korea and one with Japan is being negotiated. Those four countries currently provide around 65 percent of our car imports. As a manufacturer, Thailand is on the rise, and China will become a major source of imports in the next decade.
    Three companies have announced withdrawals from local manufacturing since May; I have seen no suggestion by anyone from the car makers or associated parties that the carbon tax has played a role. That talk all seems to come from Canberra.

    Ford will finish off the Falcon and the Territory by October 2016, because the new Euro V emission regulations take effect on 1-11-2016 and Ford's locally made engines do not meet those rules. In the meantime, expect to see a new model Falcon mid-year.

    Currently Camrys are made in Australia, Japan, Russia, Thailand and the USA. Toyota has a new Camry coming in 2017 so the local model will likely stay until then, unless sales fall off, in which case Toyota can switch to an imported version. Switching sources happens all the time; just last week, Toyota confirmed that all its Klugers will now be sourced from its plants in the USA, including those for the Aus & NZ markets.

    Holden will continue with Commodore and Cruze as long as sales hold up, but it could well, in theory anyway, close down local Cruze production and source the same car from Brazil, China, Korea, Thailand or even the USA. Of course, the last three countries have FTAs with us.

    As for the actual cost of cars, Toyota said this week that it costs A$4000 more to make a Camry in Aus than it does in Asia. It will be up to the company to decide how much of that saving, if any, gets passed on to the customer once all Camrys are imported.

    My view; if the Reserve Bank gets its way and the $A goes to about $0.80, the car companies will hedge lower than that (maybe in the low 70s) and the price of cars will rise — unless those costs are offset by lower import costs because of the FTAs.

    Sorry to be so long-winded but this can be quite complicated…

  • Kempe on 13/02/2014 - 09:11

    How it affects car prices will depend on the people
    If a tariff was put on to protect local industry and that industry is now gone, the tariff should be removed.
    If not, lobby your local federal politician and remind them they can be ousted at the next election.
    You get the politicians you deserve so get off yer collective butts and start lobbying or they will pocket the money

    • _Bruce_ on 13/02/2014 - 09:24

      start lobbying or they will pocket the money

      Why does everyone seem to think the politicians get this money? It is public money. Goes to the whole country. If you aren't planning to buy a new car, it is in your best interst to leave the tariff there.

      • ItsMeAgro on 17/02/2014 - 13:45

        Yeah, assuming the government uses money efficiently and doesn't waste it like crazy…

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