The closure of Ford’s Victorian engine plant is probably the beginning of the end for Australian car assembly, says the car buyer’s Dog & Lemon Guide.
Editor Clive Matthew-Wilson believes that Ford, Holden and Mitsubishi will all eventually stop manufacturing in Australia.
“Both Ford & General Motors are in serious trouble globally, while Mitsubishi Motors Australia is haemorrhaging money. Therefore, it seems inevitable that their Australian car assembly operations will be phased out.”
“It might take ten years or it might happen in one year, but the chances are, it will happen.”
However, Matthew-Wilson believes Mitsubishi will be the first company to end its entire car assembly operations.
“As things stand, it will require something of a miracle to keep the Australian Mitsubishi factories open.”
Matthew-Wilson added:
“Please don’t shoot the messenger. I’m well aware of how many Australians rely on the car assembly industry for their jobs and I sincerely hope that we are wrong when we question the viability of Australian car manufacturing. However, the fact is, car manufacturing in Australia is only marginally profitable even in good times, and for many manufacturers the good times are over.”
A closure by Ford, Holden and Mitsubishi would see Toyota as the sole volume manufacturer in Australia. Toyota is the most successful car manufacturer in the world and is under no pressure to cut back on its operations. However, the Dog & Lemon Guide noted:
“Car manufacturing these days is rapidly stampeding towards low-wage countries.”
“What we are saying in the Dog & Lemon Guide is a common topic of discussion within the car industry. It’s just that few people are talking about it publicly because it’s too scary to contemplate.”
Sobering statistics:
• Sales of locally-built vehicles in the Australian market have fallen from 36.1% in 1998 to 19.4% in 2007
• Ford Motor Company posted global losses of $12.6 billion last year.
• Mitsubishi Motors Australia lost $226 million last year and expects to lose money this year also. Sales of its 380 car – which is critical for its survival in Australia – have fallen well short of expectations.
• General Motors lost $2 billion last year and sales are plummeting in the crucial US market. The company is currently being kept afloat by savage cost-cutting and a massive sale of company assets. Toyota is now worth 10 times as much as GM on the stockmarket.
• The phonebook-sized Dog & Lemon Guide is the world’s largest car buyer’s guide, first published in New Zealand ten years ago then considerably modified for international release.