What Really Killed the Australian Car Industry?

Here’s why the Australian car industry really died:

Ford, Holden and Toyota blame everyone and everything (except of course themselves) for the demise of local car making. The Federal government blames the opposition, and vice-versa. And the Victorian and South Australian governments blame the feds. It’s all buck-passing BS. Here’s what really killed car-making Down Under:

Ford had the audacity to throw a multi-million dollar VIP and media party at Fox Studios following its announcement to pull out of making cars here.

General Motors actually saw fit to promote former Holden Boss Mike Devereux to a nice, cushy international job after being a good boy and overseeing the execution of Holden’s factory, and essentially signing off on the blueprint to transform the red lion into Australia’s third South Korean car company — the one without the five-year/unlimited kilometer warranty. Mr Devereux had form — he’d been very good at firing people for GM previously.

Toyota: Well, the world’s largest carmaker had more then enough cash to keep its Altona operation in Victoria cranking out Camrys and Aurions for Australia and the Middle East until the end of time — Toyota merely decided it didn’t want to make cars here any more.

Time to lose the jingoistic patriotism. Ford, Holden and Toyota are as authentically Australian as McDonald’s. These are multinational companies with practically unlimited resources. They can do whatever they want. Backing out of making cars here was simply a morally bankrupt choice that they made. They squandered your investment in them. Basically, they pissed your money up against the wall, and they want you to move forward as if this is not a slap in the face.

Let’s do a little experiment: Put your hand up, if you’re one of those outraged, tragic idiots bemoaning the demise of this lame duck industry that refused to float despite the armada of lifeboats you, the taxpayer, floated in its direction. Now, put your had down if you actually bought a brand new, Commodore, Cruze, Falcon, Territory, Camry or Aurion in the past five years. Has to be a brand-new one. Used doesn’t count.

Have a look around at all those hands still in the air. The non-buyers of the product. That’s the real problem — all you so-called patriots who lacked the financial cojones to put your money where your mouths are, and actually buy the product. The business plan for a car factory is very simple. Two steps. Make cars. Sell cars. It all hinges on people actually buying them.

All three car companies have blamed the sky-high Aussie dollar, the low five per cent import tariff, the high cost of Australian labour and the free-trade agreements with Japan and South Korea. Also cited have been market fragmentation, unions and reverse economies of scale as volumes dwindle.

Last time I looked, Ford and GM were (notionally) American, and Toyota was (notionally) Japanese. The free-trade agreements are a net benefit to all three companies.

For those of you who want to make this into a political football, it’s not a lack of government support that killed this industry. It’s not the Coalition and it’s not Labour. .5 billion in taxpayer support over the past 12 years — with both sides of politics kicking the tin — that’s more than enough time and money to float just about any boat, no matter how decrepit or how much water it’s actually taken on. If you throw .5 billion at anything, you can fix it.

If you ever investigate anything, listen hard for what’s not being said. That’s always the key to the truth. It’s what the manufacturers didn’t say here, that gave the game away. Holden, Ford and Toyota did not say: ‘We’ve made mistakes.’ They didn’t say ‘We got the product wrong’. And they did. Monumentally wrong. Big mistakes. They did not say that. Best Commodores and Falcons ever. Sure. No argument. However, Aussie buyers increasingly increasingly didn’t — and don’t — want the cars that these clowns chose to make. With your money.

It cost the taxpayer .2 billion to see Holden fumble the ball on Commodore. Commodore sales fell from 88 thousand in 2002 to 27 thousand last year. It’s like a decade-long train wreck in slow motion.

Toyota got handed .2 billion over 12 years to kill Aurion sales. They dropped from 22 thousand in 2007 to under 7000 last year. 66 per cent down.

Ford got .1 billion from you to effectively euthanize the Falcon. Sales died in the water, down from 73 thousand in 2002 to just 10,600 last year.

Car companies call it ‘co-investment’, which implies consent … even a reasonable return. The truth is far less palatable. It’s extortion: money for jobs. A threat. Gun at your head, Government; pay up. It’s a protection racket. The mafia does business this way.

25 thoughts on “What Really Killed the Australian Car Industry?

  1. The problem is much larger than Australia. The Australian governments over
    the years have sold companies that were profitable which leaves the
    taxpayer to make up the shortfall. The governments should have been buying
    more businesses to relieve the Australian taxpayer. The reality is that
    people are going to shop around for the best deal. The only way to keep
    manufacturing in Australia and the US for that matter is tariffs. Sure then
    the car companies must follow the market and actually build cars that
    people want to buy. Australia can’t compete with countries like China or
    India in manufacturing. Don’t even try, bring back tariffs and bring back
    manufacturing to Australia. Don’t just be a mine for the rest of the world.
    Value add.

  2. Isn’t the Free trade agreement also somewhat responsible? The reason for so
    many brands competing against the Aussie car manufacturers 

  3. To many cars coming to Aus has killed it here. Like he said, we are not
    buying them. Nothing to do with high wages, its profits they want. If we
    worked for $10 an hr. The car price won’t go down. More profits is all they
    want. I wonder why don’t the workers just keep going with new Execs and
    everyone gets same wage till things pick up.

  4. Good riddance to all of the manufacturers! They had it too good for too
    long. Any CEO who flies in a corporate jet to Washington with cap in hand
    asking for a bailout is representative of the little these manufacturers
    really understood or cared less about their predicament. Back to Oz, next
    on the agenda is to abolish the fraudulent eye gouging that is the
    LCT. This should follow a serious [independent] inquiry at the import
    restrictions in Australia and why they should still stand. In turn, this
    would be the time to re-educate the next generation of Australian car
    buyers and send a strong message to all new vehicle manufacturers come
    importers to re-evaluate their pricing policies for the Australian
    market…no one wants to hear about the Aussie dollar vis a vis the US
    dollar or Japanese Yen, or about import costs, or duty costs in the absence
    of FTA’s. Australians are sick of being offered weak coffee in showrooms
    then paddle slapped on the bare ass when signing on the dotted line. A new
    world is nigh… 

  5. Canada is facing similar problems. Auto manufacturers are leaving Canada to
    produce cars in Mexico- cheaper, no standards and regulations and cheap
    labour. Canada used to produce +3 million cars a year. Now it is at 2
    million cars. Made in Mexico cars are junk. The North American Free Trade
    (US/Canada/Mexico) and the exodus to China are killing Canada’s
    manufacturing industry. Now that energy/oil and gas are cheap and labour
    costs in Mexico and China are increasing, the manufacturing and the auto
    industry should be able to return to Canada/USA and similar result to
    Australia. 

  6. I told people in America that Australia only produces just over 200,000
    cars per year and that there are multiple factories in America that produce
    twice that including the Camry factory in Kentucky that does around half a
    million.

  7. Credit where credit is due. An excellent video. Some hard truths that’s for
    sure. Sad that the local industry is dead, many of us saw it coming.

  8. I look at why the government signed the LIMA declaration in December 1975
    by removing tariffs from Australian manufacturing, not just the car
    industry. Why should Australian’s disadvantage themselves economically by
    assisting “developing” countries with cheap imports. We are now really
    paying the price.

  9. I’ve always thought the reason the Aussie car industry failed is simple,
    Ford, Holden and Toyota failed to make a locally produced car that was
    equally or more appealing than imported cars, thus consumers voted as such
    with their wallets. It’s the manufacturer’s own bloody fault. Competition,
    pure and simple. And Falcon, Commodore and Camry et al could not compete.

  10. Maybe australians aren’t patriotic enough to buy their own products. But
    will piss and cry about aussie jobs, then head down to the car dealer and
    buy a import fucking hypocrites.

  11. Although a little unpalatable, sounds like a pretty accurate appraisal of
    the situation. Now I’ve been a supporter of one of these companies most of
    my life, but (though I would have liked to) I’ve never bought any one of
    them new …ever! Just goes to show, that just because we might admire
    something greatly and revere it for it’s beauty, we don’t always want to
    take them home to our garages or beds. In the end, It’s all about
    affordability and most take the practical route over the lust for shiny
    curves. But If you are well heeled and can afford it, that’s what a
    mistress is for. I guess what this highlights is, that most of us just
    aren’t that well heeled?

  12. at the end of the day its all comes down to cash money they dont give a
    fuck about australia blah blah blah MONEY thats it,
    dogs greedy cunts, there having a cry coz it cost to much to pay the guys
    who really make holden ford ect the men and lady’s who have been working
    there for god now how long even my old man work in the plant when here was
    a young cunt left coz the pay was shit and the line was a cunt of a job i
    think he was putting on the window rails back then he telling me a store
    how that job was a cunt of a job, even if ever one work for free they still
    wod have a cry about something fukn greed 

  13. These car companies are not silly they own or are heavily involved in all
    the Korean and Jap cars anyway,so they don`t need us to make cars we gave
    up on .Air travel has taken over long distance driving,jump out of your
    Hyandi ,get on a plane and rent your Kia at the airport on landing.No need
    for the luxury of big touring cars. 

  14. I think you are right. I knew this from the very beginning. They just would
    not part their old ways and build cars that people want to buy.

  15. Australia can do anything and everything if we allow our selves too, but
    their is always going to be some politician that is going to dictate what
    Australia can and cannot have, some of our politicians are such jerks that
    they will find every possible way to take advantage of us and rob us of our
    freedoms, it can be anything.

    Australasia boating industry and merchant industry will be next….!!!

  16. Not many Australians bought these cars as it did not meet their
    needs and/or expectations. Upgrading from a 2005 model Camry, falcon or
    commodore to a 2014/2015 wouldn’t really give you the bang for your
    buck. The new models don’t have some of the bells and whistles which
    are offered by other manufactures.

  17. It’s unforgivable enough that the car industry is dying, (I’m talking about
    both your Australian car industry and our American car industry), but it’s
    even worse (if there’s such a thing) that they have the balls to blame
    other people for their own death and not themselves. 

  18. That’s a fairly reasonable and accurate account John although I wouldn’t
    spend too much time suggesting that a portion of blame should be accepted
    by those intelligent buyers who chose to spend their money on products
    which represented an intelligent investment. I remember attending one of
    the Motor Shows decades ago in Brisbane where Holden where proudly
    displaying the transmissions they developed with our money so they could
    sell all-wheel drive V8 powered vehicles to bogans. At that point I saw the
    writing on the wall. What a monumental fuck-up and waste of R&D. The single
    most salient (and absolutely correct) point you make is… they developed
    the wrong products… idiots!

  19. great reporting, hit every valid point. I’ve noticed over these past few
    years, the lack of big ford/holden cars apart from the occasional cop cars.
    no one’s buying these things, but they keep making more of them at a loss
    and we all paying for it. thanks for ur video, well done. 

  20. The three manufacturers didn’t make cars people wanted to buy in numbers
    that made them viable. I agree but also disagree. Somewhere in the stable
    of these big three multinationals there is room for a large sedan, it needs
    to be built somewhere and it was a format Australia was good at it. It was
    the failure to build models that could be sold around the world that would
    have made up the numbers. Failure to export is what undid this. At its peak
    export Holden was profitable. Ford was never in the game and you could
    argue that Camry was viable and as he said they pulled the pin for no real
    reason.
    

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