Car industry hits 'low-water' mark

[johnydep]

Is this a warning towards Holden's & Mitsubishi's replacement large vehicles?

Car industry hits 'low-water' mark

He said taxpayers had contributed $7.2 billion worth of subsidies over the past 15 years to the four big producers and it was time that they made a bigger commitment to use components supplied by local manufacturers.

Mr Macfarlane said Ford, Holden, Mitsubishi and Toyota had to accept an obligation to use Australian-made components and provide technical help to local producers in return for the billions of dollars worth of help they had received.

Some new models are now using just 56 per cent local content.

Mr Macfarlane said the common view was that "if you get below 50 per cent local content it's easier to bring the car in fully assembled".

[spope]

Ian Macfarlane is a waste of space.
"Obligation to use Australian made components" Ha! Yeah, all four major manafacturers were supplied some components by Ion and now that's all gone to hell. If the manafacturers can't rely on a local supply chain they have no choice but to look overseas.
I realise the Ion are still manafacturing componentry, but the trouble the company is in has tarnished the australian automotive industry overall.
If they want more product to be sourced local, then they need assistance to sell more cars. Reducing import tarifs is crap!
We now have a situation where Holden is laying off their third shift, Mitsubishi has shut down an engine plant, and there are job cuts across the board at almost every level, because the local manufacturers are struggling to compete on a global level.
Geez this government ****es me off. And making statements like this does nothing at all to help our local industry.

[SSbaby]

It's a worry given that the VE will be around 55% local content (if rumours are true) and tariffs will come down to just 5% next year.

[4.9 EF Futura]

Originally Posted by spope

And making statements like this does nothing at all to help our local industry.

True, but you cant ignore the $7 billion + that have been handed to them from federal and state coffers.

And in the above mentioned article, a further $108 million in grants for R&D.

Ford Australia posted $185.6m profit in 2004 year.
GMH posted $216.4 m profit for 2004 year
Toyota Australia roughly $70 m
Mitsubishi... well, obviously not making bucketloads at the moment.

The point being? Well, the industry is making money - for now. No doubt, billions of dollars over the last decade has been a significant contributor to this. Yet you still feel the need to take a swipe at the government? How about some accountability directed towards board, management and shareholders of these companies?

[Brute6]

Originally Posted by spope

If the manafacturers can't rely on a local supply chain they have no choice but to look overseas.

And thats where the problems begin...

[spope]

How about some accountability directed towards board, management and shareholders of these companies?

Their accountability is thus: Import tariffs are going to be reduced AGAIN. They (all 4 manufacters) are faced with ever increasing competition from Korea, Thailand, Japan, Europe and others with cheaper cars that are being better built. The only way they can stay price competitive in the current market is by finding cheaper ways to build their cars. There are a couple of ways to do this, one is by reducing the amount of money they spend on labour. It's a well known fact that Australian labour is some of the most expensive in the world. But if they reduce workers or shifts, there is massive public outcry and government backlash. Another way to reduce the cost of a car is to use cheaper components. Reality is that a lot of components are cheaper to buy from Mexico, South Africa or most of Asia.
The government wants a strong australian auto industry, that's great, so do I, but making it harder to compete? That just doesn't sit well with me.
Hey, I'd love it if the new mits was being built with an Australian engine and gearbox - or if Ford could of got Ion to build the new six-speed - but reality gets in the way of idylic thinking.
As market share for the 5 locally produced sedans gets smaller, things are only gonna get tougher.
I'm just glad Ford got the jump early with the territory. They are the best positioned for the future, at least in the next 5-8 years.

[johnydep]

Originally Posted by spope

Their accountability is thus: Import tariffs are going to be reduced AGAIN. They (all 4 manufacters) are faced with ever increasing competition from Korea, Thailand, Japan, Europe and others with cheaper cars that are being better built. The only way they can stay price competitive in the current market is by finding cheaper ways to build their cars. There are a couple of ways to do this, one is by reducing the amount of money they spend on labour. It's a well known fact that Australian labour is some of the most expensive in the world. But if they reduce workers or shifts, there is massive public outcry and government backlash. Another way to reduce the cost of a car is to use cheaper components. Reality is that a lot of components are cheaper to buy from Mexico, South Africa or most of Asia.
The government wants a strong australian auto industry, that's great, so do I, but making it harder to compete? That just doesn't sit well with me.
Hey, I'd love it if the new mits was being built with an Australian engine and gearbox - or if Ford could of got Ion to build the new six-speed - but reality gets in the way of idylic thinking.
As market share for the 5 locally produced sedans gets smaller, things are only gonna get tougher.
I'm just glad Ford got the jump early with the territory. They are the best positioned for the future, at least in the next 5-8 years.

What is the Japanese & German labour rate?

Smarter thinking is required, not protectionism.

Look through the history books back to the 1970's, Australia had tarrifs for everything but non of them protected us from the financial mess the country was in.

[Bossxr8]

Originally Posted by spope

Their accountability is thus: Import tariffs are going to be reduced AGAIN. They (all 4 manufacters) are faced with ever increasing competition from Korea, Thailand, Japan, Europe and others with cheaper cars that are being better built. The only way they can stay price competitive in the current market is by finding cheaper ways to build their cars. There are a couple of ways to do this, one is by reducing the amount of money they spend on labour. It's a well known fact that Australian labour is some of the most expensive in the world. But if they reduce workers or shifts, there is massive public outcry and government backlash. Another way to reduce the cost of a car is to use cheaper components. Reality is that a lot of components are cheaper to buy from Mexico, South Africa or most of Asia.
The government wants a strong australian auto industry, that's great, so do I, but making it harder to compete? That just doesn't sit well with me.
Hey, I'd love it if the new mits was being built with an Australian engine and gearbox - or if Ford could of got Ion to build the new six-speed - but reality gets in the way of idylic thinking.
As market share for the 5 locally produced sedans gets smaller, things are only gonna get tougher.
I'm just glad Ford got the jump early with the territory. They are the best positioned for the future, at least in the next 5-8 years.

With the price of petrol these days none of them are safe. If petrol prices go even higher then large sedans and SUV's will go even further into decline. Makes me wonder if i'll have a job in 5 years time.

[RPO83]

Most industry analysts have been busy focusing on the need to strengthen the education and training infrastructure, building a stronger R&D system and better showcasing of the industry to the community locally and abroad.

The Automotive Industry Strategic Action Group (AISAG) outlined a few key
issues in its published report from last month that included;
MVP's globalised supply chains
Weakening domestic supplier base
Increased product sophistication and technological change
Pressures to reduce costs/cycle times
A shortage of skilled people and a changing skills profile
Limited R&D and training funding
Emergence of China
Appreciation of the $AUD
Shift away from mid-size sedans

Both industry analysts and the industry in general support the further lowering of tariffs and do not believe protection will benefit. In a study by AISAG it was identified that Australia's costs are similar to most other nations in terms of materials and labour.