Let Oz Car Industry Die

Kinezakis said:

Toyota produces locally made vehicles to the exacting Japanese standards and worldwide platfom. The Japanese would settle for nothing less. Just because these vehicles are made in Australia does not make them inferior to any other Toyotas worldwide as the Toyota quality standards.

The same goes for Holdens and Fords in comparison to US standards. In fact Holdens probably make a better product than GM in the USA.

With Ford and Hold it has been difficult quality wise. If you look back and see what they have been up against. That is to develop vehicles from the ground up for a low volume domestic market(around 100K units a year). Other worldwide manufacturers are spending R & D for much larger volumes.

This will probably change in the years ahead as both GM and FMC have adopted worldwide platform rationalization programs. So you will basically be buying the same vehicles both here and overseas but made in their respective countries. This would bring development costs down dramatically.

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Can't really argue with any of that and point taken about Toyota.

Thinking about it some more, it's American manufacturers I'm not keen on rather than Australian per se. Trouble is, 2 out of 3 "Australian" manufacturers are American companies and to be blunt I think that's the real problem. The US auto industry isn't known for build quality and it's reflected locally.

That's not me being anti-American. Not at all. It's just that my experience and that of others I know tells me that American cars aren't built very well whether they are built in the US or are "Australian". Performance, looks and so on maybe, but not reliability.

The real trouble with the Australian industry in my opinion is (apart from Toyota) it's in the middle of nowhere in terms of product.

If you want something at the high end in terms of performance then (in global terms) you don't think of Australian cars. You think of Ferrari, Lamborghini, Porsche and so on. A Commodore ain't no Veyron.

If you want a more affordable fast car then a Nissan GT-R leaves anything we make here for dead unless it's massively modified.

If you want upmarket luxury then it's Mercedes, Rolls Royce and so on. We don't have anything that can compete there.

If you just want to get from A to B with good safety, reliability and economy then a conservative Japanese car is a pretty clear winner there.

And if it's the lowest cost you're after then the Koreans etc have that one sorted.

So we just don't seem to be leading in any category (apart from Toyota with reliability etc) and I think that's the real problem. We're focused on relatively cheap mass market production but don't have the low costs to make it work. So either get the costs down somehow (like Korea etc) or switch the focus to higher end vehicles (performance, quality, any common buying criteria really) that sell for higher prices.

Smurf1976 said:

Can't really argue with any of that and point taken about Toyota.

Thinking about it some more, it's American manufacturers I'm not keen on rather than Australian per se. Trouble is, 2 out of 3 "Australian" manufacturers are American companies and to be blunt I think that's the real problem. The US auto industry isn't known for build quality and it's reflected locally.

That's not me being anti-American. Not at all. It's just that my experience and that of others I know tells me that American cars aren't built very well whether they are built in the US or are "Australian". Performance, looks and so on maybe, but not reliability.

The real trouble with the Australian industry in my opinion is (apart from Toyota) it's in the middle of nowhere in terms of product.

If you want something at the high end in terms of performance then (in global terms) you don't think of Australian cars. You think of Ferrari, Lamborghini, Porsche and so on. A Commodore ain't no Veyron.

If you want a more affordable fast car then a Nissan GT-R leaves anything we make here for dead unless it's massively modified.

If you want upmarket luxury then it's Mercedes, Rolls Royce and so on. We don't have anything that can compete there.

If you just want to get from A to B with good safety, reliability and economy then a conservative Japanese car is a pretty clear winner there.

And if it's the lowest cost you're after then the Koreans etc have that one sorted.

So we just don't seem to be leading in any category (apart from Toyota with reliability etc) and I think that's the real problem. We're focused on relatively cheap mass market production but don't have the low costs to make it work. So either get the costs down somehow (like Korea etc) or switch the focus to higher end vehicles (performance, quality, any common buying criteria really) that sell for higher prices.

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agree so lets cut our losses and close the car industry down in Australia,

gg

Garpal Gumnut said:

agree so lets cut our losses and close the car industry down in Australia,

gg

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Now that is just plain selfish. I don't think the 150,000 odd in Victoria employed both directly and indirectly by automotive manufacturers would agree and be really be happy about that.

How would you like it if you were one of these workers and the continuing existence of that industry depended on your and your families livelyhood?

Mining is going through a boom at present. That boom WON'T last forever so we have to make the most of it in that industry for now. The same happened in the 70's with the Japs and after their ecomomy fell in a heap in the early 90's demand tapered off. It's the same for tradies during housing booms etc...

Rather than shut an industry completely, I think this country should try and be as diversified as possible, and manufacturing needs to be part of that diversification plan as do other industries.

The old saying is "don't put all your eggs in one basket"

Garpal Gumnut said:

agree so lets cut our losses and close the car industry down in Australia,

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Or change it radically and make genuine performance vehicles. Or make proper luxury cars. Or make genuinely economical cars. Just stop being the king of compromise as it doesn't seem to be working.

Kinezakis said:

Now that is just plain selfish. I don't think the 150,000 odd in Victoria employed both directly and indirectly by automotive manufacturers would agree and be really be happy about that.

How would you like it if you were one of these workers and the continuing existence of that industry depended on your and your families livelyhood?

Mining is going through a boom at present. That boom WON'T last forever so we have to make the most of it in that industry for now. The same happened in the 70's with the Japs and after their ecomomy fell in a heap in the early 90's demand tapered off. It's the same for tradies during housing booms etc...

Rather than shut an industry completely, I think this country should try and be as diversified as possible, and manufacturing needs to be part of that diversification plan as do other industries.

The old saying is "don't put all your eggs in one basket"

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I can hear what you say, but the fact is that these workers in Victoria and SA are being subsidised by tax payers to keep them in a job.

Meanwhile the mining industries are short 80,000 workers.

I worked in Melbourne in the late 70's in a suburb which depended on
an auto company and the mindset then amongst the workers was that it was a job for life and that the world owed them a living.

Workers in central Queensland are in the top 5% of tax payers nationally. They earn their money. There are no subsidies to keep them in a job. Whether they have awas or union negotiated agreements, they know what they are worth.

They are not in awe to Seoul, Tokyo or Detroit for their jobs.

gg

Garpal Gumnut said:

Workers in central Queensland are in the top 5% of tax payers nationally. They earn their money. There are no subsidies to keep them in a job. Whether they have awas or union negotiated agreements, they know what they are worth.

They are not in awe to Seoul, Tokyo or Detroit for their jobs

gg

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How about the Fuel Tax Credits Scheme for a start.

That amounts to a huge subsidy for the mining industy.

Here is a pretty good summary of the OZ car industry (IMO)
http://www.theaustralian.news.com.au/story/0,25197,24187806-28737,00.html

I'm still unsure of whether we should let the "car idustry" die but I would be horrified if we let our manufacturing base decline further. It has already declined to almost unsustainable levels, probably due to a combination of tarrif reductions and the emergence of cheap Asian imports. Having said that, lets remember that car assembly is simply that - assemble of a whole pile of bits and pieces. Maybe out manufacturing effort should concentrate on the car (and truck, etc) component manufacturing side of the equation. Probably we should concentrate on making components in a smarter, more efficient way, for the export market. Plus on the emerging (dare I say it, green) technologies and engineering side. Remember, Australia engineers a lot of the bits of cars that are now "made" overseas.

Macquack said:

How about the Fuel Tax Credits Scheme for a start.

That amounts to a huge subsidy for the mining industy.

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How does simply handing back what you took in the first place constitute a subsidy?

I tax you $50 then give you $50 back. That's not a subsidy.

Smurf1976 said:

How does simply handing back what you took in the first place constitute a subsidy?

I tax you $50 then give you $50 back. That's not a subsidy.

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Yes it is.

I have to pay excise on diesel I use in my truck (under 4.5 GVM).

Mining companies pay zero tax on diesel used in mining operations.

I am subsidising the mining industry.

So when general motors and ford merge, are holden and ford in Australia going to become Folden? It has a nice ring to it I reckon.

Garpal Gumnut said:

Add on to that the money paid to Bracksie and the other retired ALP hacks for running the inquiry, and all the other money spent going nowhere. Its like sit down money.

Mining is a cleaner environment than a GM or Ford sweatshop.

gg

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The problem with globalisation is that there is a tradeoff if you are in a wealthier than average country. Globalisation is meant to be an equalising force and theoritically it should distribute the wealth of the world evenly.

The real problem with this is that if it does that there isn't enough resources on the planet to feed everyone at the same quality of life that Australians typically have enjoyed. China, Taiwan and a lot of harder working nations are working hard to get a bigger share of the pie. Their hard work will of course result in better inventions, better quality, etc as they try to get the money of people that have it until they don't have it anymore and the countries equalise (unless one takes on a lot of debt to keep the flow going past that equal point by the artifical high dollar - then it is a shifting of wealth from the richer country to the poorer country).

While if you protect a country you won't get the increased competition and better products you will have a closed system where the wealth stays in the country and stability is a lot easier to achieve (and stability is the enemy of change and progress). It also keeps an economy from not focusing on debt-based industries and keeps them producing locally (i.e the financial servives industry is a debt based industry). People need to make something, and to compete against the rest of the world when they will work for nothing means that while we get cheaper products in the short term the end result means that to compete in the long term we have to live the same lifestyle as the highest competitng force in order to compete or in other words the lowest common denominator.

Anyone want to live like a rural Chinese worker? Or a Japanese doing long hour shifts? Then us as a country can't compete in the long term - simple.

The high paid jobs in Australia do have protection not necessarily from the government but because of location. You need tradies locally to build a house, you need miners locally to mine local resources - our advantages are not because of cheap labour but because local industries enjoy a natural protection compared to industries that are more flexible (such as IT, manufacturing, etc). Without protection nothing would be done here.

roland said:

protectionsim stiffles innovation, just wondering why the rest of the world would want the cars we make here ....

didn't Rudd just go to Japan and offer Toyota a big hand out to invest into green cars here??

I am unsure of the relationship of the Aussie car makers with the parents - isn't Ford and General Motors (Holden) American companies?

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absolutely agree, our cars cannot compete with Asian manufacturers, call me unpatriotic but Aussie made cars are utter and complete rubbish.

Macquack said:

Yes it is.

I have to pay excise on diesel I use in my truck (under 4.5 GVM).

Mining companies pay zero tax on diesel used in mining operations.

I am subsidising the mining industry.

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I would define a subsidy as one party propping another up financially.

You are paying money to the government in the form of excise. But you are NOT paying money to mining companies via this means and neither is government on your behalf.

So you are subsidising government and mining companies are not subisidising government via diesel excise. But I just don't see how you are subsidisng mining companies.

If you buy a carton of beer and I make home brew then the excise on your beer isn't subsidising my home brew. You are helping to fund government that's for sure, but you aren't subsidising my brewing.

Everyone oh so keen to shut down our manufactoring base !!

Just as well Australia has a natural affiliation with bananas huh ?

numbercruncher said:

Everyone oh so keen to shut down our manufactoring base !!

:

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I don't think it's necessarily that, NC.
Perhaps more just concerned about when the bail outs will stop.
e.g. we have ABC Learning and now the car industry (again in the case of the latter.) This is coming from a rapidly diminishing surplus.

I think a lot of people feel this is setting a precedent for other failed companies and it's pretty likely there will be more of these.

My opinion Auzzie cars are not complete rubbish, made well and perform well

We cannot compete with Asian cars ...True

Well then let Globalization begin

GM must die and so our car industry... if we can not compete

Let those who do something well produce and we will find a niche and have customers

Its not a one way street Cheers

Everyone is saying that we will continue with a property and mining boom because China will save us.

Well, let China saves us on this one as well and import cheap chinese cars and close all those useless Aussie car manufactures.

WBII

On one hand I agree, let them die. If something isn't profitable, move on and leave it to those that are.

That said, an indigenous automotive industry must have other benefits for the country than just it's impact on the bottom line. What about the experience and expertise in manufacturing and design and access to the technology that comes along with it?

Surely it has some worth from a strategic/defence point of view?

numbercruncher said:

Everyone oh so keen to shut down our manufactoring base !!

Just as well Australia has a natural affiliation with bananas huh ?

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The most logical industry to promote is the refining and upgrading of our raw materials , bit of a joke when copper gold conc. is shipped to Japan and we buy it back as copper wire etc.eg.( Newcrest Mining).
further manufacturing of these refined materials would then follow on as well..

also by maintaining the refining here instead of exporting the raw materials to the likes of china we can control the carbon footprint with better and innovative refining technologies instead of exporting pollution overseas...

in modern refining labour costs are low as most of the processes are computer controlled and automated
a lot of flow on industries would follow..

Macquack said:

Yes it is.

I have to pay excise on diesel I use in my truck (under 4.5 GVM).

Mining companies pay zero tax on diesel used in mining operations.

I am subsidising the mining industry.

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You definately are not subsidising the mining industry. The deisel tax rebate is for mining, farmers and fishermen, who get the tax back as they are not using the road system. Why should they be paying the tax to build and maintain roads if they aren't using the roads for flip sake?