Thread: Holden to close 30 outlets at the end of this year!

Originally Posted by Vern

Like land rovers?😉

No 4 Wheel Drives manufactured in Australia so if you wanted one you had to buy an import, most of the ones I own were at least assembled here with some local content......

The market here is too small but when you look back at the manufacturers that used to build/assemble here it was worthwhile at some point in the past. Was this due to import duties ?
In Japan cars are off the road within about 6/8 years unless you want to spend big dollars. This alone must drive the Japanese car industry and depress markets elsewhere in the World where their cars are sold secondhand with low Kms.

The big manufacturers are consolidating their production facilities, not profitable to have manufacturing in every market they sell in. I believe Ford UK don't build cars any longer, the last was the Transit which is now built in Turkey. I think they still build engines in the UK.
Years ago I was dealing with Ford at Dagenham, Basildon & Brentwood (never got to Southampton) and they were scruffy, dirty, tired looking facilities. I visited Mercedes about the same time and it was light years ahead, everything clean & modern.
I read somewhere years ago that Ford NZ stopped making cars and were set up to make alloy wheels for Ford Globally.

Nissan Castings in Dandenong cast parts for most car manufacturers, it's a business and couldn't support just making castings for Nissan.

Toyota want a vehicle for a particular market and they get all their plants to tender. Toyota here were producing cars for the Middle East, I was told that if they lost the contract one whole production shift would be lost.

I'm still running a locally built Ford for business, in 3/4 years time I have to find an alternative. The Asian car manufacturers have improved significantly so I guess if I'm still working it may be a Kia..........

Colin

Originally Posted by gromit

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The market here is too small but when you look back at the manufacturers that used to build/assemble here it was worthwhile at some point in the past. Was this due to import duties ?
.....
Colin

Combination of a number of things. Cars were built here initially because of import restrictions during WW1, which flat out banned the import of complete cars. This led notably to a Ford production facility in Geelong, which used engines and most other mechanical parts imported from Canada (Empire Preference), and the building up of Holden to manufacture car bodies for a variety of manufacturers in Adelaide, sourcing capital from GM in the twenties, leading to a majority GM ownership after 1929, but by 1939 they were making pressed steel bodies for a number of companies.

After WW2, massive tariff protection and a cash subsidy from the Commonwealth enabled mass production of the Holden 48-215, a small Chevrolet intended for release in the USA in 1943 or thereabouts but cancelled because of the war. The subsidy was conditional on close to 100% local content. The success of this venture led other manufacturers to negotiate a deal with the Commonwealth where they could bring in parts to assemble cars here with tariffs reduced according to how large a percentage of the final value was imported. Since the labour component of a completed car is very high, you can get the percentage up to around 80% just assembling, painting, and upholstering it. Ford, Chrysler, and later Toyota, Mitsubishi, and Nissan also got close to 100%.

This led to, as you suggest, a lot of manufacturers taking advantage of it. (VW, Peugot, Citroen, Austin, Morris, Renault etc) By the 1970s, however, as imports began to appear in spite of the tariffs, taking advantage of low wage countries (particularly Japan) and were better equipped, and in some cases at least, much more modern design than local cars, and better communications led to Australians questioning why they were paying so much more than most other countries for cars. After several other tries, this eventually led to the Button Plan, which attempted to get the local manufacturers to limit their production to one model per manufacturer and to phase out protection over a number of years. Which has now had the inevitable result of ending local manufacture.

Other factors running against local manufacture include the continuing pile of red tape around car design and manufacture, making the design of a completely new car beyond the resources of almost all single manufacturers, leading to takeovers, mergers and joint ventures, often across different countries. Continuing automation of manufacture means that increasingly cars can only be made on a very large scale, effectively ruling out manufacture in countries with small markets, unless they have something that makes them able to export readily and cheaply - Australia doesn't.