Australian farmers / growers

Yeah I understand you didn’t mention tariffs, but what you are suggesting is effectively the same thing. You are adding a cost to the import of goods. In your case the cost of building the 1500 cars locally would have to be amortised over the whole 10,000. Our market would no longer be open and you would once again be protecting an inefficient industry.

Also, the cost of setting up a factory to build such low volumes would be very high and so the most likely effect would be that the importers leave the market - certainly all the small importers would. (I realise the 1500 is just a number, but building a small proportion of a small total volume wouldn’t make economic sense.) You need someone with a market volume like Toyota to make it viable and even they couldn’t seem to make local manufacturing work.

Cheers,
Jon

The unseen benefit of maintaining a local manufacturing industry is in the event of war, that industry can quickly change over to supporting the war effort.
I'm not saying there will be a war, but none of us has a crystal ball (that I know of).
Can you imagine relying on S.E. Asia to supply us with tanks, planes, ships et al? It didn't work out well when A.D.F. got boots from China!
Australia manufactured some world class gear in the post war years, Sidchrome being a good example.
I'm sure JD and Bigbjorn could compile an impressive list, with little effort.

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Originally Posted by jon3950

Yeah I understand you didn’t mention tariffs, but what you are suggesting is effectively the same thing. You are adding a cost to the import of goods. In your case the cost of building the 1500 cars locally would have to be amortised over the whole 10,000. Our market would no longer be open and you would once again be protecting an inefficient industry.

Also, the cost of setting up a factory to build such low volumes would be very high and so the most likely effect would be that the importers leave the market - certainly all the small importers would. (I realise the 1500 is just a number, but building a small proportion of a small total volume wouldn’t make economic sense.) You need someone with a market volume like Toyota to make it viable and even they couldn’t seem to make local manufacturing work.

Cheers,
Jon

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CKD packs are much cheaper than CBU units. No tariffs, no customs duty make them increasingly attractive. The factories will not be expensive being assembly plants not manufacturing plants with extensive foundries, machine shops, engineering and drawing offices, prototype shops, proving grounds. They will employ lots of semi-skilled and unskilled workers who otherwise would be long term dole recipients. Instead of sucking up taxes they will be paying tax and have more money to spend. Crime drops where people have steady work. The employment is not restricted to the assembly plants. Many items will be easier and cheaper locally sourced from outside suppliers to the benefit of local industry and employment. Logistics sectors will likewise benefit. Think of the benefit accruing to a small country city from a good size assembly plant employing 1,000 bread winners + another few hundred in associated workplaces. The smaller volume sellers will still be here. No export sales manager in Europe, Asia or wherever would pass up an import quota to a first world country. The volume involved may well save his job. "If you don't sell something this month you are gone". Every salesman in the world has had this threat. V8Ian is correct. We need a sound industrial base for national security.

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I never mentioned tariffs. I said restrict imports by a quota system. You want to sell it here then you make it here. I agree that tariffs are bad. Tariffs protect inefficient industries, concentrate profits to a few operators who become very wealthy by pricing up to the maximum the tariff will allow. Check the history of many clothing, textile, and footwear sectors.

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Ah Bigjohn , I assume you are young and do not know the history of the motor industry.

Tariffs and quotas caused the debacle that was Holden and Ford.

CKD production is incredibly expensive as the car has to be assembled twice, once into a container and once again in a plant. That is of course if the Poms actually put car lots into a container complete.
There was mandatory local content so windscreens and tyres , and batteries were sourced locally. That is what sustained Pilkington, Bridgestone , and battery makers who made products that were small scale and expensive as they had a captive market.

At Ford we used to make more on an air conditioner than an Escort.

Ah Quotas.
I used to go around every importer buying quotas in my days in BMW. I bought some from Morgan, and we had a windfall by buying a lot or 1500 from the Fiat importer who had given up.

We used to import BMWs with no radios as the tariff on the car was 57% whereas for a radio it was 25%. Such are the distortions created.

No local CKD is not an answer unles you want 50K Mazda 3s and 100K electric cars.

Regards PhilipA

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Originally Posted by PhilipA

Ah Bigjohn , I assume you are young and do not know the history of the motor industry.

Tariffs and quotas caused the debacle that was Holden and Ford.

CKD production is incredibly expensive as the car has to be assembled twice, once into a container and once again in a plant. That is of course if the Poms actually put car lots into a container complete.
There was mandatory local content so windscreens and tyres , and batteries were sourced locally. That is what sustained Pilkington, Bridgestone , and battery makers who made products that were small scale and expensive as they had a captive market.

At Ford we used to make more on an air conditioner than an Escort.

Ah Quotas.
I used to go around every importer buying quotas in my days in BMW. I bought some from Morgan, and we had a windfall by buying a lot or 1500 from the Fiat importer who had given up.

We used to import BMWs with no radios as the tariff on the car was 57% whereas for a radio it was 25%. Such are the distortions created.

No local CKD is not an answer unles you want 50K Mazda 3s and 100K electric cars.

Regards PhilipA

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I am 78 and I spent much of my working life in Australian motor manufacturing and marketing. I know there was a market in quotas. My intent is that quotas would be issued to a importer and not be traded. If you don't use the quota then it lapses. GM-H used to sell theirs as they were not inclined to be importers. CKD packs of Bedford trucks pre-containerisation came in big wooden boxes containing eight trucks. Don't forget those glass, battery, tyre, and much else suppliers employed thousands of Australians. Lucas and Bosch manufactured here to supply the new vehicle industry. I don't know if Hella still do. I personally don't care if Mazda's cost $50,000 if the result is minimum unemployment and increased prosperity and security for Australians.

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CKD packs of Bedford trucks pre-containerisation came in big wooden boxes containing eight trucks.

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That is not CKD but AFAIR is called Partially Assembled.
So what value was added? This was usually done to reduce shipping costs .
The value added would have been very small.
You may like 50K Mazdas but I bet the majority of the population wouldn't.

The other big disadvantage of CKD is that the quality of the product would fall dramatically as the computer aided assembly processes used today would be far too expensive to install. The capital cost would otherwise be horrendous.
I recall wondering why my locally assembled Mazda 323 in Malaysia had extensive denting of the firewall. I looked at another car and it was the same. Then it hit me. The bucks were so bad that they had to hit the firewall into place with sledgehammers!
Regards PhilipA