AUSTRALIAN AUTOMBILE INDUSTRY

The Australian Automobile industry

The Australian Automobile industry

Part 1—Background

The automobile industry of Australia has been extensively reformed, especially since 1985 when there is a huge influence of quotas and tariffs around 57.5%. The reduction in these problems certainly leads to industry rationalization and has made imports easily accessible to the customers of the region. These positive and brave steps made the automobile industry internationally more competitive and more importantly it has become export focused. The major example can be seen that in 2007, the automotive products exports in Australia reached in the top 10 export earners and made this sector ahead of wheat, wine and wool exports for the country.

The domestic automobile market of Australia has become extremely competitive as almost 60 different vehicle models are available for purchase. Because of this competitive structure it is also one of the most open market for automobiles in the whole world. The industry is not only involved in the vehicle production but major vehicle components, tools and designs are also produced efficiently. This industry has become an important part of the economy employing almost 64000 which is around 6% of the total manufacturing employment.

The automobile industry of Australia has now been proved as a globally competitive and integrated industry working in almost all sectors of vehicle production at almost every scale. The reason for such improvements in this sector is to achieve environmental and economic sustainability till 2020. This certainly provide the largest non - resource product to Australia. The automobile sector has increased to an extent that it provides 0.6% GDP to Australia. Almost 15 countries take cars from Australia from the concept to the full production. The truck and heavy automobile is the major part of their production that not only makes them self sufficient in vehicle production but also increases the GDP of the country simultaneously.

With the changing world and increasing oil prices in the world, a significant shift was seen in the consumer preferences i.e. shifting from higher fuel consumption to lower fuel consumption vehicles, which initially made a negative impact on the Australian automobile industry but later because of the tough competition made by the industry with the world, they adjusted themselves and started reducing the high scale production of sports cars. The profitability of the local MVPs had fallen, which creates a major challenge to the local industry. An example of this was seen in 2007, where the vehicle manufacturing losses reached to $722 million, which was 8.6% of the total sales.

The production of automobiles has not only increased in Australia but in the whole world. According to the statistics of 1999, around 56.5 million motor vehicles were produced globally and this number was reached to 70 million in the year 2007. Therefore, it can be quite clear that a huge competition exists in this industry globally. The industry is more influenced towards the industrialised countries where there is a cheap production available, which allows those people to earn maximum ...