AUTOMOTIVE INDUSTRY OF AUSTRALIA

Automotive Industry of Australia

Abstract

In this study, we have done the analysis of Australia's Automotive Industry for the year 2009 and estimated the results for the year 2010. This assignment is divided into six parts. Part 1 consists of background of the automotive Australian industry, its status as per 2009 and economic outlook of Global automotive industry. Part 2 describes the latest changes of government in trading policies in terms of tariffs and subsidy effective from 2010 and its impact on producers, consumers, price and quantities of total motorcar vehicles. Part 3 explains the Australian market trends as per seasons and estimation regarding 2010 market trends for the industry. Part 4 analyses the regression model for the quantity demanded of motorcar vehicles and its dependence on other factors. Part 5 shreds light on the future prospects and outlook of the Australian Automotive industry and its policies.

Table of Content

Abstracti

Part1: Background1

Australian Automotive Industry1

Global Automotive Industry2

Part2: Government Policy2

Impact of Tariffs via Demand and Supply dynamics3

Impact of Subsidies via Demand and Supply dynamics6

Part 3: Australian market trends8

Analysis of Seasonal trends in the Industry11

Forecast of Motor Vehicles sales in 2010.12

Part 4: Structural modeling of Australian motor vehicle sales12

The linear Regression Model12

Part 5: Future industry prospects16

References18

Automotive Industry of Australia

Part 1: Background

Australian Automotive Industry

Australian Automotive Industry has witnessed growth after leniency in terms of quotas and tariffs, resulting in an increase in imports and exports. Australian market has more than 60 vehicle models so far. More than a million sales of vehicles has been recorded in 2007, which is 27% higher than 2002. It has also increased the vehicle affordability index by 84.8 as compare to 1995. The growth in automotive industry has levitated the operating costs including 400% increased oil prices, 33% increased petrol prices. But these effects can be offset with the appreciated Australian dollar value (Review of Australia's Automotive industry, 2008, p. 9-30).

Consumers' choices in vehicles types have been changed locally, now people prefer car that consume less fuels and are medium sized. These deviations have resulted in a change in vehicle producers locally, their market share decreased by 17% in 2008. In addition, vehicle manufacturers also observed a loss in market share of 88% in 2007. 113,807 and 37,073 units, made in Australia were sold to private government buyers. The automotive manufacturing sector contributes 0.6% to national gross domestic product (GDP). GM Holden, Ford Motor Company of Australia and Toyota Motor Corporation Australia are the major market players possessed by overseas' companies. Production of vehicles decreased by 5% in 2007 from 2000. MVPs rely heavily on foreign component producers from the past few years, that's why its imports has increased by 74%, as a result, domestic component producers are moving towards foreign market, and made only 81% sales in local market in 2007.

There are three major assemblers and other manufacturers as well and collectively they depend on input producers of Australia. 5% tariff is applicable to truck manufacturing sector after 1990s reforms. MVPs total losses were $449 million in 2007, component ...