Holden’s Exit May Put Australian Auto Industry in Peril

Holden’s Exit May Put Australian Auto Industry in Peril

GM and Holden’s announcement yesterday that they’ll cease their Australian operations in 2017 could put the Australian automotive industry in jeopardy.

GM’s announcement comes just seven months after Ford confirmed that it would be pulling out of the Australian market, and now Toyota believes that the move will put “unprecedented pressure” on parts makers. The Japanese automaker itself is now questioning whether or not it should remain in the country. Sales of Australian-made vehicles have dropped by almost half since 2007 due to an appreciating local currency and falling import tariffs.

SEE ALSO: Holden to Cease Operations in 2017

In Australia, automakers have about 150 suppliers that employ an estimated 42,000 people. According to the managing director of Holden, Mike Devereux, building cars in Australia was simply “not sustainable.” This year, just 10 percent of total auto sales in Australia were locally-made vehicles now that Australia is allowing imports in from Asia. Three decades ago, 80 percent of the vehicles sold in Australia were made in Australia. Holden’s Commodore, for example, was Australia’s best-selling car for 15 straight years before the Mazda3 took the crown in 2011. Now the Commodore is also behind the Hyundai i30.

According to Ford, costs for building a vehicle in Australia are double compared to Australia and four times those in Asian countries.

GALLERY: 2013 Holden Commodore Ute


[Source: Automotive News]

Discuss this story at our General Motors forum.