The end looms for local car manufacturers?

[Venomous1]

Originally Posted by jpd80

When the global financial crisis hit in 2009-10:
Toyota were doing near on $9 billion revenue to make a around $182 million profit
Holden were doing near $6 Billion revenue to make around $200 million loss

Ford were doing near $2.2 billion revenue to make around $16 million profit

Interesting figures at least still making Profit.

[jpd80]

Originally Posted by Venomous1

Interesting figures at least still making Profit.

Those media people saying Falcon/Territory are goners are assuming that the
cost levels from 2006-7 and 30,000 Falcons for break even are still valid but
the main thing Burela did was get production costs down and efficiency up
enabling Falcon and Territory to remain viable at much lower levels.

I think this is why Ford Australia is unruffled by a low January figure,
they know it's temporary and their costs are managed better but also
that imported Ford sales are mostly filling the perceived sales deficit.

Ford is not Holden, they have right sized production for much lower levels
so that they can better weather weaker sales. Holden on the other hand
have committed to more volume with Commodore and Cruze which is OK
but also carries an lot more fixed costs. This is not a criticism of either
car maker, just another interesting difference between the two.

[bobthebilda]

Originally Posted by jpd80

Those media people saying Falcon/Territory are goners are assuming that the
cost levels from 2006-7 and 30,000 Falcons for break even are still valid but
the main thing Burela did was get production costs down and efficiency up
enabling Falcon and Territory to remain viable at much lower levels.

I think this is why Ford Australia is unruffled by a low January figure,
they know it's temporary and their costs are managed better but also
that imported Ford sales are mostly filling the perceived sales deficit.

Ford is not Holden, they have right sized production for much lower levels
so that they can better weather weaker sales. Holden on the other hand
have committed to more volume with Commodore and Cruze which is OK
but also carries an lot more fixed costs. This is not a criticism of either
car maker, just another interesting difference between the two.

There maybe a perception that production costs have been right sized, but they may still have work to do in other areas.

The Ford dealership network in Australia is over twice the size of almost compatible seller Mazda. In fact Mazda probably have more cars going through its dealer network, as they are not reliant on fleet sales to any degree. You will probably start to see some drop off in affiliated Ford dealerships. The lower sales would be a double blow to dealers, on top of the shift from higher profit big cars to smaller profit, price sensitive, small cars.

[jpd80]

Originally Posted by bobthebilda

There maybe a perception that production costs have been right sized, but they may still have work to do in other areas.

The Ford dealership network in Australia is over twice the size of almost compatible seller Mazda. In fact Mazda probably have more cars going through its dealer network, as they are not reliant on fleet sales to any degree. You will probably start to see some drop off in affiliated Ford dealerships. The lower sales would be a double blow to dealers, on top of the shift from higher profit big cars to smaller profit, price sensitive, small cars.

Deaerships are not owned by motor companies, the franchises are sold to dealer principles who make day to day choices in what vehicles they want to sell. I used to work with a guy who's father was part owner in a Ford dealership, at the time he said his dad would gladly give up selling low return XTs for value added XR Falcons, this change in selling pattern was pushed by dealer principals...not Ford.

A lot of those fleet sales are not to taxis or large government fleets, they are 50/50 government and private fleets, most of those fleet managers still have service contracts with a Ford dealership... and lets not forget the biggest pretend fleet numbers come from novated lease holders....

Used cars still need to be serviced and a lot of those 3-5 year old ex fleet vehicles still go to Ford dealers for services.

[BroadyFord]

Abbott has just announced that the Libs would cut $500 million worth of car industry assistance to pay for cyclone/flood damage if they were in power.

This doesn't bode well for the industry whichever way you look at it. Hate to say it but I think the car industry will again be in the firing line when the government announces their cuts.

[flappist]

Originally Posted by BroadyFord

Abbott has just announced that the Libs would cut $500 million worth of car industry assistance to pay for cyclone/flood damage if they were in power.

This doesn't bode well for the industry whichever way you look at it. Hate to say it but I think the car industry will again be in the firing line when the government announces their cuts.

On the other hand I would give everyone a free GT-E if I were in power.

But neither me nor "budgie boy" have to back up anything we say with actual deeds as neither of us are in power.........bloody convenient really.....

[Lotte]

As someone starting out in the auto engineering industry, either in manufacturing suppliers (where i am now till i graduate) or working for an OEM, I sure as hell hope the industry stays alive for at least another 10-20 years.
Yes we have some of the best R&D, manufacturing etc in the world, however the companies have no clue how to budget forecast, and spend way too much on projects, which is essentially killing them. This is coming from not only my experience, but the experience of my mates who worked in industry last year. A company that comes to mind (no naming here) cut 'x' qualified engineers, to put on 'x' student placement engineers to cut costs, and still went way over budget....

[tezxr8man]

Why won't government just stand up and grow some balls?? put taxes and duties up on imported cars to offset the support of the local built cars,and cap imports to around 50%. Its so simple, and would make the industry more sustainable

[Wretched]

Originally Posted by tezxr8man

Why won't government just stand up and grow some balls?? put taxes and duties up on imported cars to offset the support of the local built cars,and cap imports to around 50%. Its so simple, and would make the industry more sustainable

Yes, that's right because everyone wants to drive a Falcodore.

[bobthebilda]

Originally Posted by tezxr8man

Why won't government just stand up and grow some balls?? put taxes and duties up on imported cars to offset the support of the local built cars,and cap imports to around 50%. Its so simple, and would make the industry more sustainable

Hey, why dont Ford and Holden just raise the price of their cars by $3000 to $4000 and everyone should be happy. People buy commodores and Falcons because thats the sort of cars they want, so they would be happy to pay the extra.

Its so simple, and would make the industry more sustainable.

[jpd80]

Originally Posted by bobthebilda

Hey, why dont Ford and Holden just raise the price of their cars by $3000 to $4000 and everyone should be happy. People buy commodores and Falcons because thats the sort of cars they want, so they would be happy to pay the extra.

Its so simple, and would make the industry more sustainable.

Bob, I believe we need to turn this around:.
If Toyota can build and sell Camry here for $28K and sell V6 Aurion version for around $36K
then why can Ford and Holden do the same with reconfigured Falcon and Commodore?

[vztrt]

Originally Posted by jpd80

Bob, I believe we need to turn this around:.
If Toyota can build and sell Camry here for $28K and sell V6 Aurion version for around $36K
then why can Ford and Holden do the same with reconfigured Falcon and Commodore?

We are picking up XR6's and SV6's for 36k. Which is pretty good considering the low volume of the models.

[bobthebilda]

Originally Posted by jpd80

Bob, I believe we need to turn this around:.
If Toyota can build and sell Camry here for $28K and sell V6 Aurion version for around $36K
then why can Ford and Holden do the same with reconfigured Falcon and Commodore?

Sorry JP, I might be misinterpreting what you have meant here, but, the Falcon and commodore arent competing with likes of the Aurion and the Camry. The 3000 commodores, 800 aurions. 1500 falcons and 2000 camrys (just used very rough figures) that are being sold each month are competing with the other 75000 cars that are being sold each month.

Not sure what dealers are offering, but toyotas own website has the cheapest Aurion on road at $39500 and camry at $34230.

We hear day in day out, that the Falcon or Commodore have unique features (whether it be power, room, ride comfort etc etc) that make people want to buy these cars. I dont see how the unique features disappear, when the price goes from $36990 to $39990. After all, its whats in the car that gives the manufacturer the power to sell the car at a price that people are willing to pay. after all, no one else is importing commodores or Falcons.

In fact, the $35000 to $40000 price range these days, would have to have one of the smallest selection of cars (as opposed to 4x2 and 4x4, or SUVs) to chose from, when compared to other ranges, further negating any migrational effect if the commodore or falcon (or aurion) were to be priced at closer to cost price.

I just dont see the logic that a 20 year old uni student should have to spend an extra $3000 to buy a barina or fiesta, because someone wants to put up tariffs to protect the manufacuring of a car/s that she (and alot of others) will probably never buy.

I did some comparisons the other day between a 1985 commodore and 2010 corolla sedan. The corolla width was 1760mm, the com was 1722mm. Cor height 1475mm, Com height 1378mm. In fact apart from length (commodore was 18cm longer) the corolla was bigger than the commodore in most respects.

Holden have probably realised that australian made cars, have tried to maintain sales by evolving and trying to be unique, but come to a conclusion that they just cant keep trying to force these cars onto people. They couldnt, over time, or in one foul swoop, turn the commodore into a car 300 kilograms lighter or $15000 cheaper (at risk of alienating all buyers), so they are moving to a cruze. Commodore will continue to be made, but you will never see another VE billion dollar baby, and they will just let the VE (VF) baby die a natural death.

But dont worry, the 2010 cruze is 185 kilos heavier than your 1985 commodore. Is 66 mm wider than the commodore, and is 101mm higher. Although it is about 110mm shorter (smaller engine, but more power).

Not saying that Ford decision not to build focus here was wrong. Just beleive the refusal will allow ford local production to die a less painful death than what will occur with Holdens local production due to cruze production.

Sorry for the waffle, and whilst I have tried to answer your question, I know I havent. I think it would take another full page of waffle.

[bobthebilda]

Originally Posted by vztrt

We are picking up XR6's and SV6's for 36k. Which is pretty good considering the low volume of the models.

There you go JP, I think VZ has answered the question. If he thinks a 36K XR6 of SV6 is pretty good value, then why wouldnt a 39K XR6 or SV6 be good value.

[jpd80]

Originally Posted by bobthebilda

There you go JP, I think VZ has answered the question. If he thinks a 36K XR6 of SV6 is pretty good value, then why wouldnt a 39K XR6 or SV6 be good value.

I's not just about the price it's the perception - not that I'd ever own one but Toyota have
big discounts on Altise and Touring at the moment, $27,990 and $29,999 respectively.

Bottom line: I want to see a Falcon variant replace slow selling Mondeo in Australia but not at the
expense of the current Falcon's sales, I would like to see a future Falcon bridge the two markets
by offering an expanded range and price downwards, not upwards...does that make sense?

[Franco Cozzo]

I don't like the idea of tarriffs restricting my choice, if Ford wants to survive then they should have something the customer wants. I look at the Falcon and first thing i notice is acres of hard plastics and its crappy stereo, lack of features for its price.

I've bought two new Fords in 2 years, just not Falcon, I nearly went over to the other side this time for the top spec diesel Cruze, but the dealership snubbed me off.

[bobthebilda]

Originally Posted by jpd80

I's not just about the price it's the perception - not that I'd ever own one but Toyota have
big discounts on Altise and Touring at the moment, $27,990 and $29,999 respectively.

Bottom line: I want to see a Falcon variant replace slow selling Mondeo in Australia but not at the
expense of the current Falcon's sales, I would like to see a future Falcon bridge the two markets
by offering an expanded range and price downwards, not upwards...does that make sense?

Toyota price their cars like the supermarkets price their goods. You put the price of milk or bread down, you put the price of petrol up to cover it.

Even if all input prices were the same for a Corolla and a Cruze, the Corolla will still cost $3000 to $4000 less than the cruze, just from the fact it comes from a factory making 400,000 units a year, and the cruze will come from one making 25,000 per year. They use the corolla and other cars to price shift other slower movers. Toyota australias last 2 profits have been $180 and $120 million. At 200,000 cars a year, they are only making on average $750 a car.

The Falcon can only appeal to who ever wants to buy it. You can use the $3000 (in subsidies / tariff protection) it gets, and in theory sell it for $3000 less than it costs to make (although you are only selling it for what competitiors can make theur car at), but it doesnt increase its appeal to a greater market. All it does is make the other suppliers decrease the price of their cars.

Similar with adding tariffs etc. You arent going to get a $22000 corolla, lancer, mazda 3 buyer to buy a falcon, even if you add $5000 to the price of these cars. And you wont get a $80000 land cruiser or BMW buyer to get a falcon instead if you add $5000 to the price of these cars.

[vztrt]

Car industry copping it from both sides in Canberra

http://www.goauto.com.au/mellor/mell...2578320020AC02

FCAI pleads with Gillard and Abbott to stop raiding auto aid funds

9 February 2011

By RON HAMMERTON

THE Australian motor industry returned fire at both sides of politics this week as Labor and Liberal leaders lined up to take slices out of automotive manufacturing and research assistance programs to help pay for Queensland’s flood reconstruction.

On Monday night, Federal Chamber of Automotive Industries (FCAI) president Mike Devereux – who is also chairman and managing director of GM Holden – wrote to Prime Minister Julia Gillard expressing the industry’s disappointment at the federal government’s decision last month to axe the Green Car Innovation Fund (GCIF).

On Tuesday night, FCAI chief executive Andrew McKellar teed off against Opposition Leader Tony Abbott for his proposal to hack $500 million out of the Automotive Transformation Scheme (ATS) that started just five weeks ago.

The industry believes both proposals put the local automotive manufacturing industry at risk by jeopardizing future investment by the Big Three companies and parts-makers.

They want both sides of politics to examine the long-term consequences of the cuts, which they say tilt the balance of manufacturing programs in favour of other countries.

At the heart of the issue is the breaking of agreements and resultant snapping of trust between the global head offices of the companies and Canberra.

The GCIF and ATS were both part of the Rudd Labor government’s $6.2 billion New Car Plan for a Greener Future that was trumpeted as securing the long-term future of the local industry after the 2008 inquiry headed by former Victorian Labor premier Steve Bracks.

At the time, Prime Minister Kevin Rudd invited the Australian CEOs of the three car-makers to the Lodge in Canberra and asked for letters from the head offices of all three companies promising to commit to Australian manufacturing.

In return for industry assistance, the car-makers agreed to cop a range of reforms, including tariff cuts that have reduced protection to five per cent (and to zero for products from Thailand, which has a free-trade agreement with Australia).

The industry is angry that the Gillard government has broken that agreement by knifing the GCIF to siphon off $429 million to flood reconstruction in what the companies regard as a move that could cause major long-term pain in Victoria and South Australia – the auto industry heartland – to fix a short-term problem in Queensland.

On Tuesday, the Opposition weighed in with a proposal to go even further by reducing available funds in the $3.4 billion ATS by $500 million, with Mr Abbott saying that would return automotive industry funding to the levels of the Howard government in 2007.

"It removes the additional assistance to the motor industry that the Government has provided largely through the stimulus package," he said.

Mr McKellar responded by describing the proposal as ill-advised, saying it would severely damage the local vehicle manufacturing industry.

“To cut funding from the Automotive Transformation Scheme would endanger existing and planned investment projects and potentially put thousands of jobs at risk,” he said.

“Other countries are bending over backwards to attract new automotive investment and it is essential that Australia must continue to strive to retain a reputation as an attractive place to do business in.”

GoAuto understands Mr McKellar was today seeking a meeting with Mr Abbott to plead the industry’s case for retention of the ATS in full.

Ironically, innovation and industry minister Senator Kim Carr, whose government deleted a total of $926 million in automotive assistance programs last week, accused Mr Abbott of again demonstrating his profound hostility to Australian manufacturing.

He said the proposal showed his callous disregard for the future of the automotive industry and the 200,000 workers and their families who depend upon it.

“The ATS underpins the automotive industry in Australia,” he said. “In South Australia alone it constitutes 2.5 per cent of state GDP.

“I trust Mr Abbott has had the courage to front the workers at Elizabeth and tell them he intends to put their jobs on the line.”

Senator Carr said that under Labor, despite the “hard decision” to axe the GCIF, the government’s support would continue.

“I’ve spoken to the companies, to workers and to unions to affirm that our commitment to the automotive industry remains strong, and the bulk of the funds in the government’s New Car Plan remain intact,” he said.

“It’s a disgrace that Tony Abbott sees this as an opportunity to sacrifice the gains we made through the New Car Plan by slashing funding to pre-2007 levels.

“Only Labor understands that manufacturing is vital to a broad-based and sustainable national economy.”

Apart from the $429 million GCIF, the government also axed the ‘cash for clunkers’ Cleaner Car Rebate scheme that was an election promise, as well as slicing $96 million from the LPG conversion rebates scheme by capping it to 25,000 claims a year.

Senator Carr reportedly was unaware of the cuts that were decided by Ms Gillard’s inner cabinet circle, just days after Senator Carr announced the latest GCIF grant, $3.5 million to Melbourne’s Alternative Fuel Innovations to develop LPG injection systems.

[uranium_death]

Australian Industry is dying everywhere.
We have a massive wool industry. We ship that wool overseas, and it's sold back to us at an increased cost.
We export leather - imported back here as expensive Italian wallets, handbags etc.

Many Australian furniture businesses close down because you can get the same stuff from China for a lot less!

For me, it is inevitable that fully-Australian cars will eventually disappear. Wages go up, expenses go up, and there is more competition from foreign cars now.

If Hyundai had an AWD, I reckon they'd kick ****. They're building some nice cars at the moment, and always improving.

Perception also plays a role. People still would prefer to get a C-Class Merc over a G6E or Calais-V, despite it being a fairly ordinary car. (I've been in them before - concrete seats, lawmower engine...ugh).

And the trend is continuing to go against Australian industry...

[bobthebilda]

Ironically, innovation and industry minister Senator Kim Carr, whose government deleted a total of $926 million in automotive assistance programs last week, accused Mr Abbott of again demonstrating his profound hostility to Australian manufacturing.

He said the proposal showed his callous disregard for the future of the automotive industry and the 200,000 workers and their families who depend upon it.

Now I know I have been critical of the governments unaccountability when it comes to wasting money on the auto industry. But when the Minister for Innovation comes out and says 200,000 workers are dependant upon it, then you just hope he has some accountants helping him with the money dispensing machine. Now I know why the local manufacturers lose money, it took 200,000 people to make 235,000 cars last year.

[BroadyFord]

Why don't the VIC and SA governments pitch in some funding if it will have such a detrimental impact on their states instead of relying on the federal government?

Even just $200 million each would get back what was in the GCIF and perhaps restore confidence in the sector.

[vztrt]

Originally Posted by BroadyFord

Why don't the VIC and SA governments pitch in some funding if it will have such a detrimental impact on their states instead of relying on the federal government?

Even just $200 million each would get back what was in the GCIF and perhaps restore confidence in the sector.

Didn't the Vic government put money in to keep the engine plant running??

[Fireblade]

Originally Posted by BroadyFord

Why don't the VIC and SA governments pitch in some funding if it will have such a detrimental impact on their states instead of relying on the federal government?

Even just $200 million each would get back what was in the GCIF and perhaps restore confidence in the sector.

SA Government has been putting millions into Auto manufacturing in SA for many years, they propped up Mitsubishi for a long time until it just became unviable to do so considering Mitsi's commitment to shutting up shop in Australia, and have handed Holden many millions over the years too.

[bobthebilda]

Originally Posted by vztrt

Didn't the Vic government put money in to keep the engine plant running??

I think the various states have normally contributed about 30% of what the federal government has for certain things. Ie to make cruze, feds gave about $120 million, state about 30 to 40 million and Holden (cough cough) apparantly the rest.

The states tend to be the better contributors when it comes to buying the cars for their fleets.

[Bud Bud]

Originally Posted by jpd80

Bob, I believe we need to turn this around:.
If Toyota can build and sell Camry here for $28K and sell V6 Aurion version for around $36K
then why can Ford and Holden do the same with reconfigured Falcon and Commodore?

Hmmm the only way a Falcon or Commodore could be reconfigured to match a Camry or Aurion's build cost is to reconfigure the driving wheels from the rear of the vehicle to the front. It will always be cheaper to build a front wheel drive vehicle over one that powers the rear. I would have also thought that considering this single factor, then an XR6 or an SV6 at $36,000 is good value anyway.

Apples and Oranges!

Bud Bud

[JG34JA]

Firstly I'd like to point out Bobthabilda is, I assume, a builder. Building and construction were bailed out in a panic move by the Rudd Government in 2008 with the First Home Vendors Bribe. They are not a free market; a free market would have let their industry crash as a wave of fear swept the globe for the banking system was insolvent. This building crash did not occur. Building residential dwellings does nothing to create gains in productivity in a society, for the dwellings are for the vast majority not part of the nation's Production. Building plant equipment does. Indeed, this is one of the reasons why dwelling prices can reach levels of 10 times average earnings (1-3 is the average throughout the 20th Century and sanity); and there is not a commensurate 'wealth' effect spreading throughout society except for those speculating in such an activity. That, friends, is a bubble.

Secondly, the author of the SMH article is spot on. As a historian by initial training, I know exactly what Australia was prior to the Great Depression. It was a resource economy, supplied by foreign capital. That is all. When the mainly British lenders called in the loans in 1932, and Jack Lang suggested delay, we came very close to our own little revolution. The loans were repaid, for foreign capital rules. The fracas that was the 1930s, in the wake of the Wall St bubble popping in 1929, became one of competing nation states, tariffs, and eventually war.

We are witnessing the beginnings of this now, in the initial stages of currency war this time. Australia has been reamed for a decade by currency manipulation and other tactics as it is - while we played 'free market, low tariffs', they went 'Thanks!' and took our manufacturing base.

So understand that in 1929 Australia marched into Depression as a resource economy reliant on foreign capital, and importing foreign goods.

The young adults who lived through these tumultuous years became the great civic policy makers of the Post War era. They understood just how badly the country suffered, and determined to make sure it would never happen again.

They created a Commonwealth Bank to ensure that domestic capital would be available to fund Australian projects within Australia. This guaranteed independence from the wholesale international markets. Later a Reserve Bank was split from this institution.

They created a tariff protected manufacturing industry. There were guidelines as to how local content would increase (it was at 95% when the LC Torana was released in 1969, and would go higher in some makes). Many of the industrial towns in SA were created in this time. The nation flourished with auto makers actually encouraged to set up shop and manufacture (what Thailand and others do now, for example), and Land Rovers, Minis, Renaults, Nissans, and others were assembled or made here. People took home their pay and spent it in the economy. This all sounds very socialist and centrally planned, but incredibly it worked. The nation became a manufacturer and exporter to Asia. Holden even had its own ship! Textiles, steel, chemicals, petrol refining, you name it.

They created agricultural schemes and expanded agriculture enormously. The upper WA wheatbelt, on Kangaroo Island, the Murray-Darling's "fruit bowl" are some examples I have seen. The agricultural sector flourished in this time.

National telecommunications were provided, and a brilliant system spread the country through the PMG. Later to be Telecom, and now you know its name. I've worked on it, and for its era, it is a great system.

Education was free. The nation was rich enough to do this by 1972. Health care was in better shape than it is now. Why? Because the nation was productive and wealthy enough; indeed, in 1971 Australia and Canada both had the highest living standard in the world.

Mining, at this stage, had a lesser role, the NW ore fields were being discovered in this time.

I might add the currency was fixed for much of this time too, allowing businesses to calculate into the future without wild fluctuations undermining decisions.

During the 1970's, there was a deliberate change in policy, to export the manufacturing base of the Western world to the developing world. It was eagerly taken up by these economies, who are essentially mercantilist. Look it up if you like; we signed it against our nation's interests. Today is the inevitable result of such a policy. Since about 1980 Australia has lived through floating currency, the Button Industry Elimination Plan (played nicely into a collective inferiority complex), the emergence of the speculative FIRE economy (Finance, Insurance, Real Estate), deregulation, debt (Australia was 95% foreign owned in the late 1990s when the stat stopped being reported I believe), hocking of national assets such as the very valuable Commonwealth Bank to clear public debt, a mining boom, and an increasing reliance upon cheap foreign capital to fund our lifestyle, which is in deficit. This is because we consume more than we earn. This in turn is because we took all the Production we had created and destroyed it.

So in 2011 the Australian economy emerges as a resource economy, reliant on foreign capital, consuming more foreign produce than we earn the right to.

Sound familiar?

So yeah, let's kill what is left of the manufacturing industry. Our grandkids will have to rebuild it.

[4Vman]

Gee we're a real positive cheery bunch around here.. i think ill go read the housing price thread to pick my self up.. oh.. wait....

[prydey]

why do people bang on about supporting australian made when you do the grocery shopping or buy electrical goods or furniture or whatever so that the profits stay in the country. woolies and coles are often the enemy who are putting the decent hard working aussie in his little corner store out of business. bunnings is making it more and more difficult for the small shop to survive.

do these smaller shops just not make the products people want? is it because coles and woolies sell products that people want that encourages people to buy there instead?

why is everyone so passionate about supporting australian made.........

UNTIL

the automotive industry is mentioned. then the australian made thing just gets hammered left right and centre. apparently now its australia's fault that they don't manufacture things cheaper or better or smaller or bigger or whatever.

imported cars roll out the door because they are cheap. if an import costs the same as an aussie built car, they would not sell as many. its not about 'more features' or 'better quality' etc etc. its about price.


having said that, it is also about choice. in a country of 20million people, we have nearly every car manufacturer selling cars in this country. once upon a time you had the choice of small or large car. these days are gone. there is now a car size to suit every specific need. also, air travel is cheaper than it has ever been so many people realise they don't need that larger car for those few interstate trips because they can just fly over instead. the large car segment is shrinking. there's not a whole lot you can do about it. there are many on here that see the lower sales figures and jump to the conclusion that its the specific fault of the model of car. i say it isn't.

large cars are being purchased by those who want or need a large car. if people want the falcon to sell more, but remain a large car, i'm not sure what they expect to happen.

no one wants to jump on board a sinking ship. the portrayal in the media, as it was with mitsi, is that ford is struggling. in australia, ford is considered the falcon car company. journo's paint a very poor picture of falcon and then start putting nails in ford's coffin. the general public soak it all up like its gospel. just before its demise, the 380 was the most optioned up car in its class by some margin. they also had the best (still do) warranty of all local products and yet still no one bought them. its a vicious cycle that once started, is hard to stop and the media seemingly trying hard to start that cycle with falcon.

large cars are now a niche vehicle. they have become what the lwb cars were. as pointed out many times, the dimensions of the cars in mid size segment are very similar but are perceived to be much smaller. these are the new 'family cars'. unfortunately changing the dimensions of falcon to be a smaller car could steal sales from within which ford probably won't be keen to do.

[cheap]

My 2 cents worth...

There will be always an automotive industry here is Australia. It may shrink but it will always be here.

It isn't just about who can build things the cheapest. If it was about cost then every car manufacturer in every country would simply close shop and build cars in China.

Every nation with a car industry fights tooth and nail to retain this manufacturing base, every nation to some degree provides protection/assistance too. Why, because these countries recognise there is significant engineering technology in the form of plant, machinery and intellectual capital required to build and maintain complex machines. The by-products that come from building cars are immense, for example universities and colleges teaching staff, research/development, highly skilled workforce and occasionally generating the export dollar or two.

Its in Australia's national interests politically, socially and security wise to retain this technology base (read what you may of security...)

Anyone who thinks that Australia can afford to turn off this small (but significant pool of technology) and become a total consumer/services nation needs to have their head examined.

If however, a future government were not to support the local car industry and allow the lights to turn off on this segment, then in my opinion that government has sold out our nation, they have committed treason!

[charles_wif_xf]

Originally Posted by cheap

If however, a future government were not to support the local car industry and allow the lights to turn off on this segment, then in my opinion that government has sold out our nation, they have committed treason!

The government of Australia commited treason the moment they created the RBA but thats a story for another time.

Originally Posted by JG34JA

Firstly I'd like to point out Bobthabilda is, I assume, a builder. Building and construction were bailed out in a panic move by the Rudd Government in 2008 with the First Home Vendors Bribe. They are not a free market; a free market would have let their industry crash as a wave of fear swept the globe for the banking system was insolvent. This building crash did not occur. Building residential dwellings does nothing to create gains in productivity in a society, for the dwellings are for the vast majority not part of the nation's Production. Building plant equipment does. Indeed, this is one of the reasons why dwelling prices can reach levels of 10 times average earnings (1-3 is the average throughout the 20th Century and sanity); and there is not a commensurate 'wealth' effect spreading throughout society except for those speculating in such an activity. That, friends, is a bubble.

Secondly, the author of the SMH article is spot on. As a historian by initial training, I know exactly what Australia was prior to the Great Depression. It was a resource economy, supplied by foreign capital. That is all. When the mainly British lenders called in the loans in 1932, and Jack Lang suggested delay, we came very close to our own little revolution. The loans were repaid, for foreign capital rules. The fracas that was the 1930s, in the wake of the Wall St bubble popping in 1929, became one of competing nation states, tariffs, and eventually war.

We are witnessing the beginnings of this now, in the initial stages of currency war this time. Australia has been reamed for a decade by currency manipulation and other tactics as it is - while we played 'free market, low tariffs', they went 'Thanks!' and took our manufacturing base.

So understand that in 1929 Australia marched into Depression as a resource economy reliant on foreign capital, and importing foreign goods.

The young adults who lived through these tumultuous years became the great civic policy makers of the Post War era. They understood just how badly the country suffered, and determined to make sure it would never happen again.

They created a Commonwealth Bank to ensure that domestic capital would be available to fund Australian projects within Australia. This guaranteed independence from the wholesale international markets. Later a Reserve Bank was split from this institution.

They created a tariff protected manufacturing industry. There were guidelines as to how local content would increase (it was at 95% when the LC Torana was released in 1969, and would go higher in some makes). Many of the industrial towns in SA were created in this time. The nation flourished with auto makers actually encouraged to set up shop and manufacture (what Thailand and others do now, for example), and Land Rovers, Minis, Renaults, Nissans, and others were assembled or made here. People took home their pay and spent it in the economy. This all sounds very socialist and centrally planned, but incredibly it worked. The nation became a manufacturer and exporter to Asia. Holden even had its own ship! Textiles, steel, chemicals, petrol refining, you name it.

They created agricultural schemes and expanded agriculture enormously. The upper WA wheatbelt, on Kangaroo Island, the Murray-Darling's "fruit bowl" are some examples I have seen. The agricultural sector flourished in this time.

National telecommunications were provided, and a brilliant system spread the country through the PMG. Later to be Telecom, and now you know its name. I've worked on it, and for its era, it is a great system.

Education was free. The nation was rich enough to do this by 1972. Health care was in better shape than it is now. Why? Because the nation was productive and wealthy enough; indeed, in 1971 Australia and Canada both had the highest living standard in the world.

Mining, at this stage, had a lesser role, the NW ore fields were being discovered in this time.

I might add the currency was fixed for much of this time too, allowing businesses to calculate into the future without wild fluctuations undermining decisions.

During the 1970's, there was a deliberate change in policy, to export the manufacturing base of the Western world to the developing world. It was eagerly taken up by these economies, who are essentially mercantilist. Look it up if you like; we signed it against our nation's interests. Today is the inevitable result of such a policy. Since about 1980 Australia has lived through floating currency, the Button Industry Elimination Plan (played nicely into a collective inferiority complex), the emergence of the speculative FIRE economy (Finance, Insurance, Real Estate), deregulation, debt (Australia was 95% foreign owned in the late 1990s when the stat stopped being reported I believe), hocking of national assets such as the very valuable Commonwealth Bank to clear public debt, a mining boom, and an increasing reliance upon cheap foreign capital to fund our lifestyle, which is in deficit. This is because we consume more than we earn. This in turn is because we took all the Production we had created and destroyed it.

So in 2011 the Australian economy emerges as a resource economy, reliant on foreign capital, consuming more foreign produce than we earn the right to.

Sound familiar?

So yeah, let's kill what is left of the manufacturing industry. Our grandkids will have to rebuild it.

Very astute observation JG34JA. Rep for you.