The last Toyota car produced in Australia is displayed for gathered workers in Melbourne, Tuesday. Photo: AP
business

Toyota ends production in Australia after half a century

22 Comments
By Trevor Marshallsea

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The global management consulting firm Boston Consulting Group ranks Australia the worst performer among 25 nations assessed in its worldwide manufacturing cost-competitiveness index. Costs are higher than in Germany, the Netherlands and even Switzerland, and Australian manufacturing wages rose 48% in the past decade while productivity fell, it says. Meanwhile, car output dropped by nearly half from about 400,000 cars in 2004.

Is that an indictment of Aussie productivity or what? Or lack of.

4 ( +5 / -1 )

Didn't Toyota just open a new plant in the US?

3 ( +3 / -0 )

Close one to open another. Delocalization named in a more political way.

2 ( +2 / -0 )

Wages in Australia are decent compared to Japan. Toyota Corp are except from tax in Japan and are chasing low cost labour where ever they can find it. Soon it will celebrate a workers 10 th birthday. Cheeper to import cars than pay a living wage to workers.

4 ( +5 / -1 )

TRUMP's "Auto Threatening Strategy" is working well now taking the toll from the aussies.

0 ( +2 / -2 )

How owns the last car?

0 ( +0 / -0 )

Strewth!!! That's a shocker!

This is not surprising. The cost of EVERYTHING in Australia is astronomical. It's simply too expensive to produce cars there.

3 ( +3 / -0 )

It was bound to happen. Costs/wages are so high in oz that it is extremely difficult for businesses to be competitive vs EU, Japan, the US and pretty much everyone else. To some extent, I think oz is victim of its own success.

Another big difference with other countries/markets, you rarely see workers taking to the streets like they do in Europe or the US to save their jobs. They often seem resigned to their fate and don't put (imo) enough pressure on bosses/govt.

0 ( +0 / -0 )

TRUMP's "Auto Threatening Strategy" is working well now taking the toll from the aussies. LOL no Trump cant claim that one , the writing was on the wall for the Australian auto industry over 10yrs ago. Australian government said enough was enough and went going to subsidies the auto industry anymore, if they cant be profitable by themselves then they dont deserve to stay afloat. Thing is all auto manufacturing countries subsidies their auto industries, the US is the most heavily subsidies in the world. Without the huge tax breaks, taxpayer bailouts to avoid bankruptcy the US auto industry would have folded long ago. Tesla for example was given a $ 1.3billion tax break by Nevada to setup their factories there.

2 ( +2 / -0 )

@elephant200: Did you read the article before posting and pointing blame? 'After looming for four years, "Carmageddon" has hit the Australian auto industry.'

Trump was not on the scene four years ago. Slow down and take a deep breath.

2 ( +2 / -0 )

Toyota is the last of the Japanese car companies to leave Australia. They had been losing money and laying off staff for over a decade. They also had a government bail out a few years ago. This has nothing to do with the cost of manufacturing in Australia. It is about how little profit Toyota could make and the lack of demand for new cars. That is why they pulled out. Nissan, Mazda and Mitsubishi all pulled out in the last 15 years or so. Now, they will have to compete with KIA and Hyundai for a slice of the Australian market, but because manufacturing costs are higher in Japan they will be unable to compete and lose the market. Australia also has a very high import tax on cars. Furthermore, the Australian market is flooded with secondhand cars. Unlike Japan, they do not have a life limit on cars and it's not uncommon to see 20 or 30 year old cars being driven around. Now, as the last foreign car company pulls out of Australia, secondhand cars will become even more expensive and popular. Blaming high manufacturing costs is just an excuse for losing the market to Korean made cars. The reason Japanese car companies set up manufacturing plants in Australia was to avoid the high import tax and to secure a place in the market. However, they could not compete with the Korean made cars for cost, even though the Korean cars were not manufactured in Australia and incurred the import tax.

-3 ( +1 / -4 )

Why not build a native Australian car company? Most vehicles are just clones of each other with an extra glitter of individuality. Can someone really tell a Toyota sedan from a Honda or Ford sedan? Make own parts within Australia too. I'm sure the laid off workers can get get their jobs back and that some were management. Make it a co-op too so everyone shares in the profits.

0 ( +3 / -3 )

Hope japan can somehow help the Aussies in some other way . . . to offset the loss of jobs to this neighboring country.

-1 ( +0 / -1 )

25 years ago when I moved to Australia. The most common cars you saw on roads were the Australian made Holden Commodore and Ford Falcon. Both are 6 cylinder 3.9L family cars. Petrol was only about A$0.60 per L. As petrol price keeps rising, people are switching to cars with smaller engines. Yet Holden and Ford still did not make 4 cylinder cars locally. Then the Aussie dollar went crazy in 2011, seriously hurting car exports. I would say that is the last straw.

Now, they will have to compete with KIA and Hyundai for a slice of the Australian market, but because manufacturing costs are higher in Japan they will be unable to compete and lose the market.

Not true. I bought a Mazda CX-3 last year and it is made at Mazda's Thailand factory. Honda cars sold here are made in Thailand. Kia does not have any top selling car here. While Hyundai only has i30 sells well. Japanese cars are actually dominating the Australian car market. Below is the list of best selling cars in Australia in 2016. The second figure is in 2015.

1.Toyota HiLux – 42,104 (up from 35,161)

2.Toyota Corolla – 40,330 (down from 42,073)

3.Hyundai i30 – 37,772 (up from 32,306)

4.Ford Ranger – 36,934 (up from 29,185)

5.Mazda3 – 36,107 (down from 38,644)

6.Toyota Camry – 26,485 (down from 27,654)

7.Holden Commodore – 25,860 (down from 27,770)

8.Mazda CX-5 – 24,564 (down from 25,136)

9.Mitsubishi Triton – 21,987 (down from 25,338)

10.Hyundai Tucson – 20,132 (up from 5390 [new model])

Australia also has a very high import tax on cars. 

Copy and paste from others articles:

The tariff rate for Australia's car industry is one of the lowest in the world. At just 5 per cent, it applies to passenger and light commercial vehicles and four-wheel-drives.

In India, tariffs are much higher, between 60 and 100 per cent. Thailand (80 per cent), Brazil (35 per cent) and China (25 per cent) also receive much more assistance.

Australian tariffs used to be just as high. In the early 1980s the import duty here was close to 60 per cent. But policy changes following the release of the 1984 Motor Industry Development Plan led to a progressive reduction in tariff assistance. That meant the tariff rate on passenger vehicles and parts declined by 2.5 percentage points each year between 1988 and 2000. There was another reduction of 5 percentage points in 2005.

3 ( +3 / -0 )

I think it's common knowledge within the English-speaking world that if you ever go to on vacation Australia for more than 2 weeks, you buy a beater Toyota with a broken headlight and shoddy brakes to drive around without insurance before ditching it in the parking lot at the airport on your way home. Beats paying for a rental, plus you can take it off road and go off jumps with it.

2 ( +2 / -0 )

I think the Australia Car manufacturers have paid minimum $ 35 per hour rate, over time, Saturday and Sunday double rates plus 7% Superannuation. Now all 3 cars Companies are moving away from Australia. Thanks to Union.

2017 - 2018 minimum wages for lowest paid worker was $ 18.50/hr for アラバイド in Australia. Next year will be $ 19.50/hr. How can employer afford to pay $18.50/hr for アラバイド?

The car Companies running away from Australia was not strange. However, Toyota and Holden have decided to close their factory was 3 years ago and not this year.

-3 ( +0 / -3 )

@Disillusioned dude so many things wrong with your post I dont know where to start, firstly Japanese vehicle makes ahve been in Australia for over 50yrs far longer than and Korean make so the brand recognition is far better. Second reliability, most Australians know if you want a reliable 4WD you buy Landcruiser Hilux or Patrol/Safari those models outsell all foreign rival by far, then youve got Camry/Corolla a very popular go to models for fleetcars, government cars and personal due to the fact that they can go for at least 200,000km unlike Korean models. Third Austalia car market isnt flooded with second hand cars anymore than Japan they just use their cars for far longer, why mainly becuase of the depreciation, Japanese market most models have lost half their value within 3~4 yrs and 80~90% their value in 10yrs regardless of the milage traveled. Australian cars depreciate almost twice as slow even with the added miles traveled, average Australian driver drives nearly twice as many km as a Japanese driver per year. Korean cars are junk after 5 yrs but are very popular as rental cars for the same reason and theyre cheaper than most J models. As Australian vehicle sales statistics show Japanese cars as a whole outsell any other country by far and that wont change anytime soon.

1 ( +2 / -1 )

Chop Chop even at $18.50 an hour it would be difficult to pay rent, utilities (which are very expensive) , food etc. I looked and your typical flat costs about $800 per month. I heard it is expensive to live in Austrailia. Making any less would make them homeless.

2 ( +2 / -0 )

Why not build a native Australian car company? 

Good question. I'd love to see more Tesla style car companies pop up.

Y'know, none to that dealership franchise scam.

0 ( +0 / -0 )

Why not build a native Australian car company?

That's explained in the article. Of course, they can have a carmaker in Australia if they manufacture the main parts of the cars elsewhere and import them like ikea furniture. That could be a profitable business, but that wouldn't create many jobs in Australia. You cannot have only one factory on a continent, because sub-contractors and distributors would not get enough orders to survive. And the cost of getting small parts coming from overseas is too important, either you pay an arm and a leg for small orders shipped by air or you need to buy big series, maintain a large stock. That's the same problem for attempts to make cars in Africa.

0 ( +0 / -0 )

elephant200, is everything Trump's fault?

0 ( +0 / -0 )

I think the Australia Car manufacturers have paid minimum $ 35 per hour rate, over time, Saturday and Sunday double rates plus 7% Superannuation. Now all 3 cars Companies are moving away from Australia. Thanks to Union. 

2017 - 2018 minimum wages for lowest paid worker was $ 18.50/hr for アラバイド in Australia. Next year will be $ 19.50/hr. How can employer afford to pay $18.50/hr for アラバイド?

Unions are to blame? Try living in the Australia on $18.50 per hour, pay a mortgage, pay sky-high utilities and send the kids to school. Not going to happen. The writing was on the wall long ago for factory jobs in Australia: there is simply no way they are going to compete with their neighbours to the north with far, far cheaper overheads.

Korean cars are junk after 5 yrs

The ones made in the 80s and 90s were - just as most of the Japanese ones in the 60s/70s were. The quality nowadays is very high. The KIA Stinger models in Aus in particular have a good reputation, and very long waiting list. Heck, Im even seeing more and more Chinese cars on the roads in Aus (mostly utility vehicles) and even they seem to be staying in one piece nowadays! Times change.

1 ( +1 / -0 )

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