Holden to leave Australia in 2017
Tis the season to be jolly, tra la la la la, la la la… Wait a second.
Christmas is just around the corner, and yet the news I bring you is neither festive nor jolly. It has been announced that General Motors is to stop the production of motor cars in Australia as of 2017. Holden has been an established brand in Australia for the last 65 years. Where the manufacturing may be shipping out to other lands, GM have said that they will retain a sales and parts distribution division in the country.
The Holden Pontiac GTO
So what are the reasons behind this announcement? But more importantly, what are the consequences?
Let’s begin with the explanation…
In a statement provided by General Motors, they said, “The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country”. Australia is facing an exponentially growing crisis in the motoring sector. For some time, car makers have been struggling despite subsidies given to the industry by the government. The help may have been flooding in from the government, but despite all of this the drought continues. As a result, serious talks are taking place as to whether the government should abandon the car industry altogether.
But wait, why is the car industry struggling?
In many ways, it is through the strength of the Australian economy that the car manufacturers are deciding to leave. For example, the Australian dollar has raised 30% against the US Dollar in the last few years. Following this, the domestic market in Australia is small which means that companies are left competing for what is after all a very small share. I am no expert on economics or marketing, but with a small domestic market, it can only mean small growth. Not only this, with the small market, one of the only ways to make any form of end money is to demand high manufacturing costs. Hardly very attractive for big business really now is it?
As a result, over the last 30 years, the number of cars produced in Australia has more than halved.
What does this all mean for the future of the car industry in Australia?
Thats right… That is Mount Doom for the Australian car industry
In short, it casts a catastrophic spell of destruction.
This whole debacle could indeed be the trigger that releases a deadly chain reaction of events that could bring about a sticky end to the Australian motoring industry. As it is, most of the cars sold in Australia are imported from across the world. This announcement from GM follows that made by Ford in May which stated that it would cease production in 2016. With Ford and Holden all but disappearing into the sands of time, this leaves Toyota as the sole manufacturer in Australia.
But come on on now, considering all this economic malarkey and the end of GM and Ford, it can only be a matter of time before Toyota follow a similar path. If the worst does indeed happen, with the suffering of the motoring industry comes the suffering of those who are involved with it. It has been estimated that over 50,000 jobs could be lost. That is never a number to be ignored.
Finally, with a current weak Japanese currency which makes exporting cars from Japan a lot cheaper, twinned with the fact that the Australian dollar is so strong could just be the icing on the cake of ultimate death and destruction. Rest in peace? Maybe.
So is there anything that can be done?
The current problem is that as with any economic issue that sweeps over a country, the reply is always to make the government “take steps for the future”. The problem I have with this is that it is more often that not an empty phrase. From my experience when these vacuous phrases begin to be thrown around, the next step is well… nothing. Nothing happens and then the infected area declines into nothingness. The sad fact of the matter is, that steps do need to be made. But the steps themselves need to be made a lot more clear.
If Australia wants to retain a manufacturing centre, then it needs a complete reinvention. The Australian economy needs a new image that will attract new business. I am going to be honest, I do not know enough about this kind of thing to offer a detailed answer. LEt’s be honest, if I could do that, I probably would be in a massively high paying job and be famous as the saviour of Australian motoring. However, I like to think outside the box. And as such I would like to draw your attention to the V8 Supercars.
The V8 Supercars may just be the answer that no one realised
It is one of the worlds top motorsport series, but with a little more pushing and development, I see it indirectly bringing about more business to Australia. I mean, Silverstone is the home of F1 and there are countless teams that base their manufacturing in the UK as a result of this. What the V8s need is a full on world series that brings the influence of the sport to countries across the world, especially all those rich western countries like the UK and the US. Show the majesty of Australia and see the results.
This post may have started negatively, but I do see that there is hope for the Australian car industry, it just may take some time that is all. But as they say, good things come to those who wait.
Keep Driving People!
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Peace and Love!
Level 2, 9 Help Street
Adam says:
Very interesting idea! Motorsport being used as a force for good 🙂
What I’d like to see happen is what happened with the SuperStars Series in Europe – have a domestic championship and an international championship in one calender. So in the Superstars series, whoever does the best in the rounds in Italy wins that title, and whoever does the best in the rounds in other countries is the International championship.
So what if V8s do the same thing? Have the domestic title as is, but have rounds in the US, Europe, wherever else, and award an International V8s champion.
Everyone wins! Bigger more expanded calender for drivers, teams and sponsors, more people get to see the awesome series, and it doesn’t loose it’s status as Australia’s premier racing series 🙂
December 19th, 2013 at 8:10 am
Australian Diesel Mechanic Magazine says:
Lewis it is very motivating & awesome idea for Australia automotive industry. But I am very sad when heard this news, General Motors will stop the production of motor cars in Australia in 2017, and it is very shameful for Australia’s government. Thanks for sharing this interesting blog.
January 7th, 2014 at 4:30 pm