In Australia, Ford, Holden and Toyota have recently declared their closing of car manufacturing; expected to occur by the end of 2017. As a result of high costs in manufacturing, highly competitive and domestic markets and the changes of consumer preferences; the three highest ranked car manufacturers in Australia - Ford, Holden and Toyota - will no longer manufacture their motor vehicles locally, but instead import them from outside of Australia. Toyota and Holden have announced to cease local motor vehicle production in 2017, following Ford who will stop manufacturing by October of 2016. The Government has financially supported the car industry over the past two decades. Reason being, a great amount of Australian’s population, specificaly …show more content…
Mitsubishi motors ceased production of all vehicles in 2008, leaving Ford, Holden and Toyota still producing vehicles. Mitsubishi Motors Australia CEO Robert McEniry stated that the decision to cease local manufacturing operations was based on "changing consumer behaviors and buying patterns" in the Australian market. Total production dropped dramatically from 2005 to 2014, to 215,926 (a decrease of 178 787 units). Total sales per annum has continued to increase from 2005 to 2014 by nearly 125,000 units. In 2014, the total number of all vehicles sold in Australia was 1,113,224. The high cost of automobile production in Australia has lead to all production ceasing by …show more content…
However, the support companies, manufacturers and services for each industry employ five times as many people; that is an aproximate 200,000 jobs as a whole (40,000 per industry). Consequently, these 200,000 jobs are forecast to be lost as a direct impact of the facilities closure, with a fall in GDP of $29 billion or more. In addition to these negative externalities, an issue that will rise in Australia’s economy will be the increase in taxes; the financial support of the car industry has to be offset through another means. Although there are many negative externalities that will arise as a result of the car manufacturing industry in Australia coming to an ubrupt end, positive externalities will be expected to occur too. For example; the money that the Government saves for the economy, rather than funding on Australia’s suffering car industries, may be used as an opportunity to invest in other industries. Furthermore, importing cars rather than manufacturing them locally results in a cheaper selling