Australia: Last of the car manufacturers to shut down plant

Holden, a subsidiary of General Motors and the last remaining car manufacturer in Australia, will be shutting down its Elizabeth car plant on October 20, 2017.

This will end the 69 years of car manufacturing for Holden in Australia. According to the company, 1,000 employees will be retained in the production, engineering and support departments. Since 2015, over 700 employees left Holden and the company claims that 80% of those have transitioned - either to other fields, are in training, retired or working as a volunteer within a year of their departure.

In October 2016, Ford shut down its plant citing lack of future demand. It ended the 91-year period of making cars in Australia. Established in 1925, the company has built over 43,00,000 vehicles in the country. The factory workers were paid up to AUD 2,50,000 (Rs. 1.27 crore) as compensation. The company will retain over 1,100 employees to design future models which will be built elsewhere.

Holden and Toyota were the last two surviving manufacturers till this month. Australia was the first country to have a Toyota factory apart from Japan which was shut down earlier this month. The company’s total production till 3rd October 2017 stands at 21,68,104 cars including 50,296 hybrid vehicles. Further, Toyota exported 12,45,914 cars from the Australian plant to their largest export market - the Middle East. Along with the cars, the company also made 25,35,963 engines for the domestic as well as export markets.

With very low (almost none) import duties on cars in Australia, many imported cars are either cheap, better equipped or both. Further, manufacturing in countries like Thailand is cheaper due lower labour rates. Cars made for exports are gradually decreasing with cheaper manufacturing facilities available around the globe. Many manufacturers will hence find it difficult to competitively price the made-in-Australia cars elsewhere.  

Sources - Car Advice