Reasons Why Car Factories in Australia Closed Business

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Maybe some of you are wondering, is there something wrong with the Australian market so that several car manufacturers have closed their production facilities in our neighboring country. It is clear that the closure of the Ford, Toyota factories, and which will be followed by Holden too, gives a big question mark regarding the condition of the automotive market in Kangaroo Country, especially as all three have a long history in the Australian market.

Even though Toyota itself has become a large manufacturer in Australia, it is also the largest exporter in that country. Toyota exported more cars in the last 16 years than Holden did in the last 63 years. Of course there is nothing wrong with this achievement, in fact the Toyota factory in Australia was the first factory of this manufacturer to produce cars outside Japan at that time. And the size of automotive manufacturing in Australia is actually capable of absorbing 50,000 workers. But taxes say otherwise, even automotive manufacturers in Australia say they have to invest three dollars for one dollar of tax they pay.

Apart from that, competition in the Australian Automotive market can be said to be quite tight. Being a country with a less significant increase in car prices is a disadvantage for manufacturers who produce cars locally in Australia. Because workers' wages in Australia are higher than in Thailand, China or Indonesia. It is becoming easier for foreign-produced cars to compete with locally produced cars thanks to low import tariffs, or even no import tariffs. And with 64 brands competing in the Australian market, the fate of brands that rely on local production in Australia is uncertain.

The flow of imported cars at competitive prices means that car buyers in Australia have many choices. And with so many choices, the income of car manufacturers such as Ford, Toyota and Holden is reduced. The ending is clear, no manufacturer can survive with minimal sales figures. The Free Trade Agreement between Australia and Thailand also has an influence on this, not to mention the onslaught of brands from China which we know have attractive prices. Since the agreement itself, 2 million vehicles have entered Australia from exporting countries, and unfortunately Australia only exports a very minimal number of cars to this country, only 100 units.

Maybe it could be said that Australia is a soft market for world automotive manufacturers, but it is not a place that provides protection for manufacturers who produce locally there. And now Thailand is the second largest vehicle contributor after Japan in Australia. Finally, the manufacturers we mentioned at the beginning are famous for their fierce sedans, such as Holden with the Commodore V8, Toyota with the Toyota Aurion and Ford with the Ford Falcon, all of which are sold in Australia. However, the shift in tastes speaks for itself, the SUV market is now eating into the Sedan market which previously could be said to be the favorite in Australia.

So, this does not mean that a manufacturer with a long history such as Ford, Holden and Toyota in Australia will always face a smooth road. The role of the government as well as careful monitoring of competitors and regulations are still needed to face uncertain market conditions in the future. What do you think? Come on, share your opinions, friends.


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