Hope our luck doesn’t end now

Holden VF Calais

Holden will close its local manufacturing operations in 2016 according to the ABC. The national broadcaster says senior government ministers have confirmed their belief that General Motors, Holden’s parent company, has already made the decision to stop making cars in Australia.

For their part Holden is not making any comment and says its unlikely to do so until at least next week after it has faced the Government’s Productivity Commission. One of the issues concerning the future of Holden is the uncertainty over Federal Government subsidies, which it claims it needs to keep local manufacturing viable.

The elephant in the room seems to be that local carmakers—Holden, Ford and Toyota—aren’t making cars that people want to buy. A criticism aimed more at Holden and Ford, rather than Toyota, which is comfortably the country’s best selling manufacturer.

Local car making peaked in 1970 when around 475,000 vehicles were made. By 1980 that number had dropped to 360,000. In recent years the industry last peaked in 2005 when almost 390,000 cars rolled off the line. By 2011 that number had plummeted by over 40% to just 224,000.

Outwardly at least, it would seem Holden and Ford have been too slow to react to consumer demand and no amount of government handouts can make the decision to build cars that people actually want to buy. Cracks in sales numbers might be papered over by models like the VF Commodore, but the overwhelming trend doesn’t lie. Buyers no longer want Commodores and Falcons. Couple that with the fact that no sustainable export markets can be found then it’s a fairly bleak outlook for Australia’s once iconic family sedans.

Ford has already announced it will stop making cars in Australia by 2016. We expect Holden will follow suit. And then it becomes a matter of time until Toyota does likewise.

Unless something unforeseen happens it will be a sad day when local car manufacturing ends in Australia. It’s a business sector that has, at times, been one of great pride for Australians. But not any more. Sales figures don’t lie.

[Source: ABC]