The pending closure of Ford’s Victoria state engine plant may signal the beginning of the end for Australian car assembly, according to a New Zealand-based car buyer’s publication.
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Dog & Lemon Guide editor Clive Matthew-Wilson said he thought that Ford, General Motors’ Holden and Mitsubishi would all eventually stop manufacturing in Australia, leaving just Toyota.
Currently, only Holden and Toyota have significant export business – both ship left-hand drive cars to the Middle East while Holden also builds a Pontiac-brand model for the US. Mitsubishi used to ship cars world-wide, primarily to the US, but that ended with a model changeover several years ago. New Zealand, with a total new car market of only around 75,000 units a year, is now the largest export market for Mitsubishi and Ford which build only right-hand drive cars.
“Both Ford & General Motors are in serious trouble globally, while Mitsubishi Motors Australia is haemorrhaging money. Therefore, it seems inevitable that their Australian car assembly operations will be phased out,” Matthew-Wilson said.
Mitsubishi Australia closed its engine plant in 2004, with the loss of about 1,400 jobs.
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By GlobalData“It [the end of Australian assembly] might take 10 years or it might happen in one year, but the chances are, it will happen,” Matthew-Wilson said.
He thought Mitsubishi would be the first company to end car assembly ‘down under’.
The company recently launched a V6-only 380 model – a right-hand-drive variant of the US-built Galant – but rapidly rising petrol prices in its key domestic and export markets caused it to miss sales targets and it has since been ‘relaunched’ with revised specification and prices.
“As things stand, it will require something of a miracle to keep the Australian Mitsubishi factories open,” Matthew-Wilson added: “I’m well aware of how many Australians rely on the car assembly industry for their jobs and I sincerely hope that we are wrong when we question the viability of Australian car manufacturing. However, the fact is, car manufacturing in Australia is only marginally profitable even in good times, and for many manufacturers the good times are over.”
A closure by Ford, Holden and Mitsubishi would see Toyota, which is under no pressure to cut back on its operations, as the sole volume manufacturer in Australia, Matthew-Wilson said.
He added: “Car manufacturing these days is rapidly stampeding towards low-wage countries.
“What we are saying in the Dog & Lemon Guide is a common topic of discussion within the car industry here. It’s just that few people are talking about it publicly because it’s too scary to contemplate.”
He noted that sales of locally-built vehicles in the Australian market have fallen from 36.1% in 1998 to 19.4% in 2007.
Australian automotive media sources have told just-auto they believe Mitsubishi Australia manufacturing ultimately is doomed as it’s unlikely the Japanese parent would approve another new car project like the 380 given the low volume.
Local media have speculated Ford could offset falling Falcon/Territory volume – it recently cut output and axed some jobs – by reintroducing a small car like the Focus to Australian assembly or persuading head office to let it develop and build a new line of rear-drive cars based on the Falcon platform to replace models such as the Crown Victoria in North America.
Holden’s future is seen heavily dependent on continued exports like the current Chevrolet-branded Commodores shipped to the Middle East and the Pontiac models made for North America.
