Hot on the heels of a $275 million “investment”, Holden is going back to the Australian government, hat in hand, asking for more money. This time, Holden wants another $265 million to keep their assembly plants online.
According to Holden, assembling cars like the Cruze and Commodore in Australia carries a premium in the neighborhood of $3460 USD compared with other locales like Korea. The Thailand built Colorado 7 and the Korean-built Captiva, both crossovers, are said to help offset the loss-making nature of Australian manufacturing.
Holden is said to be seeking more money in the wake of Ford’s closing of their Australian manufacturing operations. The incoming administration in Australia’s government are known to be supportive of propping up Australia’s manufacturing sector, with the new Industry Minister a vocal supporter of the auto industry. Meanwhile, opposition figures have indicated that they would look to dramatically cut subsidies for the auto sector, so Holden may be feeling extra pressure to get a deal signed sooner rather than later.
While Holden has previously been firm in its commitment to Australian manufacturing, the tone seems to have changed, with Holden indicating that further investment is a prerequisite for maintaining a manufacturing presence in the country. Holden isn’t alone either; Toyota is said to be looking for government subsidies as well, as a rapidly changing auto market and unfavorable exchange rates has left many auto makers caught flat-footed down under.
While other countries are making substantial investments in their auto sector, Australia, like Canada, has been taking cautious half measured, investing more modest amounts in conjunction with the OEMs and while adopting a “wait and see” approach. Both countries are watching their auto plants gradually fade in both importance and number, as cheaper manufacturing sites and unfavorable exchange rates and other structural factors erode whatever competitive advantages the two countries may have once had.
The nature of globalized product lines also doesn’t do any favors for Australia, which used to assemble vehicles that were locally popular, like large rear drive sedans and Ute pickups. But with the Ford Falcon gone, the Holden Commodore rumored to be moving to a global platform and consumers flocking to vehicles like the Toyota Hilux, Ford Ranger and Holden Colorado for their truck fix, Australian cars and their manufacturing sites seem to be slowly losing the battle for their lives.