By on November 30, 2012

A struggling domestic auto industry long past its glory days of big rear-drive sedans is at an existential cross-roads. An upcoming election may decide the fate of thousands of jobs and decades of motoring history. Sound familiar? The madness of America’s election is over, but the same scenario is playing out in Australia.

Australia’s auto industry has had a rough year of government bailouts, plant layoffs, declining sales of domestic cars and supplier implosions. And it’s not going to get any easier. Holden boss Mike Deveraux bluntly said

“I believe 2013 will be a year that Australia decides whether it wants to have an auto industry or not,”

Cars like the Mazda3 and Toyota Hilux and at the top of Australia’s sales charts, with traditional favorites like the Holden Commodore and Ford Falcon slipping down the ladder. Even vehicles like the Volkswagen Golf are gaining in popularity, and domestic alternatives like the Ford Ranger and Holden Cruze are having a hard time catching up.

Australian cars, despite being coveted by enthusiasts around the world for the V8 engines are rear-drive platforms, were built to appeal to Australian tastes in an era where the market was protected and fuel was cheap.  The combination of increased competition and the lack of scale for Holden and Ford’s big sedans (which are only exported to the Middle East and a couple assorted countries) also puts a damper on their financial success. Now that the landscape has changed, consumers are downsizing – and despite Ford’s efforts with the 2.0L Ecoboost Falcon, the big sedans don’t seem to be doing it.


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15 Comments on “Do Or Die For Australia’s Auto Industry...”

  • avatar

    Holden and Ford have moved too slowly to satisfy the SUV market and the nimble medium/small market (mazda 3). They are also failing to realise that they are better off doing a Ford USA and increasing prices a little whilst lifting trim levels and quality. The biggest problem with the current line ups is acres of dull grey plastic, the interiors are dire.

    However, Ford’s Typhoon turbo charged V6 is a MONSTER of an engine and i am yet to find anyone outside of BMW (and even that is arguable) who can tune a car for such a great ride/handling compromise as the boys from Holden.

    Big picture, Ford could really fade and not be missed but Holden are arguably GM’s diamond in the rough. Ford USA and Europe has some great product, GM is still struggling and should be utilising Holden’s engineering and development team to help with “world cars”.

  • avatar

    It’s a shame Chevy is only importing the SS (nee VF Commodore) sedan in “limited numbers” – which won’t be enough to help Holden out. The G8, meanwhile, sold quite well here (>38,000 in less than two years), considering it arrived just in time for the Great Recession, and the ST ute version was stillborn. I guess it depends what “limited numbers” means.

  • avatar

    The REAL Problem is the very high Australian Dollar that is hurting manufacturing a lot. It is cheaper to import a Ford Ranger from Thailand than make a Ford Falcon Ute.

  • avatar
    schmitt trigger

    Perhaps a down under reader may correct me, but one of the principal reasons for the high AU$ cost is the vast amount of minerals being exported?
    That all those fabulous paying mining jobs are taking its toll on everyone else’s jobs?

    • 0 avatar

      No . Overseas investors are keeping the Dollar unreasonably high although mining has gone from a boom. Three reasons : Interest rates are relatively higher here than elsewhere , We are a stable currency, the IMF wants to add the Australian dollar to the preferred currencies like the US Dollar and Euro, there is a chance there will be another mining boom in Australia.

  • avatar

    Just bring the vehicles to the USA. Everyone and their brother will want “The 4-Door V8 Ford”

    • 0 avatar

      Except they are only built in RHD. Ford North America has constantly rejected over the years exporting Australian cars(Holden has a lot fewer problems with GM) after the disastrous Ford Capri of the 1970’s. Ford Australia is a vastly different beast to the company that built the Capri in the 1970’s, but still no exports. I think they have just started to export the Territory to South Africa.

      • 0 avatar

        You’re mixing up your Capris. The one sold in the US in the ’70s was built in Germany. The Australian one was the two-seat convertible built from ’89-’94 (and which was, indeed, a disaster in every sense).

    • 0 avatar

      As said, the platform is RHD only AND will not comply with the fuel tank location requirements of the US. Ford US won’t release the funds for a redesign. So RIP Falcon …

  • avatar

    They are suffering the perfect storm of conditions that conspire to kill the local industry.

    This is made apparent when even cars like the Mercedes C class comes close to beating the Falcon on sales simply because people simply dont want to buy a Ford Falcon or Holden Commodore. Like the rest of the world, people want CUVs and small hatches or if they do want ‘toy cars’ they want something exotic.

    What you can do in a Falcon, you can do better using less fuel in a CUV or a Focus/Cruze.

    And here’s the worst thing… Ford and Holden have not marketed properly and their dealer experience has soured people so they’re not even buying the Focus and Cruze. They seem to want Japanese, Korean and German hatches.

    People have got sophisticated and they dont want the local product.

    Add to that, people are crushed by housing and utilities and job insecurity so are keeping cars longer. The country is plagued by slackening demand for conspicuous consumption. New cars = discretionary consumption.

  • avatar

    That Falcon is a nice looking car. All I can think of is “The New Panther”. We have a plant in St. Thomas that could build it! :)

  • avatar

    One of the worst things decision was that they cancelled building the Focus in Australia. Luckily; Ford, Holden and toyota build cars in at least one popular segment. If the Ford territory didnt exist, ford would have already bailed out, like Mitsubishi did a few years ago.

  • avatar

    You would be hard pressed to find any advertising for the 4 cyl Falcon, which is the bain of Ford. All advertising for all makers is geared towards the “fun” sized smaller models. The larger cars advertised are the suv’s, Captiva, Territory, Outlander etc..
    Personally I believe that the Falcon/Territory will die and with them the last large car built in Australia. Commodore variants will probaly last until 2016. The australian market is downsizing. The days of a big car for a big land have gone. Now a 4cyl buz box will make the drive between capital cities comfortable. As for the outback, precious little remains of that and even Corollas will do the territory drives. The high dollar, lack of exports, only Holden build a small car (cruze) and toyota doing the camry/aurion/hybrid. Ford is left building the biggest. The Australian car industry is going to disappear. The Australian market is and will change. This will be a game changer for all of Australian industry. Get ready for Carmaggedon Aussie style!

  • avatar

    I can’t begin to describe how weird it is hearing those noises coming out of a Falcon. I had an XR6 when I was down there in July, and am hoping to get my hands on an Ecoboost Falcon later this month when I get home again.

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