Should the Australian Government support local car manufacturers?

[sleekism]

A lot of threads seemed to have touched on the subject but it would be interesting to see what peoples general opinion is.

Traditionally I believe local car makers were guaranteed 80% of the market and there was high tariffs on imports but this has given away to a laisse fairez policy where tariffs are virtually non existant and imports make up 80% of cars sold.

A lot of people seem to be of the opinion that the local makers should be left to fend for themselves and that the Government should not waste money on them but I believe these are ignorant comments. I mean how many billions are spent propping up inefficient agriculture?

I mean Farmers get lots of tax breaks, special government grants and the use of Government land for little or no charge as well as a million other subsidies that the taxpayer funds.

I mean if there was a REAL free market then how many farmers would be around?

In a lot of cases it would be cheaper to buy food from overseas and seeing the impact that a lot of bad practices has had on soil quality, the environment and water resources we would be better off not subsidising agriculture.

It's not just agriculture either the Government goes to a lot of trouble looking after the mining industry and I have heard that the Government actually subsidises Coal by a substantial amount so as to make it globally competitive so in fact no money is made from it's export and some old mines have cost a substantial more to clean up from the Government then was ever made from it.

Other nations are intensely protective of their local industry with an example being the US where they have received cash bailouts and Japan which made it extremely difficult for imports to compete.

The local car industry has a useful part of Australia for a long time and it's a testament to it's ability that we still have the Falcon and Commodore despite high petrol prices, low tariffs, a strong Australian dollar, weak Japanese yen and a buying public who are too up themselves to buy Australian made and seem to think that anything made in Australia will give them leprosy and anything that is perceived to be a Japanese or European brand even though it was probably made in Lithuania or South Africa was hand picked by God himself.

My 2 cents :

[Falcon Coupe]

PM gives Ford $50m to make petrol-guzzlers

http://www.smh.com.au/news/national/...335930403.html

I would call that supporting locals.

[FPV8U]

There shouldn't be an imported car in the entire goverment fleet, support Australian car makers, they need our business now more than ever.

[b2tf]

I think the government already does a lot for the auto industry here, the biggest difference is in consumers supporting local industry. It's a bit of a rough cycle in that people will whinge about the quality of your Fords and Holdens etc saying they have nothing on Japanese/European imports, but without the constant sales to fund development and keep the locals going you cant expect the quality to get any better.

Personally (and I know I'll probably cop a bit for saying this), I find the Ford/Holden products to be among the best value for money cars around - what other cars have a $50-60k price tag and come with leather, V8, bodykit and all the mod cons? To me its quite easy to support local cars because of what they offer, for others it's different.

[Mark351]

Bitsamissing have been bailed out at least twice now with federal government handouts to stop them from closing down.

[Falcon Freak]

The problem is that the Button Plan which was devised in the mid-1908

[banarcus]

Are you doing a school project or something?

[Falcon Freak]

Hit the wrong button - let's try that again.
--------------------------------------------------------
The problem is that the Button Plan which was devised in the mid-1980s could never have forseen 21st century globalisation, the demise of communism and subsequent emergence of the Chinese manufacturing industry.

The Button Plan initially achieved what is set out to acheive by improving the local vehicle manufacturing industry and making it globally competitive. The 1990s saw much growth and a significant increase in exports. This decade has seen the locals going backward quickly. All car companies have shed staff in the last three years, About five automotive component suppliers have gone bankrupt in the last three years. If this trend continues then there will be no local vehicle manufacturing industry. The two main contributors in the last three years are:
- tarrifs on imported vehicles reduced from 15% to 10% on 1st January 2005
- a significant increase in the price of crude oil

The concern is that the federal government is unwilling to stop the tarrif reductions. The current tarrif level is 10%. The Button Plan is to go to 5% tarrifs on imported vehicles by 2015. That would be suicide. In my opinion the tarrifs should be returned to the 15% level as this was the best balance between protection of the local industry and forcing the local four manufacturers to be competitive.

Anybody who thinks Australia can compete with the Asians on a level playing field is a fool. Economies of scale will always see Australian made cars more expensive then those made in Asia. Anybody who thinks the local industry is not worth saving is also a fool. Although the Australian economy is good at the moment, it could not absorb approximately 40,000 redundant automotive workers should this industry disappear overnight.

Many peope are questioning the current situation. Here are a few articles about how we got to today's situation and where to from here (listed in no particular order):
Article 1
Article 2
Article 3
Article 4
Article 5

Something needs to be done and soon or it will be too late as the industry is now at critical mass and is only just surviving.

FF

[Fordman1]

No,'No's so far......

I can see why by reading the Poll choices. Lol.

[ClevlndStemer]

No i don't think the government should be. The industry has had enough handouts. Keep protecting the industry and they'll keep turning out crap. Give them a challenge, put them under pressure and maybe we will see some decent cars being churned out.
Why shouldn't the consumers be able to choose cars on a level playing field? Why can't Ford and Holden go with the competition?

[Falcon Freak]

Originally Posted by ClevlndStemer

No i don't think the government should be. The industry has had enough handouts. Keep protecting the industry and they'll keep turning out crap.

Please name one country which does not protect its local industries.

FF

[ClevlndStemer]

I don't know any, but to be honest I don't care.
I don't see why the government should provide handouts. IF see the need to then why don't ALL industries receive handouts when they're struggling and I mean ANY industry? What about the protection for other industries such as IT? Jeez we went through many lean years in that field, was much done about it? No I am sorry the car industry is no different, yes manufacturing is disappearing here but that isn't due to tariffs, that's a whole new ball game there.
What will it prove in any case? The US have strict tariffs and such but domestic sales are DOWN. Consumers are wanting change and there is nothing wrong with that. The issue is the lack of change by the domestic company's, their lack of future product insight. If that happens here, what we're supposed to put up with the barge *** fuel guzzling dinosaur cars produced here? No, I see this as a good opportunity to see what our locals can do to compete. If they could churn out a decent falcon/commodore, in terms of quality, value for $$ and reasonably economical (no big car will run on fumes), i'd consider buying a local car.

[MethodX]

Yes - Should be protected.
Other countries protect theirs.
Would not like to see Aus become a nation of child care and cafe' workers.

Plus in the case of war the factories can be reetooled to make weapons.

[Fordman1]

Originally Posted by ClevlndStemer

Why can't Ford and Holden go with the competition?

Because they're small fish (Australian subsidiaries) in a 'sea of sharks'. Ford and Holden have to fund their own programs, they get NO handouts from Head Office. (Holden was bailed-out in the 80's but it stopped there).

Both companies will live or die on the quality of their business plans's and ability to compete with overseas manufacturer's (who in-turn get handouts and support from their governments). My money is on the fact that there will be no Australian Austomotive Industry in 20 years -I hope I'm wrong.

If that happens then manufacturing here in OZ is dead - end of story.

When that industry dies, a lot of skills (Engineering etc) will be lost to this country forever. The side-effects will be bigger than we expect. There are no prosperous nations in the world without strong manufacturing bases.

You can't keep "digging stuff out of the ground" and survive forever !

[Falcon Freak]

Originally Posted by ClevlndStemer

I don't know any, but to be honest I don't care.

Whimsical arguments won't achieve anything. Give us a good reason why we shoudn't protect our industries.

Originally Posted by Barraxr8

You can't keep "digging stuff out of the ground" and survive forever !

Example - Nauru

FF

[ClevlndStemer]

Originally Posted by Falcon Freak

Whimsical arguments won't achieve anything. Give us a good reason why we shoudn't protect our industries.

FF

i thought i did basically outline why i don't think we should if you did go past the first line in my post. You asked for another country that doesn't protect its industry. I actually DID answer that with I DON'T KNOW and I don't care. So please make up your mind what you what me to answer.
TO be honest I don't care if no one agrees, the question was asked I answered with my feelings towards it.

[Fordman1]

Originally Posted by Falcon Freak

Example - Nauru

FF

Good example.

Lets just import EVERYTHING, and TRY to offset that with commodities and tourism !!

IMO it'll be 20 years before the country is broke.

[starwars_guy456]

Originally Posted by Barraxr8

Because they're small fish (Australian subsidiaries) in a 'sea of sharks'. Ford and Holden have to fund their own programs, they get NO handouts from Head Office. (Holden was bailed-out in the 80's but it stopped there).

Both companies will live or die on the quality of their business plans's and ability to compete with overseas manufacturer's (who in-turn get handouts and support from their governments). My money is on the fact that there will be no Australian Austomotive Industry in 20 years -I hope I'm wrong.

If that happens then manufacturing here in OZ is dead - end of story.

When that industry dies, a lot of skills (Engineering etc) will be lost to this country forever. The side-effects will be bigger than we expect. There are no prosperous nations in the world without strong manufacturing bases.

You can't keep "digging stuff out of the ground" and survive forever !

Agree totally, we have quite a fair bit to lose by losing the car industry, as outlined by Barra. At the same time, wouldn't be very smart of the government to support industries which do not deserve it. I would also like the government to promote competition between the main manufacturers. Look what's happened to Proton cars in Malaysia - pretty bad build quality for the local cars and not much incentive to improve the product.

Edwin

[schnoods]

I do believe that the Aus Government should support the Local manufacturers in they way they have done, But they cant give it to them on a silver platter.

Competition is always good for progress. Get complacent and the standards either drop or there is no will to progress.

Im all for supporting the locals and the small guy, but i refuse to support 2nd rate products and wear it proud just because of where it came from. And to be honest Holden and Ford are doing a reasonable job. Mitsubishi could lift their game but they are doing ok (for a company that is struggling financially) and they should ride out the storm.

As for not having any imported cars in the government fleet, well im against that. Some of the overseas manufactured vehicles are cheaper to buy, run and while we're paying for it they can run around in a camry for all i care, if they can save a few grand. Just have a look at what cars are used as taxi's and you'll get my drift.

[bArNsY]

Purchasing Power Parity, other countries make cars cheaper, Japan imports rice for Australia, why? cos its cheaper!
Putting more money into local car manufacturers long term is IMO throwing it away, through having it made overseas usually means the consumer gets it cheaper! its not whats right for the public, its what is right for the shareholders!
I am all for keep it locally but i think long term it will all go overseas

[sleekism]

I don't believe helping the local industry would lead to worse quality there still would be the competition between the local manufactureres which would breed a better product.

I agree though that there shouldn't be flat cash handouts but incentive funding like they have now but it should probably go further.

Maybe purchasing Australian made cars should be tax deductible for the consumer?

This would encourage manufacturers to produce locally, would be a win for the consumer and since there would be a larger percentage of retail sales for the locals meaning they would be more profitable and concentrate more on their performance and luxury cars.

In a level playing field I fear the only way the Falcon would survive would be by going offshore to China or moving upmarket to a BMW style competitor.

Geez imagine if Hyundai did bring out a large RWD V8 would people buy that over the Commodore and Falcon?

The worrying thing for me is that Labour introduced the Button plan when I thought they would have been against such a thing and the Liberals have continued the policy!

Poor old production workers.

[Smoke Pursuit]

Originally Posted by schnoods

I do believe that the Aus Government should support the Local manufacturers in they way they have done, But they cant give it to them on a silver platter.

Competition is always good for progress. Get complacent and the standards either drop or there is no will to progress.

Im all for supporting the locals and the small guy, but i refuse to support 2nd rate products and wear it proud just because of where it came from. And to be honest Holden and Ford are doing a reasonable job. Mitsubishi could lift their game but they are doing ok (for a company that is struggling financially) and they should ride out the storm.

As for not having any imported cars in the government fleet, well im against that. Some of the overseas manufactured vehicles are cheaper to buy, run and while we're paying for it they can run around in a camry for all i care, if they can save a few grand. Just have a look at what cars are used as taxi's and you'll get my drift.

Thing is government buys the cars at cost basically (with fleet etc), plus they pay no taxes on them either, which means while we pay $37,000 for an XR6 sedan the government can buy one for $30,000, flog it for 18 months and sell at the auctions for $26,500. So the governments fleet costs are very small in real terms, perhaps the government SHOULD only buy Australian built cars and pay retail like the rest of us, then the car companies may actually become profitable, and wouldn't need hand outs.

Sadly the Australian Market is too small to be profitable, this is why Holden has an extensive export program with the VE / WM, although they may not make huge margins on the cars they are exporting they are pumping them out along side our Australia models, the more cars they sell the more cost effective it is for them to continue manufacturering. Id say Holdens doing about 7000 Commodores / Statesmens a month which for them is probarly at a break even point. The good part for them is that the infrastructure is there to capitalise on further exporting, all it is a matter of setting the models up in the system and they will be built to spec and ready to load onto a boat. Ford on the ohter hand cant even build the South African Territory on the Production line and put it straight on a boat, all the SA Territories have to go to FPV for modifications before they can be shipped out, which in todays manufacturing standards is pretty **** poor. I guess the whole FPV manufacturing concept is below standard to, if Ford / FPV had any idea about building cars they would do the FPVs on the main line just like XR's, would save alot of screwing around... For gods sake, they already fit the motor, the trims and all that, I cant see whats so special about having a second department fitting body kits stripes and wheels, doesnt add up to me.

[Falcon Freak]

Originally Posted by LSTerritoryGhia

I guess the whole FPV manufacturing concept is below standard to, if Ford / FPV had any idea about building cars they would do the FPVs on the main line just like XR's, would save alot of screwing around...

FPV is a separate company to Ford. Plus if HSV can make it work by bulding their cars off the assembly line then FPV should also be able to do it.

FF

[Smoke Pursuit]

Originally Posted by Falcon Freak

FPV is a separate company to Ford. Plus if HSV can make it work by bulding their cars off the assembly line then FPV should also be able to do it.

FF

I appreciate that and understand that prodrive owns 51% of FPV while Ford owns 49%. But at the end of the day everything they are doing can be done on the main line, so why waste dollars having cars shippings between Ford and FPV, along with having to send wheels and tyres backwards and forwards to roll them over, for me this doesnt make sense... This would be different if FPV were actually physcially modding the cars at their end, like they did with the turbos in the early days, but i believe everythings done at Ford bar kits wheels etc...

[xbgs351]

Originally Posted by sleekism

I mean Farmers get lots of tax breaks, special government grants and the use of Government land for little or no charge as well as a million other subsidies that the taxpayer funds.

I mean if there was a REAL free market then how many farmers would be around?

:

I'm assuming that your not a farmer then.

[sleekism]

Originally Posted by xbgs351

I'm assuming that your not a farmer then.

Actually my family has a lot of farms over NSW with the difference being that the land is owned by the farmer and does not receive handouts.

I am simply against the free ride SOME farmers get out west being heavily subsidised using Government land and subsequently degradading it.

[Flouro_Joe]

The article says Ford is considering making an OFF-ROAD Territory? Does anyone know about this particular model and whether or not it will be available in diesel?

[AC/DC]

No, the govt shouldnt support local car manufacturers.

Its OUR taxes there, so they should be spent on the most cost efficent purchases.

AC/DC

[MethodX]

If one of the factories was in QLD would it change your mind?

[Nostalgia]

Honestly guys, how many locally owned companys have already gone offshore. Im not only talking Automotive but the vast array of products which Australia used to manufacture locally. The Government says Buy Australian Made, But in all honesty, What is Australian Made. In summing up, YES the Federal Government should support car manufacturing in Australia.