Australia’s Auto Industry Ends

Australia’s century-old auto industry evaporated last Friday when General Motors Co.’s Holden unit closed the country’s last assembly plant.

Ford Motor Co. shuttered its Australian factory in October 2016, and Toyota Motor Corp. idled its plant less than three weeks ago. Demand for locally produced cars, which peaked at 475,000 units in 1970, shrank to 167,500 vehicles last year, according to the Paris-based International Organization of Motor Vehicle Manufacturers (OICA), the global auto industry trade group.

Vehicle production in countries with high manufacturing costs faces considerable headwinds unless much of their output can be sold overseas. Germany and the U.K., each of which export about 80% of the cars they make, have been good examples of successful high-cost producers. Australia was hobbled by unfavorable exchange rates and restrictive trade barriers in potential Asian markets.

But the Financial Times cites Australian analysts who warn that automakers in high-cost economies won’t survive long term unless they can shift to highly automated production, tap global supply chains and offer world-class design and technologies.