General Motors said on Wednesday it will stop making cars and engines in Australia by the end of 2017, with nearly 2,900 jobs to be lost, because of high production costs and competition.
The decision could spell the end of car manufacturing in Australia as the industry will be too small for supporting businesses such as parts makers to remain economic. Toyota announced it is reassessing its future in Australia. A union said 50,000 jobs in the auto industry are in jeopardy.
While Australians say they want locally-manufactured cars ... the reality is they don’t buy them
GM’s Australian subsidiary Holden once dominated Australian auto sales, but lost market share to imported cars. Ford once Holden’s major rival in Australia, announced in May that it was ending production in the country in 2016. Toyota is the only other auto manufacturer in Australia.
Australia had four car manufacturers before Mitsubishi shut its doors in 2008.
GM’s announcement has been anticipated for months. The Australian government has been under mounting political pressure to offer increased subsidies to the Detroit-based company to keep it manufacturing in Australia for the sake of the auto parts industry.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the industry faces in the country including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” GM’s chief executive Dan Akerson said in a statement.
