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Australia Local Auto Sales Fall by Record as Carmakers Seek Exit

Photographer: Carla Gottgens/Bloomberg

A vehicle bearing GM Holden Ltd. branding stands parked at the company's headquarters in Melbourne. Close

A vehicle bearing GM Holden Ltd. branding stands parked at the company's headquarters in Melbourne.

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Photographer: Carla Gottgens/Bloomberg

A vehicle bearing GM Holden Ltd. branding stands parked at the company's headquarters in Melbourne.

Australian sales of locally-produced vehicles fell a record 15 percent last year as Ford Motor Co. (F) and General Motors Co. (GM)’s Holden unit announced plans to cease production in the country amid surging imports.

The two U.S. automakers and Toyota Motor Corp. (7203) sold just 118,510 locally-produced cars in 2013, according to data released today by the Federal Chamber of Automotive Industries. That compared to 139,796 the previous year and 201,623 in 2006.

Australia’s century-old automotive industry, which includes about 150 suppliers that employ an estimated 42,000 people, is bracing for extinction as the strong local currency and lower tariffs drive out manufacturers. Sales of Australian-made cars have tumbled 41 percent since 2006.

“We’re probably the most expensive manufacturing country in the world today,” Tony Lemmo, chief executive officer of Autoteam Australia Consulting, said by phone from Melbourne today. “Everybody is re-sourcing to lower-cost countries.”

Building cars in Australia is unsustainable, Mike Devereux, GM Holden managing director, said Dec. 11. in announcing the unit would stop producing cars in 2017.

A focus on large sedan models that are less popular with consumers has also hit local output. Ford’s Falcon and GM Holden’s Commodore, which accounted for one in six cars bought in Australia in 2003, made up just one in 30 of last year’s total.

Labor Contracts

The decline last year was the biggest since the Federal Chamber began breaking out local production figures in 2006.

Toyota, which accounted for 19 percent of vehicles sold in the country, is seeking to change aspects of its employment contracts with plant workers on grounds that the operations are uncompetitive compared with other factories worldwide. It’s appealing a decision by Australia’s Federal Court Dec. 12 to prevent a vote on the changes.

“GM Holden’s planned closure in 2017 will put our manufacturing operations and the local supplier network under unprecedented pressure,” Max Yasuda, head of Toyota’s Australian operations, said in a statement last month. “It is now more important than ever before that we make urgent changes.”

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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