This report will examine the Motor Vehicle manufacturing industry in Australia. The focus will be limited to new passenger vehicles, and the component industry associated with those vehicles.
The objectives of the report are :-
- To examine the significance of the industry within the Australian economy and to assess progress made post the 1984 'Button Plan' to achieve international competitiveness and long term industry profitability.
- To assess the relative industry strengths of the industry participants.
- To identify industry strategic responses to current market conditions and consider the likely future of the industry in Australia.
The methodology used was to establish from available literature the historical development of the industry within Australia and to relate this to industry experience overseas. This comparison identifies the key competitive forces effecting industry participants. The resultant industry behaviour is related to industry analysis models, and from this conclusions are reached as to the likely business strategy of industry participants and the effect such strategies will have on the industry in Australia. The conclusion reached is that Australia currently presents an attractive, but marginal manufacturing location for the international competitors. This is in spite of the fact that the efficiency and cost competitiveness in Australia has greatly improved in recent years. On these measures Australia still lags the main Asian producers in particular. The key attractiveness factors relate to the exchange rate, the political environment and supportive government policy.
Whilst there are some competitive moves that the industry can make to improve its position against imports, the main conclusion is that it will be Australian government policy, which will ultimately retain or lose this industry. These policies however are not protection related, but rather are policies directed at the economic reforms and infrastructure required by the industry. Nor will it be the absolute level of these measures which will be critical, but rather it will be the level relative to other countries, who are also competing to attract the automotive industry as part of a country competitive strategy.