Automobile Automotive in Australia Report

Running Head: Automobile Automotive in Australia
The changes in the Australian car manufacturing industry
Name
Professor
Institution
Corse
Date

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Automobile Automotive in Australia
Australia is one country that is capable of designing cars from scratch and also
manufacturing big volumes. The series of cars are also important in Australian automotive
company and generally the economy of Australia. The industry can be subdivided into two parts:
the production phase and the manufacturing phase. Both of these phases are important in the
overall performance of the AAMI. The manufacturing sector refers to the conditions of the
market in which the manufacturing business compete, through the production of vehicles and
related goods with an aim of the maximization of profits. The sales sector implicates the
conditions of the market under which the sales business people do compete and has the same
business objectives as the manufacturing sector. One market structure can be described in the
manufacturing sector as far as AAMI is concerned, this is the oligopoly. There two organizations
that have been producing cars and these are Ford and Holden, the methods of competition and
the strategies are based between two organizations (Singh, Smith & Sohal, 2014).
The most important characteristic of the oligopoly that should be stated here is that the
prices are in most cases sticky, meaning that they are capable of changing less frequently more
than in any other market structure. Secondly, the prices do change frequently. The latter makes
the firms change their prices concurrently. This boosts up the competition between markets.in
our discussion; it is very important to distinct between the sectors within the AAMI for the
purposes of developing economic models, one for each AAMI sector (Singh, Smith & Sohal,
2014).
Research shows that the AAMI experienced a 20% turnover in the 3500 workforce it
faces. The company is growing at a compound annual rate of 18% since it is recruiting 1000
people per year. The price size has spurred a land grab in the sector of recruitment (Singh, Smith
& Sohal, 2014).

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Automobile Automotive in Australia
Notwithstanding the responsibility games from the previous week, the conspiracy theory
does not exist and there is no one reason. Given that it was a little bit simpler, that could have
saved the company. The AAMI manufacturing sector had shrunk to a point that each company
was relying on the other for survival. Factories are in dire need of the frugalities of gauge at the
best times but not only the worst of the times when they have to compete with the cheap
imported products (Singh, Smith & Sohal, 2014).
The locally made cars in Australia were in decline.30 % of them had to make a dozen
Holden Cruse which were locally sourced while the Commodore was only 50% Australian at the
long run. The Toyota had an appearance from japan was 70% Australian and the this applied to
Ford Falcon too. Given that the cars had to survive beyond the current models, they had to rely
on the imported parts for their survival because this would keep the costs down (Singh, Smith &
Sohal, 2014).
It means that redeeming the car will not make to save the other parts of this
manufacturing, which was contrary to the “if you save us, we save them “used by the Holden
when engaging its argument for a continued aid from the government. Ford and Toyota were
always in the forefront of the headlines but some hundreds of smaller manufacturers were feeling
just the same pain or even more. The latter led to the fall of Domino in last year-Ford-collapse of
the remaining two manufacturers, Toyota and Holden and then the rest of the industry was not
evitable(Singh, Smith & Sohal, 2014).
However, the two Factories and the large number of spare part suppliers will struggle to
go full distance of the proposed dates of shutting down since the locally made sales began to tank
up. Although the cars made between now and the shut down time will have a backup warranty of

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Automobile Automotive in Australia
three years and parts up service for ten years, the customers have a high feeling of being insecure
thinking that they will be left in the lurch. The commentary predicts that by the end of the year
2017 the company will be shut although the companies are maintaining that they are staying in
the market for life. The reality is that as soon as all these factories shut down, the Toyota, Holden
and Ford will then start making massive profits (Singh, Smith & Sohal, 2014).
All the three firms have made a combined loss of more than $ 1.5 billion on their local
manufacturing operations in the last ten years despite the double receipts that they received in the
funding from the taxpayers over the same period (Singh, Smith & Sohal, 2014).
Who to blame
The government that created low import tariffs and also went ahead to sign in free trade
agreements that allowed the cheap foreign cars a larger market size (Singh, Smith & Sohal,
2014).Many factors apart from the one mentioned above contributed to the demise of the AAMI
along with the purchasing public and machinists of the navies who were responsible for
swapping partisanship for a larger option of more desirable, reasonable and more appropriate
imported cars. The consecutive administrations from the duo of government made an economic
environ that Australia is in: a country that is characterized of high earnings, low importation
tariffs and also a very robust currency.
The above mentioned factors makes it almost impossible to import cars particularly when
you are surrounded by Asian countries that in most cases do not necessarily need the Australian
made cars since they are making vehicles for just one third of the labor cost. Given that Australia
sells her cars to the huge marketplaces and in areas like USA, ignoring the rates of exchange
which are not favorable, the overcapacity of too many car factories would just be neutralized to