MGT726 Report: Reasons Behind Australia's Auto Industry's Decline

This report examines the decline of the Australian automobile manufacturing industry, focusing on the economic factors and customer trends that contributed to its downfall. The research investigates the closure of major car manufacturers like Holden and Toyota, highlighting the impact of import tariffs, foreign competition, and changing consumer preferences. The report explores the historical significance of the industry, the role of government policies, and the challenges faced by manufacturers in a globalized market. The study utilizes literature reviews and analyzes the economic implications, including job losses and the need for business recovery strategies. The report concludes with recommendations for the industry's sustainability and future development, considering the shift towards foreign imports and the evolving needs of the Australian market. The research also addresses the research questions that determine the customer trends that have been driving the business for the industry for the Australian Automotive, the causes behind the downfall, strategies of business for the industry of manufacturing in the nation leading to the sustainability of the economy and develop and recognize the strategies of business with the help of the journals giving success in Australia’s manufacturing Automotive Industry.

Reason behind the rise and fall of Automobile
manufacturing industry of Australia
[Put your full name here]
[student number]
[date]
[Course Code – e.g. MGT726 Managerial Project]
School of Business
Faculty of Arts, Business and Law
University of the Sunshine Coast

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[Adapted from Perry, C (2013), Efficient and effective research, AIB Publications, Australia p.5 and 6]
Executive Summary
Table of contents
List of Figures
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Glossary
References
Appendices
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EXECUTIVE SUMMARY
The aim of the research is to compare the rise and fall of manufacturing of car manufacturing
companies of Australia. It is seen that the car manufacturing companies at Australia have
been closing their operation. The research is helping to determine the customer base that
should react and deliver the exact data in the study. This is because of the high loses that has
been taking place. The import tariffs are withdrawn. It has turned the foreign imports cheaper
and easier. Moreover, the customer of those organizations has preferred to utilize those
foreign cars. In this way, it has led to the downfall of the Australian car manufacturing
companies. Here, the primary method data collection is used as the research methodology.
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Table of Contents
1. Introduction:.....................................................................................................................1
1.1 Purpose:...................................................................................................................................1
1.2 Background and significance:..................................................................................................1
2. Research question and objectives:...................................................................................3
2.1 Research boundaries:...............................................................................................................3
2.2 Report outline:.........................................................................................................................3
3. Literature Review/Theoretical Framework:..................................................................4
3.1 Introduction:.............................................................................................................................4
3.2 Identification of the Financial Crisis:......................................................................................4
3.3 The economic issues:...............................................................................................................5
3.4 The economic issues:...............................................................................................................6
3.5 Implications:............................................................................................................................6
4. Methodology:.....................................................................................................................7
4.1 Introduction:.............................................................................................................................7
4.2 Sources of data and justification:.............................................................................................7
4.3 Details of specific techniques:.................................................................................................8
5. Analysis of Results:...........................................................................................................8
6. Conclusions and Recommendations:..............................................................................9
7. References:......................................................................................................................11
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1. Introduction:
1.1 Purpose:
Australia’s automobile industry has turned out to be one of the emerging and
successful industries. This happened after the World War II. Australia’s automotive industry
has been playing a crucial role in the economy. Moreover, it has been boosting the
investment and innovation. It has been driving the broad scale activities in the industrial
sector. The nation is the only industrial land lacking the assembly of vehicles. The
manufacturing sector of the Australian car has been too small. Hence all the organizations
have been needed to depend on each other regarding the survival.
The aim of this research has been assessing the causes for the all of a sudden decline
of the automobile sector in the nation. This has also determined the factors needed for the
survival and the development of the automotive, industry.
The study throws light on the particular causes why the manufacturing industries are
needed to depend on the foreign products as the form of inputs.
1.2 Background and significance:
All the doors for the car manufacturing industries of Australia have been shutting
forever. Holden, The outpost of the general Aussies got highlighted on the month of October.
This happened when the production line of Commodore felt SILENT. This has been just a
couple of weeks after the shutting of the Toyota Camry factory. Australia has been regarded
as the first nation to manufacture the cars. Moreover, it has helped the country to design the
culture. An active role has been played by the Australian constructors to start the car and
aircraft development. The General Motors has been manufacturing the cars in Australia
through the import of spare parts from the United Kingdom to the United States. They have
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been also giving support to the military vehicle of Australia. In this way, the aircraft engines,
weaponry, and armored b=vehicles are designed. More than about ten million cars are built in
Australia. They have been trying to create more cars. Further, the industry has shown their
caliber in employing numerous workers. Moreover, various small businesses have been
supporting the industry. Currently, two of the leading car manufacturers in the Nation have
taken decision to halt their production by the end of the current year. They are Toyota and
Mahindra.
The former one has revealed that this should begin the production has they identify any
development in the industry. There have been, various vital causes for the decline of the
manufacturing industry of Australian car. The industry never exploits the scale economies.
The reason is that the Market of Australia has been very small. Further, in order to serve in
this kind of market, there have no other scopes that are available apart from using the cost-
effective the foreign production inputs. This also includes the labor. On the other hand, the
conditions of domestic market have been turning weaker. This is because of the lesser import
traffics. This also includes the agreement of Free trade. Apart from this, the situations of
better working and the higher wages are been demanded from the side of the union. Thus it
turned out complicated for the companies of the automobile to meet their demands regarding
the labors. However, Holden and Ford announced that this must retain the R&D activities in
the nation. However, there has been a huge confusion that those organizations would go for
the R&D activities. This has been nearer to the plats of manufacturing.
Thus with the decline of the industries of car manufacturing, this has been important
to spend higher quantity in the activities of R&D. This is such that it never affects the
additional other sectors of the Australian economy. With the diverse, fast-changing and rich
changing choice of the vehicles, the various fickle-minded purchasers have been shouting
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“Buy Australian”. This happened while driving the foreign cars. However, it has been no
wonder the car industry has been unable to stand the chance. The people of Australia have
been figuring out what have lost till now ultimately. The executive director of manufacturing
of Holden has insisted that the Adelaide workers of the company have maintained the
standards high right till the ending. During the final years of production, Holden has built the
best quality cars categorically. This is to ever roll out of the plant. Their last car has been
their best.
2. Research question and objectives:
1. To determine the customer trends that have been driving the business for the industry for
the Australian Automotive.
2. To determine the causes behind the downfall of this kind of big industry affected by the
unemployment and economy in the nation?
3. In identifying and exploring the strategy of business for the industry of manufacturing in
the nation leading to the sustainability of the economy.
4. To develop and recognize the strategies of business with the help of the journals giving
success in Australia’s manufacturing Automotive Industry.
2.1 Research boundaries:
The main restriction of the study is only in Australia’s automotive industry. This has
been drawing the near comparison to the leading and popular car manufacturers in the nation.
The instances of this include the Holden, Toyota, Paccar Inc and so on.
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2.2 Report outline:
The report has begun with introducing and reviewing the current literature that is
relevant to the theme. This has also outlined the methodology used to collect information and
addressed the objectives of the research. The following sections would throw light on the
outcomes and reveal the conclusion with proper recommendations addressing the
management issues.
3. Literature Review/Theoretical Framework:
3.1 Introduction:
Here the various literatures is reviewed on the growth and decline of the
manufacturing of automotive car industry in the nation of Australia. This would highlight the
various implications from the literature that has been affecting the study.
3.2 Identification of the Financial Crisis:
According to Daruz (2014), the crisis in the economy has been the primary cause
beyond the decline of the companies dealing with manufacturing. The organizations have
been needed to outsource most of the processes to the other companies. In this way, it has
ensured that there has been no impact on the facilities of production. As mentioned in the
article by, Jasinski, Meredith, and Kirwan (2015) the various processes of outsourcing are
focussed instead on providing more preferences to the various in-sourcing activities.
Moreover, it is also seen that the process of in-sourcing regarding the volumes of lower scales
is attractive to various manufacturers and employees. This is to utilize the current capacity
completely. On the other hand, Stanford (2017), discussed that the companies have been
meeting pessimistic outlook regarding export scopes, costs, and domestic sales. Further, he
has displayed a close comparison lying between the industries of Canada and Australia. The
production of the automotive components in the nation of Australia has been higher than that
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of Canada. It has been also developing the activities in R&D according to Günther,
Kannegiesser, and Autenrieb (2015).
Thus the continuous effect of the fiscal incentives in the past years has been making
the activities of R&D in the country very strong. Further, the trade liberalization has removed
the rationale of Australia’s manufacture vehicles. Further, the overvaluations of the currency
of Australians have been assimilated with the inconsistent and political approach. This has
led to the downfall of the automotive industry of Australia. Moreover, the incentive program
has been also trying to foster the country’s innovation.
3.3 The economic issues:
Hua, Oliphant, and Hu (2016) and Chen, Feldmann and Tang (2015) stated that the
industry has been posing with various recovery. The services could be denoted as the
business rescue. All the aspects of the current and situations of the company are needed to be
considered. An effective business recovery plan is needed to be implemented turning out the
challenges all around. Further is has provided job opportunities for millions of employees.
Further, Hua, Oliphant, and Hu (2016) and Chen, Feldmann and Tang (2015) agrees with the
fact that there has been a particular economic indicator helping the manufacturing industry of
Australia for recovering actual output that has fall onto a very lower level.
On this fact, Yan and Fang (2015) opine that the margins of profit of the
manufacturing industry of Australia have also been declining. Further, the Australian
Government has been taking various steps in protecting those industries. As mentioned in the
article by Chen, Feldmann and Tang (2015) and Ong (2016), some external reasons have
been present regarding the downfall of the industry. Thus the industry has been adopting the
western style. Further, Ong (2016) along with Yan and Fang (2015) analyzed that the tax
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evasion done by the payers of tax has been one of the primary causes for the expiry of
Australia’s manufacturing industry.
3.4 The economic issues:
The factories require the scale economies their best periods. The local content of the
cars made in Australia has been already facing the downfall. Only a thirty percent of the parts
for making the Holden Cruze have been sourced locally. The Commodore has been just fifty
percent of the Australian at the end as per the figures provided by the car makers of Australia.
It has been highlighted by Galliers and Leidner (2014) and Peppard and Ward (2016)
that the responsibilities of budgeting, operation assessment, and role of planning have been
connected to the organizations strategic plan directly. In their article Gamble and
Thompson (2014), mentions that it has been crucial to analyse and then evaluate the
efficiency of the strategic map. Moreover, it has been developing the balanced scorecard. It
has been helpful in the organization’s long-term development. Further, both the articles by
Peppard and Ward (2016) and Gamble and Thompson (2014) stated that the strategic
management has been helping in the revitalization. It has been also bringing the changes
regarding the development of the business plan.
3.5 Implications:
Various gaps have been present in the literature mentioned above. It is seen that the
Daruz (2014) has concentrated on the financial situations of the nation. It has been the
primary cause for the decline of the industry of automobiles. Moreover, he has never given
significance to the in-sourcing and the various benefits that have been the important factor in
this current generation of globalization. Next, there have been particular factors like job
opportunities, charges on taxes. The financial crisis is needed to be the due considerations for
this topic. The decline of the automotive sectors has also impacted the additional industries
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like transport, IT, tourism and so on, very highly. The research at Stanford has also
demonstrated the near comparison over the automotive industries in the nations like Canada
and Australia. However, this has not been particularly determining the causes of the decline
of the organizations in the country of Australia.
4. Methodology:
4.1 Introduction:
The research methodology has been meant to discuss the underpinning process and
methods followed in the facing the objectives of the research. It also analyses the design that
has been adopted by the research for achieving the processes and aims. Moreover, it discusses
the sources of data or methodology that has been needed to be used in the research.
4.2 Sources of data and justification:
Here the quantitative data has been used to recognize the growth and the decline of
the numerous manufacturing companies of the car in Australia. The going of quantitative data
has been used to seek the way in which the companies would impact the various other
popular areas of the economy. The data is gathered from the various annual reports of
Holden, Toyota, and Ford. Additionally, few data have been also gathered from the
organization’s annual reports providing various types of inputs to those popular companies
(Wright and Lansbury 2014).
The data is to be gathered also from the primary sources. Some surveys are to be done
for the clients of these popular organizations. The clients of the leading automobile
companies have been asked to deliver feedbacks. Hence the assessments are carried out on
the basis of this. The data is also to be gathered from the individuals of both the genders who
have been at the age of twenty-five to forty years. The data would be gathered by random
sampling and thus it must be helping to keep the sample group as much homogenized as has
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been possible. This has also helped to safeguard the biasness of the output of the research.
The non-probability method of sampling is helpful to decrease the project’s biases (Marks
2013). Further, the descriptive design of research has been used to retrieve the flexible and
rigid outcomes.
4.3 Details of specific techniques:
The data has been assessed from the various annual reports. This is done through
using the SPSS and the other techniques of statistics. Thus it has been helping the researcher
to control the decline of the companies of car manufacturing. Those reports retrieved from
the popular companies have been also studied and analysed. Further, the descriptive methods
are also utilized for those assessments. As random sampling technique is needed to be
followed as the data requires being gathered from the customers for avoiding the biases.
Moreover, it is also decided that the customers would not be selected on the basis of the
amount of profitability or sales. Thus it would be helpful for the researchers to undertake the
research in a successful manner. Hence there would be the transparency in the research work.
Additionally, the correlation that has been done via Pearson correlation and regression has
been also helping to meet the objectives of the research (Bryman and Bell 2015).
5. Analysis of Results:
The identifying of the customer base has been important who must react and deliver
the exact data in the study. Moreover, it has been seen that customers have preferred to buy
the cars from the other nations. The reason is that the Australian local companies have been
charging high costs and taxes from the clients. Thus they have preferred to buy the cars from
the other nations.
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Further, the organizations have been incurring various losses because of the import
tariffs and the agreements of free trades with the other nations (Agana, Reeve and Orbell
2013). Various data has been also gathered from the annual reports of the Ford, Holden and
the other popular organizations. They have taken the decision to shut down their plants of
manufacturing. Further, the reports of the organizations have been helping to create a
comparison between the organizations. This also helps in analysing the losses every year
(Marks 2013).
Australia’s statistical research has been also providing the concept of the amount of
the unemployed people. These people have lost their jobs also. This is because of the decline
in this area. The interviews and surveys have been also carried for those unemployed
individuals who are found to lose their jobs. The strategies of business followed by those
companies of manufacturing have been also highlighted and analysed in this study (Bell et al.
2014).
6. Conclusions and Recommendations:
The project has compared the growth and fall of manufacturing of car manufacturing
companies of Australia. The research is useful to find out the customer base that should react
and deliver the exact data in the study. The reason is that of the high loses that has been
taking place. The import tariffs are withdrawn making the various foreign imports cheaper
and easier. Further the customer of those organizations has preferred to make use of those
foreign cars. For the research questions the report has developed some queries. One of them
is to explore and identify the strategy of business for the industry of manufacturing in the
nation leading to the sustainability of the economy. The other instance has been the
developing and identifying the strategies of business with the help of the journals giving
success in Australia’s manufacturing Automotive Industry.
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It could be also said that the decline of the Australian manufacturing industry of cars
has been incurring a huge loss for the overall economy. It has been affecting the activities of
R&D of the various other areas. It has been affecting the automotive industry also. The
country has been possessing one of the most economies in terms of competitiveness. It has
also tried to place the process lower. It has been despite various other factors. However,
because of the avoiding of the huge sum of taxes, the Australian of Government has been
imposing large quantity of penalty. Thus the companies have taken the decision to close all
their plants. Further, the foreign cars have turned out to be cheaper. It has attracted the people
to buy them. In this way, it has lead to the decline of the manufacturing companies of
Australian cars. In this report the primary method data collection is used as the research
methodology. The analysis of the results has shown that customers have preferred to buy the
cars from the other nations. The cause behind this is that the Australian local companies have
been charging high costs and taxes from the clients. This is the reason why they have
preferred to buy the cars from the other nations.
Because of the cheaper imports, it has turned out to be easier for the Australian car
buyers for purchasing those cars. Further, the Australian economy has been surrounded by
numerous countries. The labour charge has been chap there. The expense of the materials has
also been low. This has been also suggesting that the import tariffs should be raised such that
the manufacturing companies of the local cars running the business successfully. The import
tariffs on those manufacturing organizations have been running the business a successful
manner. The import tariffs on the manufacturing companies have been resumed because of
the particular causes that must begin the operations again. Further, the better working
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situations and the larger wages are been demanded from the side of the union. This is to fulfil
the labour’s demands. Then the shutting down of the automotive industry has also affected
the research and the development. In this way, it has been crucial for the Australian
Government to seek the particular steps such that it could safeguard those companies.
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7. References:
Agana, B.A., Reeve, D. and Orbell, J.D., 2013. An approach to industrial water conservation–
a case study involving two large manufacturing companies based in Australia. Journal of
environmental management, 114, pp.445-460.
Bell, J.M., Frater, B., Butterfield, L., Cunningham, S.D., Dodgson, M., Fox, K., Spurling, T.
and Webster, E., 2014. Securing Australia's future: The role of science, research and
technology in lifting Australian productivity.
Bryman, A. and Bell, E., 2015. Business research methods. New York: Oxford University
Press.
Chen, L., Feldmann, A. and Tang, O., 2015. The relationship between disclosures of
corporate social performance and financial performance: Evidences from GRI reports in
manufacturing industry. International Journal of Production Economics, 170, pp.445-456.
Drauz, R., 2014. Re-insourcing as a manufacturing-strategic option during a crisis—Cases
from the automobile industry. Journal of Business Research, 67(3), pp.346-353.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges
and strategies in managing information systems. Routledge.
Gamble, J.E. and Thompson Jr, A.A., 2014. Essentials of strategic management. Irwin
Mcgraw-Hill.
Günther, H.O., Kannegiesser, M. and Autenrieb, N., 2015. The role of electric vehicles for
supply chain sustainability in the automotive industry. Journal of Cleaner Production, 90,
pp.220-233.
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Hua, Y., Oliphant, M. and Hu, E.J., 2016. Development of renewable energy in Australia and
China: A comparison of policies and status. Renewable Energy, 85, pp.1044-1051.
Jasinski, D., Meredith, J. and Kirwan, K., 2015. A comprehensive review of full cost
accounting methods and their applicability to the automotive industry. Journal of cleaner
production, 108, pp.1123-1139.
Marks, A., 2013. The globalization of the Australian textile, clothing, footwear and motor
vehicle industries: results in line with other western market economies. Global Economy
Journal, 13(1), pp.129-150.
O’Neill, P., Sohal, A. and Teng, C.W., 2016. Quality management approaches and their
impact on firms׳ financial performance–An Australian study. International Journal of
Production Economics, 171, pp.381-393.
Ong, S.H., 2016. Measuring the quality and identifying influencing factors of sustainability
reporting: Evidence from the resources industry in Australia.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
digital strategy. John Wiley & Sons.
Stanford, J., 2017. When an Auto Industry Disappears: Australia's Experience and Lessons
for Canada. Canadian Public Policy, 43(S1), pp.S57-S74.
Ülengin, F., Önsel, Ş., Aktas, E., Kabak, Ö. and Özaydın, Ö., 2014. A decision support
methodology to enhance the competitiveness of the Turkish automotive industry. European
Journal of Operational Research, 234(3), pp.789-801.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.
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Wright, C.F. and Lansbury, R.D., 2014. Trade unions and economic reform in Australia,
1983–2013. The Singapore Economic Review, 59(04), p.1450033.
Yan, X. and Fang, Y.P., 2015. CO 2 emissions and mitigation potential of the Chinese
manufacturing industry. Journal of Cleaner Production, 103, pp.759-773.
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