Business Research: Decline of the Australian Automotive Industry

This report delves into the decline of the Australian automotive industry, examining the various factors that have contributed to its downturn. It begins with an introduction to the industry and its significance to the Australian economy, followed by a problem statement highlighting the crisis faced by the sector. The research explores the purpose of the study, reviews prior work, and identifies gaps in existing research. The report presents a hypothesis regarding the causes of the decline, supported by figures and statistical data on car sales, labor costs, and production. It discusses the research approach, including the type of approach, study methods, sample population, and ethical considerations. The report concludes with an analysis of the industry's challenges, including political intervention, trade barriers, and the impact of global competition, offering insights into the future of the Australian automotive industry and potential solutions to mitigate its decline.

Running head: BUSINESS RESEARCH METHODS
Decline of Australian automotive industry
Name of the student
Name of the university
Author Note:

2
BUSINESS RESEARCH METHODS
Table of Contents
Title..................................................................................................................................................4
Introduction......................................................................................................................................4
Problem Statement...........................................................................................................................4
Purpose of Research........................................................................................................................6
Prior Work.......................................................................................................................................7
Figure 1- Job Loss Statistics............................................................................................................8
Figure 2- Vehicle Manufacturing and PMV Activities...................................................................9
Gaps in Prior Work........................................................................................................................10
Hypothesis.....................................................................................................................................11
Figure 3- Car Sales in Years..........................................................................................................12
Figure 4- Hourly Labor Cost in Automobile Industries................................................................13
Figure 5- New Car Production.......................................................................................................13
Figure 6- Imported and local cars statistics...................................................................................14
Figure No 7- Car Production Statistics..........................................................................................14
Probable Approach........................................................................................................................15
Type of Approach..........................................................................................................................15
Study..............................................................................................................................................16
Sample Population.........................................................................................................................16

3
BUSINESS RESEARCH METHODS
Sampling Methods.........................................................................................................................16
Process of Study............................................................................................................................17
Place of Study................................................................................................................................17
Time of Study................................................................................................................................18
Value of the Study.........................................................................................................................18
Ethical Considerations...................................................................................................................19
Conclusions....................................................................................................................................19
References......................................................................................................................................20
Appendix........................................................................................................................................22
Questionnaire.................................................................................................................................22

4
BUSINESS RESEARCH METHODS
Title
Decline of Australian Automotive Industry
Introduction
Automotive Industry is a varied range of different organizations that are involved in
designing, manufacturing, promoting and the selling of automobiles. These companies provide a
great share of economy in the country. The combined automotive industry plays a pivotal role in
the development of the country. The main topic of the research is however limited to Australian
Automotive industry which is believed to be one of the best in the globe. Australia in the recent
past had a reputation for designing and producing of large sized commercial vehicles like cars,
trucks etc. But a crisis situation led to the drastic fall in the production of the cars. In the year
2009 the total production fell to around 1,75,000 units which was much lower than the earlier
years. The research will help the readers to get an idea about the different problems that have
crippled the industry since a long time and have led to the decline of the industry.
Problem Statement
As mentioned earlier the Automotive Industry of the island continent had a great
reputation in the past because of its ability to use its own raw materials like aluminum and steel
to produce quality goods that are exported to other countries. Though Automotive industry
remains to be largest source of employment providers and the largest industry of the island
nation it has been facing a crisis situation and is slowly becoming unproductive and losing out its
efficiency which used to be its largest strength (www.swinburne.edu.au). Some of the citizens of
Australia who graduated in the early 90’s or in the mid 90’s had no such difficulties in finding

5
BUSINESS RESEARCH METHODS
jobs as the Automobile industry opened up its doors to the to the professionals who were in
search of a job. The people were employed in different positions in the factories and the offices
of these companies. However as time passed by the Australian car manufacturing industry slowly
declined. Experts believe that in the coming few years the entire Automobile industry will be
rubbed out from the Australian industrial Scenario. Such a huge unemployment drive will drive
to a negative growth in the industry. The collapse of the automobile industry in Australia will
also spell a doom for the large number of subsidiary industries in the country that provides a
variety of subsidiary products for the industries. The main types of industries in this sector
include industries like tyre manufacturing, metal parts manufacturing and many other such other
industries.
Earlier studies have found out that car manufacturers provide transferable skills, training
to the employees and a variety of technical support for the subsidiary industries that provide
support to the main industries. The collapse of the mentioned in industry can be harmful for the
PSTS industry as it will create a vacuum in both the upstream and the downstream industries of
the country. Though the management of the major car manufacturers are assuring the stability of
their R&D centers in Australia but there is a fear that the total assurance does not stand its
ground as because R&D centers will always be close to the manufacturing facilities of a
company. The large scale import in the Australian car manufacturing sector will also disturb the
engineering expertise of the country and gradually the indigenous capability of the country will
take a back step (www.swinburne.edu.au).
Apart from the above mentioned problems there lies a serious problem of political
intervention in the automobile industry of the mentioned country. According to a research by
Jason Dowling, a leading journalist of Australia the car manufacturing sector of the country faces

6
BUSINESS RESEARCH METHODS
lots of problems due to the trade barriers, tariffs and a number of taxes. Another major problem
is the policies of the new Abott Government which is moving in a hurry to implement some big
changes in the following economic sector. The main aim of the new government is to find out the
perfect ways to bring a change in the future of the car manufacturing sector of Australia. The
new government has decided to not provide an earlier promised $500 million funds for the
revival of the industry and has in turn decided to concentrate on the large scale imports of cars.
The auditing of the automobile sector has been another main drawback for the industry
(www.adelaidenow.com.au).
Purpose of Research
The researcher has undertaken this research to find out both the important causes as well
as the subsidiary causes that have crippled the Australian Automobile sector (Barnes 2016).
Therefore the researcher has included some necessary elements in the research which are as
follows;
1. To find out the primary problems behind the loss of the Australian Automobile Industry
2. To find out the secondary causes that is equally important and plays a major role behind
the steady decline of the mentioned industry
3. Another major objective of the research is to determine the steady fall in the numbers of
the employees who are involved in the Australian Automobile Manufacturing
4. The reason behind the decreasing sales figure of the vehicles is also a sign of concern for
the industries which is another main topic discussed in the following research

7
BUSINESS RESEARCH METHODS
5. The determination of the immediate measures to counter the rapid degradation of the
most important sector of the economy of the island nation is another main objective of
the following research
Prior Work
The researcher has chosen one of the most fascinating topics that have been discussed
about the most in recent times. The researcher has completed the basics before undertaking the
research. The researcher while undertaking the research gained a great deal of idea about the
different automobile makers and their history of manufacturing process in Australia. Detailed
knowledge were gained about Ford Motors, General Motors Holden, Toyota, Mitsubishi and
many more such big and small automobile manufacturers. As mentioned earlier the works of the
earlier researchers who researched on the following topic were studied extensively which
resulted in gaining some necessary and key details regarding the Australian car Manufacturing
Industry. The research found out the details regarding the problems that led to the closure of
operations of companies like Mitsubishi and also the closure of the manufacturing units of
companies like Ford, Toyota and Holden (Gratton 2017).
Research by Swinburne University has highlighted that the car manufacturing industry
does not operate in isolation. The total output of the industries accounts to more than $30 billion.
Therefore the breakdown of the car manufacturing industry in Australia poses an adverse effect
on the viability on the supporting industries of the larger concerns (Samson and Gloet 2014). The
following industry provides services to different sectors like scientific engineering, computer
systems, designing, law and many other different types of system. The number of full time job
losses has increased on a yearly basis. As mentioned earlier this will have a huge impact on the

8
BUSINESS RESEARCH METHODS
employment sector of the country as the large scale unemployment will put a huge pressure on
the other industries (Stanwick Circelli and Lu 2015).
Figure 1- Job Loss Statistics
Source- (Gratton 2017)

9
BUSINESS RESEARCH METHODS
Figure 2- Vehicle Manufacturing and PMV Activities
Source- (Edmonds and Kennedy 2016)
A lot of measures have been taken by the Government of Australia to improve the current
state of the Australian Automobile Industry. Among the variety of measures taken by the
Government the most notable is the Automotive Transformation Scheme. It is a scheme adopted
by the Government of Australia in the year 2010 under which registered business will be
receiving quarterly cash payments to revive the industries. All the concerned industries will be
receiving around 50% of investment to carry out extensive research and development process
and will receive an allowance of 15% on plant and equipment. The following scheme has two
different stages on which the first stage will have an assistance of a whopping $1.5 billion from
the year 2011 to 2015 and another staggering amount of $1 billion from the year 2016 to 2020.

10
BUSINESS RESEARCH METHODS
The government has also assured an extra amount of $ 337 million of uncapped assistance in the
coming years. Apart from the above mentioned scheme the Government has also schemes like
The Green car Innovation Fund under which the automobile manufacturing plants will be aiming
to reduce the fuel consumption and the reduction in the emission of harmful gases in the
atmosphere by means of adopting the latest technologies (Leech and Onwuegbuzie 2015). The
fund also allows companies to stress on the importance of green technology and develop cars
that may run on electricity.
Gaps in Prior Work
The earlier researches have had a huge impact on the formulation of this particular
research. A number of new things were mentioned in this following research which was derived
from the earlier studies. Though there was the use of this different type of elements in the
research the omission of some important points about the topic was the reason behind the partial
success of the researches (Garner and Scott 2013). The researchers could have pointed out to the
statistical figures of the job losses and the quantitative elements of the research. Therefore the
attempt to make the research compact and flawless has failed. The researchers also failed to take
the reference of a number of different journal articles that contained various reports and facts on
the steady decline of the automobile industry in Australia. The research works could have also
been successful if the researchers could take some interviews of the officials or employees of the
mentioned company. The new researches on the following subject must take into consideration
and include the missing parts in their research to produce a much better and complete report
(Kratochwill 2013).

11
BUSINESS RESEARCH METHODS
Hypothesis
There are lots of different reasons behind the freezing of the Australian Automobile
industry. Some of them are;
1. The market of Australia is believed to be too small in size which forbids the industry to
fully utilize the economies of scale. Therefore in order to remain competitive and keep
their presence in the market the company has decided to use cheaper foreign products like
labor and industrial parts.
2. Problems include the demand for higher wages, shorter timings by the unions of the
industries.
3. There are also problems like the Government’s decision to lower the trade tariffs and
signing the free trade agreements which are making the imports much cheaper day by
day. Such types of aggressive measures by the new Government are not helping the cause
of the organizations and are thus making the organizations.
4. Developing countries like India, China and Brazil have formulated policies that are much
more industry friendlier for the manufacturing industries. The lower cost of the supplier
chain and logistics in these countries have prompted the industries to shift their
manufacturing units in these countries.

12
BUSINESS RESEARCH METHODS
Automobile Production in Australia
Figure 3- Car Sales in Years
Source- (Kratochwill 2013)