Australia’s three domestic auto makers built 324,118 vehicles last year, down 3.2% from 334,772 in 2007.

But new VFACTS data from the Federal Chamber of Automotive Industries shows the bottom fell out of the Australian market in December, when only 14,678 vehicles were produced. It was the lowest monthly output of 2008 and the lowest December in at least seven years.

December production represented a 29.0% decline from November’s 20,659 assemblies and a 30.2% drop from 21,040 builds in like-2007.

Ford Motor Co. Australia Ltd., GM Holden Ltd. and Toyota Motor Corp. Australia Ltd. are the country’s only domestic producers, as Mitsubishi Motors Australia Ltd. ceased assembly of its 380 large sedan in March. Six years ago, local auto makers built 408,186 vehicles.

Domestic sales of locally manufactured vehicles in 2008 slipped 14.5%, or 29,053 units, to 171,432, the lowest figure since at least 1980.

Deliveries of locally built vehicles accounted for half of the Australian market a decade ago but last year represented just 16.9% of a total 1,012,164 units.

The outlook for domestic auto makers this year remains uncertain.

Toyota Australia, the country’s largest vehicle exporter, already has announced eight down days between March and May due to falling demand in domestic and export markets.

The slowdown is despite a record year for the auto maker in 2008, with more than 100,000 units exported, mainly to the Middle East, Bernie O’Connor, Toyota Australia corporate services executive director, says in a statement. The auto maker produced more than 140,000 vehicles last year.

GM Holden’s exports reportedly jumped 65% last year to about 60,000 units.

Industry analysts believe the recent drop in the value of the Australian dollar will benefit domestic auto makers by making their vehicles more competitive with imports.

Australian Automotive Industry
Monthly Production Volumes
2008 2007 2006 2005 2004 2003 2002
Jan 21,152 18,666 14,044 14,677 20,423 21,211 19,315
Feb 32,303 29,376 28,276 32,975 34,798 35,769 27,891
Mar 26,393 29,433 30,802 34,626 38,824 37,440 29,119
Apr 28,721 22,633 25,870 33,616 30,233 29,158 22,043
May 35,180 33,274 33,630 38,845 36,971 36,364 31,251
Jun 29,884 29,195 23,568 37,663 39,164 34,788 28,979
Jul 33,121 31,813 22,643 32,146 25,842 36,641 27,482
Aug 29,397 27,713 34,224 36,318 37,098 33,973 27,903
Sep 28,511 28,563 28,944 36,514 37,333 37,188 28,894
Oct 24,119 33,320 33,020 36,462 37,130 39,571 34,695
Nov 20,659 29,746 31,536 33,167 39,306 34,237 33,466
Dec 14,678 21,040 20,403 21,976 28,192 31,846 29,436
Total 324,118 334,772 326,960 388,985 405,314 408,186 340,474
Source: VFACTS

Meanwhile, Opposition Liberal Party industry spokesman Eric Abetz says state government procurement policies favoring smaller vehicles on environmental grounds are hurting local auto makers.

He tells The Australian newspaper Queensland and Tasmania require cars to comply with a greenhouse-gas emissions standard, now met only by European imports. Further, New South Wales, Western Australia and the Australian Capital Territory stipulate vehicles must have 4-cyl. or smaller engines, which excludes the locally built Ford Falcon, Holden Commodore and Toyota Aurion.

“In their haste to introduce environmentally friendly policies, state governments have moved too far ahead of our local manufacturers, to the point they have put in place policies which actively exclude them from the market,” Abetz says.