The end of vehicle production in Australia will lead to the loss of up to 33,000 jobs in the automotive supply chain, the Federation of Automotive Products Manufacturers estimates.
FAPM CEO Richard Reilly says Toyota Australia’s decision to cease manufacturing in 2017, following Ford and GM Holden, likely will mean the complete demise of the Australian auto industry unless all industry stakeholders adopt radical new thinking.
“Traditional automotive manufacturing will go completely,” Reilly says in a statement. “Our industry is devastated.”
The FAPM says the automakers’ decisions will cost thousands of jobs in engineering, design, prototyping, R&D and assembly.
Reilly tells the Australian Broadcasting Corp. more than 1,000 small and medium-sized businesses in the automotive sector will be affected when car production ends.
Parts makers contribute A$2.2 billion ($1.98 billion) to Victoria's economy and employ up to 20,000 people.
“The volume of business by the three car companies to our suppliers is too great for them to all survive, so it’s a very difficult time,” Reilly says. “The industry is distressed and we’re very disappointed with the decision.
“We're in very, very uncharted waters at the moment. Not only are we closing down an actual manufacturing firm like a car company, but a whole industry essentially in the next three to four years.”
FAPM National President Jim Griffin says in the statement his group has been working with its members, automakers, all levels of government and other stakeholders on new opportunities for the industry and a long-term, sustainable manufacturing sector.
“We may now not have time enough to transition,” he says. “Our industry has the skills and know-how to be competitive, but we need time and assistance to reshape our businesses, to get new customers and diversify into new markets.”
FAPM expects the supply chain will experience widespread job losses leading up to 2017 unless it successfully diversifies into non-automotive industries. It calls for radical new ways of approaching manufacturing in Australia that require substantial, well-targeted government support and stakeholder buy-in.
“A lot of our members won’t make it,” Reilly says. “Our only hope now is to diversify, export or attract new models of doing business. There are still some good companies out there with innovative businesses and world-class technologies. We must have a strategy to save as many as possible.”
Australia has more than 10.5 million vehicles comprising one of the world’s most diverse ranges of brands and models. The country has the world’s third-highest vehicle-ownership rate at more than 600 vehicles per 1,000 people and one of the oldest car parcs in the world with an average age of 10.8 years.
FAPM says the Australian automotive-components industry is essential in keeping these vehicles on the road by providing everything from replacement parts to items that help owners make a statement such as alloy wheels, sound systems and racing seats or high-performance suspension, tires or engine components.
“The market is estimated to be worth between A$5 billion ($4.5 billion) and $6 billion ($5.4 billion) and roughly is split between local producers and imports, the group says. Aftermarket equipment, worth more than A$200 million ($180 million), accounts for 21% of all exports by component producers.
Meantime, ABC reports Toyota Australia President and CEO Max Yasuda has told parts suppliers the automaker wants to maintain a quality product right up until the last cars are built in 2017.
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