GM’s recent announcement that it will pull out of Australia in 2017 is causing ripples in the nations’s manufacturing industry. Toyota, the sole remaining automaker to have local production in Oz, says it will face “unprecedented pressure” if it were to continue building cars there as the supplier base shrinks.
It appears Ford’s decision to pull out by 2016 has created a domino effect, in which local suppliers of everything from wiring to paint coating will face uncertain futures. Potential interruptions in the supply chain and issues with the already rising Australian dollar may make it prohibitive for Toyota to continue operation of its Aussie factories.
According to Automotive News, the Australian auto industry has about 150 suppliers and employs 42,000 people. In the same article, GM says it costs about US$3400 more to produce a car in Australia thanks to high labor costs and the aforementioned currency exchange rate.
Some component manufacturers have been planning for this shift, and are looking into military or solar applications. Others have stated they would shut their doors if Toyota were to pull out. Says one supplier representative, “If automotive goes, manufacturing is finished.”
Toyota has been building cars in Australia since 1963, and currently makes the Aurion, Camry and Camry Hybrid models both for local sales and export to 13 markets in Oceania and the Middle East.
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