Toyota threatens to pull out of Australia

[mbruce]

27th October 2007, 10:00 WST

Australia's car industry is facing a major setback, with export leader Toyota threatening to shut down its local operations as rising interest rates push the Australian dollar to record highs.

Toyota yesterday called for an immediate freeze of tariff cuts to help the struggling multibillion-dollar industry, the Australian reports.

The car-maker has warned the government and the opposition that thousands of jobs are at risk unless the government intervenes.

Holden, Ford and Mitsubishi yesterday demanded the coalition and Labor commit to a substantial cash injection.

Labor and the coalition have both committed to reviewing next year an industry support package that is due to run out in 2015.

However, Industry Minister Ian Macfarlane and Labor industry spokesman Kim Carr refused to shift their public positions yesterday.

“Changes in the strength of the Australian dollar affect all manufacturers and businesses have to manage that risk,” Mr Macfarlane said.

“Some of the car manufacturers that sell both imported and locally made cars in Australia have a natural hedge -- a strong dollar may reduce profitability of exports, but the cars imported in US-denominated contracts will be relatively cheaper.”

AAP

[J e r e M y]

I don think the government can do much thou..

[selyaT]

LOL this is what the local manufacturers do when they don't want to the government to further cut tariffs...

You see the local car manufacturers have always enjoyed a nice protectionist tariff policy that stops the import boys getting in cheap with their arguably superior cars...

Toyota stole this little trick from Ford Australia, back in 2005

[MR22ZZ]

I don think the government can do much thou..

???? where do you learn your politics? the government controls tariffs.

[CjRasmu]

“Changes in the strength of the Australian dollar affect all manufacturers and businesses have to manage that risk,” Mr Macfarlane said.

I reakon thats about it, the companies should not be asking the government for money just cause our economy is getting stronger. Just cause they aren't making as much profit. They might have to put prices up to cover extra cost, but pulling out all together is rediculous.

[xoom]

thats it the Australian economy is just too strong for my business ..... im not making as much a profit ..... im packing up and going home ....... what a joke ........

[MT]

Mr Macfarlane is a knob and needs to stop ruining australian businesses

[selyaT]

The cycle:

Ford Australia, GMHolden, Toyota Australia, Mitsubishi Motors:: SH!T, they're finally gonna lower the tariffs that we've hidden behind for 60 years... Let's threaten to pull out of Australia citing dogsh!t reasons (again).

Aus Govt:: F*CK! We will lose XX% of GDP without a thriving car industry... Let's leave the tariffs where they are or even bump them up a bit so the local manufacturers stick around, even if Ford and Holden are the most unreliable heaps of cr@p on the roads...

Ford Australia, GMHolden, Toyota Australia, Mitsubishi Motors:: Sick B) it worked (again), suckers!!! Time to build another 4-tonne dinosaur V8 :D WTF is peak oil????

The End

Edited October 28, 2007 by Tayles

[CAP]

I was reading an article that stated the difference in cost between building a large car and small car isn't all that much. The large difference in sales prices comes down to being able to justify a larger margin because of the perception of the larger car being worth more.

This is why Australian Manufacturers stick to building large cars, they can build less but have larger margins. But hopefully this will change when Ford starts to build the Focus locally after the Geelong Engine operations wind down and stop building the Barra 4.0L 6.

[selyaT]

I was reading an article that stated the difference in cost between building a large car and small car isn't all that much.

Yep, IRTS (increasing returns to scale)

The large difference in sales prices comes down to being able to justify a larger margin because of the perception of the larger car being worth more.

Yep, consumer perceptions of price and value => People are idiots