Fate of GM, Toyota Factories Hangs on Australian Election
The fate of Australian car plants run by General Motors Co. (GM) and Toyota Motor Corp. (7203) hangs on the Sept. 7 election that pits a government committed to subsidies against an opposition vowing to scale back support.
GM’s manufacturing unit in Australia, Holden, is waiting on the result before deciding on investments in the country beyond 2016, as Prime Minister Kevin Rudd styles the contest as a vote on the industry’s future.
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Cars made in Australia slumped to 13 percent of domestic sales in 2012 from 80 percent in 1984, according to data from Ford and the Federal Chamber of Automotive Industries. The value of Australia’s car exports in 2012 was 29 percent below the average of the previous 10 years, government data show.
Small Market
Abbott’s policy isn’t “going to be enough to keep the manufacturers here long-term,” said Tony Lemmo, chief executive officer of Autoteam Australia Consulting in Melbourne. “Our market, quite frankly, is not big enough for a manufacturing facility.”
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Ford Motor Co. (F), set to close its Australian car lines in 2016 after nine decades, said in May that the unit’s costs are four times those of its Asia divisions and wouldn’t be sustainable even with a doubling of aid.
http://www.bloomberg.com/news/2013-09-01/fate-of-gm-toyota-factories-hangs-on-australian-election.html