Car Manufacturing Industry in Australia

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Introduction

This report is going to discuss why the car manufacturing industry in Australia is closing by using five forces analysis which are the barriers of entry, competitors, purchasing power of buyers, supplies and subsidies segments, and a life cycle analysis.

Five forces analysis

 Barriers of entry

To being with the barriers of entry which including strong currency and higher labor have the most significant impacts on auto making industry. In 2013, Holden would cut 12% of its workforce and has announced a three-year pay freeze agreement to the reminding workers to keep operates the manufacturing plant in South Australia (Thurlow, R. 2013). Moreover, a strong currency not only lead to less competitive on nation exportation but also increases the amount of cheaper imports from emerging market like China and Thailand caused by globalization. For instant, China which enjoys plenty of human power which strengthen its competitive of export products (Curran, E. 2013). Australian manufacturers, therefore, have lower competitive power against imported goods and services. Although the total number of car sales increased, the sale of Australian-made vehicles has significant (20%) fall as Thurlow, R. & Glynn, J. 2013, stated. It seems barriers of entry blocked the auto making industry hardly.

 Power of rivalry

Furthermore, small domestic market contributes highly damage to automotive industry. According to the Australian’s department of industry, there are 66 vehicles brand can be chosen by customers, compare with 51 in U.S (AMS), according to Timothy,C. 2014,even less only 36 brands. Therefore, local car-makers are hard to survive in this tiny market without any advantages. Unfortunately, active used-car market which cars...

... middle of paper ...

...ts See Risk of Australian Recession, New York, N.Y.

Fraser, K., Watanabe, C. & Hans-Henrik Hvolby 2013, "COMMITMENT TO SERVICE QUALITY IN AUTOMOTIVE DEALERSHIPS: RESULTS FROM AN AUSTRALIAN PILOT STUDY", Journal of Services Research, vol. 13, no. 1, pp. 7-29.

Thurlow, R. & Glynn, J. 2013, Imports Pummel Australian Car Makers --- Strong Currency, Shift to Sport-Utility

Vehicles Cause Local GM, Toyota Operations to Lean on Government Aid, Hong Kong.

Glynn, J. 2013, Australian Manufacturers Yet to Solve Strong Dollar, New York, N.Y.

Thurlow, R. 2013, Auto Makers Struggle in Australia; Industry Battles Cheaper Imports, Rise in Australian Dollar, New York, N.Y.

Ford's Exit Down Under; Australians have paid again and again for car tariffs 2013, , New York, N.Y.

http://www.goodcarbadcar.net201403usa-auto-sales-brand-rankings-february-2014-ytd.html

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