Automobile Industry In Australia

872 Words4 Pages
1. Introduction
Automobile firms like GM Holden, Toyota, and Ford decided to shut down their plants in Australia and shift to another country. The automobile industry ranks among the crucial significant business phenomena of the twentieth century and remains vitally important today. Other words, the world’s automobile industry has played an important economic role (Wynn-Williams, 2009, p. 2). It is now is one of the largest industries in the world, the industry of industries (Drucker, 1972 , p. 176). It can be seen that there exists a fairly wide degree of consensus among car industry commentators over a large number of issues. The industry has found it hard to adjust to recent challenges and is no longer much valued by the capital markets. The slowing down in car sales in the more mature markets such as North America and Western Europe similarly with the much faster growth of sales in the relatively countries of the third world like China, India. Consequently, this assignment firstly overviews Australia’s automobile market-the operations in Australia and then highlight both challenges and opportunities in China, a potential automobile market in order to suggest a way for Holden entering China’s market. The assignment is intended to investigate the competitive advantages of China and how China could attract many foreign automobile companies in short period. The assignment also uses a number of journals, books, reports, and internet sources to deeply understand the Australian automobile context as well as China’s context.

2. Operations in Australia
2.1. The factors that changed the competition landscape in the automobile industry
First, the automobile industry is in the decline period of its life cycle (Whytcross, March 2014) w...

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... have to pay depreciation and rent like plant ownership. Hence, the automobile industry has been influenced on the decrease of sales volume. Next, there are some impacts on the competitiveness due to the high Australian dollar such as the significant increase import penetration, because vehicles are imported Australia will have a lower price in comparison with vehicles are manufactured locally and making exports more expensive on the global market. In other words, far cheaper imports have flooded the Australian market. Indeed, local manufactures’ lack of competitiveness has resulted in falling sales volume (Whytcross, March 2014). Thus, based on the strategic trade theory, local companies like Gm Holden, Toyota, and Ford do not have a competitive advantage. Because the main idea of the theory is that trade policies can raise the level of domestic welfare in a give

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