Toyota still has a largely Japanese image in Australia, even though it has made cars locally since 1963 and has been the country’s biggest vehicle manufacturer for the past 10 years. Toyota is also Australia’s largest automotive exporter, shipping more cars in 16 years than Holden did over 63 years and Ford did in 91 years, and is the only one of the three to export more than one million vehicles.
Australia was the first country outside of Japan where Toyota made vehicles, which is why it fought so hard to keep its local operations running. It’s believed to be only the second Toyota factory in the world to close. Toyota Australia had secured a large export order to sustain its local operations, shipping seven out of every 10 Camrys to the Middle East over the past 20 years. But its fate was sealed because the local parts supply base could not survive solely on orders for Toyota. The majority of local suppliers manufactured components for all three brands.
Over the decades, the Australian car industry employed generations of workers. But the taxpayer has largely footed the bill, shelling out more than $5 billion (Australian dollars, so about £3.06bn) in industry assistance over the past 10 years alone.
The car industry says it invested three dollars for every one dollar of taxpayer funds. That figure may be debated but one thing is certain: the end was inevitable. With low – or zero – import tariffs over the past decade, Australia became flooded with foreign cars that were either cheaper to buy than local models or better equipped, or both.
There are now more automotive brands sold in Australia than in mainland Europe, the UK, the US or Japan. This had the effect of gradually eating into the volume Australian car factories needed to remain viable. At their peak, Holden built 165,000 cars in a calendar year (2004), Ford built 155,000 (1984) and Toyota built 148,000 (2007). But last year, all three sold a combined total of just 87,000 locally made cars.
Fifteen years ago, the Holden Commodore led the market with close to 90,000 sales per year. Today, Australia’s top-selling car notches up a little over 40,000 annual sales.
There is not a car factory in the world that can survive on such small volumes, other than luxury brands that command premium prices. The UK car industry survives because it exports eight out every 10 cars it manufactures (in 2016, 1.35 million of the 1.7 million vehicles produced).
But Australia couldn’t export its way out of trouble because it is surrounded by developing countries with much cheaper labour costs. The minimum wage in Thailand equates to less than $2 an hour (Australian dollars, so about £1.20). Car assembly line workers are paid more generously – about $6 an hour (£3.65), or close to $12,500 a year (£7660) – but it’s nowhere near the average Australian car manufacturing worker wage of $69,000 (£42,850).