Australia Mourns the End of Its Car Manufacturing Industry
I used to work at Toyota in Australia, which also shut down recently. A lot of people here are saying this is about quality, but it&#x27;s really about profitability.<p>Australia&#x27;s economy is heavily dependent on mining, and China&#x27;s economic growth created a local mining boom. This resulted in heavy demand for Australian dollars, and at its peak in 2013 1 AUD was worth about 1.05 USD.<p>It was at this time that Ford (the weakest of the three Australian manufacturers) made the decision to close its Australian manufacturing operations. The high value of the local currency meant the factory was unprofitable and uncompetitive with other factories around the world.<p>The conservative government at the time, led by Tony Abbott, refused to provide subsidies to help close the gap (even temporarily).<p>Toyota and GM Holden had similar problems, and all knew that the local automotive parts suppliers needed at least three companies to sell to. So once Ford was out, the supply chain for parts became unsustainable, and the others quickly announced that they would pull out too. It takes time to close an entire industry, which is why all three companies closed their factories in 2017.<p>Around 2015 the slowdown in China&#x27;s growth led to a slowdown in Australia&#x27;s mining industry, and a drop in the AUD. It dropped to around 0.80 USD, and interestingly, Australia&#x27;s car manufacturers became quite profitable again. But the wheels were already in motion and the decisions couldn&#x27;t be reversed.<p>Australia&#x27;s mining industry has bought in a lot of money, but its impact on the dollar has done a lot of damage to the country&#x27;s export economy. There&#x27;s a term that economists use to describe this: Dutch disease. Australia has a bad case of it.<p>Edit: s&#x2F;80 USD&#x2F;0.80 USD&#x2F;