End Of An ERA !

It was a sad day yesterday in Geelong.    The last Ford cars rolled off the production line and six hundred employees received their termination pay cheques.   Unfortunately, worse days are to follow.  Next year General Motors will end its car production here in Australia and a few months later Toyota will follow.  The closure of Australian car manufacturing will probably result in the loss of six thousand five hundred direct jobs, plus an unknown number in the various industries that feed in components.

Over the years a host of International car companies have tried their hand in Australia - and pulled out a few years later.  Car manufacturing was concentrated in Victoria and South Australia but some New South Wales residents may remember Leylands ill-fated move to establish a factory here in Sydney - resulting in the arrival of the " P-76  " !

The use of robotics has reduced the human workload in the car industry, but it is still labour intensive and our high wage regime puts us at a disadvantage compared to Asia.  As a result, the Australian government was forced to prop up the local industry with ever increasing subsidies and to protect locally produced cars with tariffs on imports.   Relief in this sector has lowered new car prices and we now drive a more modern - and safer - car fleet.   The sight of a ten year old car on our roads is becoming rare.

The way ahead for what we term the "family car "is uncertain.  For a while it looked like the internal combustion engine would give way to either the hybrid or the entirely electric car, but now the development of the driverless car is reaching frenetic pace.   The concept of hiring when we need transport rather than owning something that spends most of its time idle is an entirely new concept. Traditional car manufacturers are watching market trends with trepidation.    This seems to be the biggest transition in people moving since the Model T replaced the horse.

We seem to be heading in a new direction which involves almost every aspect of life as we know it.   If we no longer own cars, the suburban garage which is now part of every home becomes redundant,and that certainly solved the parking problem that plagues those living in high rise apartments.  Traffic gridlock becomes a thing of the past if small driverless "pods " replace moving people from transport hubs to their final destinations.

So far, nobody has meaningfully suggested a cost factor but we are assured that driverless cars will rock the insurance industry.   The huge cost of greenslip insurance could drop to a few dollars and if we no longer own a vehicle we would have no need to insure it against theft or accident.   So far, the governments need for tax dollars and how that will apply to fleets of electric hire cars - is unknown.

It seems that we are on the cusp of a changing era.  Car manufacturing in Australia is about to become a thing of the past - and the future is unknown.   We will now have the benefit of world manufacturers offering us their products at very competitive prices without the distortion of tariffs to protect local production.   As a result, the guarantees offering and the price of lower range new cars has completely decimated the used car market price.   We can afford to be driving a shiny new world class car.

While it is sad to see iconic models like the Falcon and the Commodore retreat from the local market, the timing is right for Australia.   The car world is stepping into the unknown and without a car manufacturing industry all the benefits and few of the losses seem to be headed our way.