Aussie demise a heads-up for Canada: report

A CANADIAN newspaper has sounded warnings that the demise of the Australian car-making industry could one day repeat itself in the United States' northern neighbour.

The Ontario-based Financial Post warned today that the future of US car-making giants Chrysler and General Motors in the country was not guaranteed once production commitments – put in place as part of bankruptcy bailouts following the 2008 global financial crisis – expire in 2017.

The article, titled “Demise of Australia’s auto industry a ‘cautionary tale’ for Canada”, draws parallels between the market conditions in Australia, and compares them with the shift in US car-making to lower-cost countries such as Mexico.

“I think it (the Australian car-making industry’s fall) is a cautionary tale for Canada,” Jim Stanford, a chief economist at blue-collar workers’ union Unifor, told the Post.

In a big contrast, the article points out that Australia does not have a country the size of the US as a neighbour, a point of difference that makes Canadian car production viable.

Australia’s car industry will officially wind down in late 2017 when Holden and Toyota shutter their lines for the last time, ending an industry that will have almost spread across 70 years of constant production. Ford has flagged it plans to exit a year earlier in late 2016.

Over the first seven months of this year, Mexico and South American country Argentina have accounted for almost 8000 new-car sales in Australia. No vehicles are imported from Canada to Australia.

In contrast, Australia’s largest port for importing vehicles is in Japan, which over the same period has accounted for 194,583 new vehicles landing on our shores.

Sales of Australian-made cars have fallen to just 59,826 over the first seven months of this year, down 4.8 percent on the same period in 2013.