60 Years & Seven Million Vehicles: Holden Sets Another Production Record

[nota]

Originally Posted by Aych Es Vee

less cars per population, and also, far less population
Australia only had 12.5 million people in 1970.
21.5 million now

Yes that was back in those supposedly bad high-tariff days when Holden's locally produced cars alone amounted to around 27% of the total AU market - rather than all local producers combined now hanging on desperately, unsustainably, with less than 20% of total market share. It was when GM-H was Australia's most profitable company, and single biggest employer. Back in a high-dollar era when the wide majority of Aussies somehow still managed to afford and proudly purchase vast numbers of 'overpriced' and supposedly 'low quality' local cars from our 'inefficient' local producers

In more recent times the proponents of the logic for maintaining a sufficient level of industry protection are lectured and admonished by those 'modern thinking' economic rationalists that a tariff environment inevitably bred only complacency and sub-standard product, not 'world class' exportables. And yet in that environment GM-H delivered us the superb HQ range eg, which although no longer built in l/h/d for export as were previous Holdens, was still good enough to be wanted, shipped and bought overseas

Contrast yesterdays success with todays gloomy predictions, stemming from tariff reductions. Not too many years ago when Landcruiser occupied a 'top ten' market position (was it top five at one stage?) afaik this single import comprised at retail value to be somewhere around one billion dollars, much of it exported debt

And yet we are advised to persist 'walking into the face of doom' with Bracks dauntlessly recommending a continued reduction of our industry umbrella down to a nominal (terminal?) 5%

[mikmak]

^^^and who do you think they'll blame when foreign content of the Commodore and Falcon reaches 95%? You can bet your arse few will remember to point the finger at Bracks. Having said that, I am confident that Commodore and Falcon can still exist, just on a higher class than they currently reside. What needs to happen is introduction of foreign vehicles that are competent enough to slide under the large cars, while improving the appointments and quality in line with a shift up market, ie. the opposite of what Mooney tried. His strategy was "watch me make a quick buck before I beat retreat". Live and learn Mr. Reuss. We want long term strategies, not economic Gold Stars for your resume. Just ask Peter Hamburger about the legacy he put in place and the pedestal on which he shall reside.

[MonaroSS]

If I were Bracks I would recommend a 30% import tariff on all cars and trucks, including upon domestic manufactured vehicles. To be considered a domestic manufactured vehicle it would need to be 40% local content if assembled in Australia or made with 60% local content if assembled abroad.

However, all world car manufacturers are free to set up local 40% assembly in Australia or assemble abroad with 60% Aussie components and then claim up to a 100% rebate of the tariff by additionally selling half the number of vehicles sold locally into foreign markets. And the rebate would also apply pro rata.

So if Tata assembled a car in OZ with 40% local content and sold 10,000 vehicles locally they would pay a 30% tariff. But if they sold another 5,000 of those vehicles outside of OZ then they pay zero tariffs on the local sales. Or pro rata if they sold 10K locally and 2.5K overseas they would pay a 15% tariff on the local sales. Or they could build the same vehicles in say India but with 60% Aussie content and so long as they sold another 50% outside of Australia of those foreign assembled high Aussie content vehicles they could still sell in OZ with a zero tariff.

So such a tariff only aids the local manufacturers over foreign competitors if the locals have up to a 50% export program. And to sell those vehicles overseas they must remain competitive in the larger world and not get slack on technology or quality. So this safeguards against protectionism. But it also does not deprive Aussies of foreign vehicles tariff free so long as those manufacturers included Aussie content being 60% if they assemble overseas or 40% if they set up shop here.

And this tariff need not add any cost to high-end vehicles that are never going to be able to include much Aussie content let alone assemble in OZ. This is achieved by the luxury tax being scrapped to balance that out. So such a tariff would have little change in price for anything north of the current luxury tax threshold. It would also have little effect on Holden or Toyota prices, but Ford would have to start an export program. However it would have a considerable effect on limiting lower priced vehicles under the Commodore/Falcon/Camry by adding up to 30% to the price unless they include local assembly or inclusion of Aussie content from Aussie suppliers in their foreign manufacture.

This would make the local manufacture and assembly of smaller cars by Holden, Ford and Toyota very viable and indeed make it appealing for other brands to assemble here and export from here, as they must do to get the rebate.

Such a scheme does not shut out foreign makers as all makers, whether they assemble locally or overseas can access the rebate and are welcome to assemble locally. As Holden, Ford and Toyota would likely make smaller cars here under such a scheme, including I4 engines, then some foreign makers may send CKD kits and buy local brakes, wheels, steering components and engines to fit in their vehicles to satisfy the requirements. It may even mean that some companies like the Europeans and their Chinese or Indian partners may join with others and locals in multiple joint venture arrangements to build and own a local engine plant, which is one of the quickest ways to add local content to a CKD kit. And such a plant would also then generate export sales back to their home markets to amortise the costs.

Such a scheme would guarantee that either Aussie Car manufacture or part suppliers sold about half the content of total local car sales and had about a further 25% of that in exports. But to get that business the local made cars and parts would have to qualify by being competitive in the world market place, because without 50% of their product being sold overseas they would not gain fully from the tariff protections. This protects their local sales; but only if they remain competitive with the rest of the world.

[RedVee8]

I cannot justify reducing past 10%, and I think that the 4wds should come back up to 10%.
There has to some protection for the 'locals'.