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Holden departure 'no surprise'

13 December, 2013

Innovation leading to differentiated products is the key to ensuring a viable industry, Charles Sturt University (CSU) Professor of Economics Kishor Sharma has said, as state and federal leaders continue to discuss the uncertain future of car manufacturing in Australia.

Earlier this year, Professor Kishor Sharma from the School of Accounting and Finance at CSU, said propping up the Australian car manufacturing sector with public funds was a waste of taxpayers' money, recommending instead that the money be spent on supporting workers who lose their jobs.
"The only way to make the Australian manufacturing sector viable is through reforms in the labour market and infrastructure sector to reduce cost of production," he said.

"In addition, we need to be innovative in making new design cars for higher niche of the market in Australia and overseas. Producing standard cars in Australia is just not viable given the higher cost structure."
Professor Sharma said the fact Holden followed Ford's decision to withdraw from manufacturing cars in Australia by 2016, does not come as a surprise.
On the fate of the only remaining local car manufacturer Toyota, Professor Sharma said: "The government should carefully think and design incentives in such a way that the industry has motivation to invest in designing differentiated, rather than standard, products which can be marketed in both Australia and overseas.

"This means we need to invest more resources in research and development."
Professor Sharma said car manufacturers are owned by multi-national, foreign companies with the capacity to produce parts in countries like Thailand and Vietnam where wages are up to 70 per cent cheaper than those in Australia.

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Lloyd | Wednesday, December 18, 2013, 1:19 PM
People seem to forget the appreciation of the $A at the same time that tariffs were reduced. I am sure Senator Button wasn't considering a $A at parity with the $US when he proposed his plan. What we needed was a 'tariff' that was imposed on imported vehicles relative to the exchange rate. This would have given the local industry more stability and competitiveness. When the $A dropped it could be removed. The consumer would not have noticed as car prices would not have increased and the government would have pocketed money. And please don't say Free Trade Agreements prevent this. Our government would just need to be inventive as to what they called the 'tariff'. (Every other country does this!) Now when the $A drops consumers will complain about the high price of cars and we will not be able to do anything about it.
Lou Furbadamo | Friday, December 20, 2013, 5:13 PM
Who can forget the Profs earlier, 30/05/2013 prophetic, Industrial Medusa Touch”, stirring up a pathetic hornet’s nest, when he fatalistically pronounced “There was no future for Australian car makers” and that prop-up Gov. assistance is a waste of taxpayers’ money, and that funding should be targeted elsewhere. Talk about criminally throwing the baby out with the soapy bath water! I emphatically, contra concluded that, “Once again we had typical desk boffin, giving dubious expert advice, from a comfy, hands free, academic sponsored desk location, seemingly a world away from reality, the factory floor or production line experience… shielded and not directly feeling the problems, frustration, imminent pain & resulting family suffering. Dispassionately, casually presenting the standard Pontius Pilate, wash your hands, cleansing approach. Spruiking obliging Gov & community perception and plausible acceptance. For pollie convenient closure and demise of Australia’s Auto manufacturing life blood and industrial work places”. Looks like devious sacrifice convenors, doom facilitators and axe wielding multi national high priests will soon have their sordid way with the scrapping of our hard established, better deserving Auto industry. They’re now, unfairly coming in for a final wreckers gloat? But no water, turps or nasty trico, can wash the filthy stench stupidity from treacherous back stabbers and make it fine. They will be death knell remembered for their contribution to the final destruction! Oh how it pains me to imagine what my dear departed, loyal 30 years service Dad, would think about what they’ve finally callously done to his beloved Holden! But, what amazes & disturbs most about dubious, arguably preset, jerquer recommendations. Is that, no other country is expected to comparatively operate and perform profitably under such handicapped, over burdened Aust. industrial environment and hostile political and economic conditions. Suffice to say that typical sham assessments don’t acknowledge & factor: 1) That whereas we’ve reduced our trade barrier to near zero, competitor countries have up to 80% tariff protection. 2) Many have strict quotas and would never permit imports to swamp, jeopardise or overwhelm their local manufacture. Absurdly, Australian manufacture is now only around 11% of our total sales market. Ie. Insanely, only 106 thousand units, compared to 933 thousand imports! What sham minded, clueless, apathetic travesty! How can our factories compete with such puny, kick sand in your face market share against the big boys, without elsewhere, mandatory due special assistance boosters. Many foreign auto manufacturers are part state owned, government enterprises and heavily subsidised to assist them compete, especially for export to Oz. The US has gladly poured billions to bail out their car giants, yet our yokels quip about a few hundred thousand, to retain all those key jobs & benefits. Clearly foreigners see what our snorting ding bats don’t? 4) Germany and others, offers substantial new car rebates to loyal customers to boost their local sales over imports. Why Not Here, to Viagra invigorate limp local car appeal again? 5) The US Fed has boldly stimulated its economy by drastically dropping interest rates & dollar. Our Reserve Wank, has pathetically hyped- on. 6) Most Countries force their Gov. departments& instrumentalities to buy local. No such support in Oz? 7) No other nation, has abandoned car manufacturing once established. We risk becoming a manufacturing leper and inherently incompetent laughing stock. 8) No other comparative manufacturers operate under such unlevel, burdensome restrictions, regulations and crippling, redundant three tier Aussie Gov. imposed gouging & overheads! So how can anyone credibly reach the Shamric conclusion and say we’re deservedly that bad, compared to the rest? Commiserations Oz, Furbo!