About 5 years ago I attended a Northern Regional industry development forum, the key note speaker was the Australian CEO of GMH, he was asked numerous times about the high cost of Australian auto workers. On every occasion he dismiss this, he pointed out that the labour component of building a car was very small at about 4 or 5%
He stressed that the biggest gamble in auto production is choosing and developing a product that the market wants. Journalist pushed him on Chinese competition. He rightly pointed our there was none. And five years later " Great Wall sales have fallen, Cherry" is hardly house hold favourite, Thailand basically only still makes utes and India a non-starter.
He said Holden's competitors were still from other high labour countries like Japan , the UK Germany and that even South Korea was not a cheap wage country any more.
So all this self defeatism Is purely political driven. If we look at the current Auto industry in Canada (high wage, high dollar) comparable economy to Australia the labour cost of a $41k car is only $1,740. or 4%. Canada is successful because they chose to build the higher end GM products to a noticeably better standard to other competitors. (And incidentally built on the Holden developed commodore rear wheel platform) Australia purchases 0ver 700 cars per 1000 people compared to the UK with about 500 yet the UK has both a high pound and a booming exporting auto industry now producing cars for most major brands and 17% growth last year.
Holden's survival is more about building something from scratch that the world wants to buy not a couple of cheap low cost "world cars" for the local market.
http://www.caw.ca/assets/pdf/590-Auto_Price.pdf
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