September 19, 2016

Horse 2165 - Three Tombstones

With the last Ford Falcon having already left the body shop and the Toyota Camry and the Holden Commodore also facing the end of the line, I thought it worthwhile to look at the fate of these three cars and why it has come to this.
The general problem that we have in Australia is that the cost of production is too high. Bear in mind that I didn't say that the cost of wages was too high because you could have an entirely automated production line with only a few technical managers giving oversight and tending to the machines when they failed and there would still be a problem. If wages were effectively as close to zero as they could be, it still wouldn't be good enough. I also didn't say that taxation was too high because for years the car makers have been collecting billions in government subsidies and then sending the profits back overseas for tax purposes. With an effective taxation rate of less than zero, it still wouldn't be good enough. No, the thing which ultimately killed off car manufacturing was when the Federal Government decided to take the subsidy payments away. That and the fact that other governments were waving bigger piles of money to the car manufacturers to set up shop over there.
I digress. This is a specific blog post of what should have been and what will be. Que sera sera.

Toyota Camry:
The Camry is pretty well close to the über example of a world car that has no identity and could literally come from anywhere. Apart from the badges which appear on the back of them, depending on the market in which they are sold, Camrys are practically identical the world over. A car for the Americas is no different to one made in Thailand and sold throughout Asia and is also no different to one made in Australia and then sold in South Africa. Toyota derive some benefit from testing cars in Australia but they don't specifically develop them for here. Just like the Yaris and the Corolla, the Camry will become an imported car like every other car sold in Australia but it will be entirely irrelevant where it is built. Australian Camrys might have bits from Japan, Mexico, Thailand, Canada and myriad more other places but no one would be any the wiser and nor would they care.

Ford Falcon:
The Falcon is pretty much dead, buried and cremated. Almost certainly, Australia will not be getting the Taurus and nor would it need to. The Mondeo already fills Ford's marketing strategy for Australia and the Focus and Fiesta fall in nicely behind it, as they do in the rest of the world. Ford have replaced the functions that the Falcon served as its performance car in Australia with the Mustang and it must be said that the Mustang is about selling an image more than anything else because when it comes to things like panel fit, it's rubbish.
There might have been a faint possibility that the Falcon could have been given a stay of execution by replacing the Crown Victoria in the North American market but Ford killed that one off. The hole left behind by the Crown Vic's departure has been mostly plugged by the Toyota Camry Hybrid and Ford have found themselves trying to claw their way back into the market with their own Fusion Hybrid to little success.

Holden Commodore:
General Motors have indicated that they intend to keep the brand Holden alive but beyond 2017, its actually pretty meaningless. What it does mean is that unlike other places in the world where they have several brands on the same lot, they will be able to put anything on sale and shove a lion on it.
The Commodore is a story of collective idiocy from the Renaissance Center in Detroit. The Commodore had sort of previously appeared in America when the Monaro was sold as the Pontiac GTO and then the sedan became the unimaginatively named Pontiac G8 before that brand was killed off. It was them sold as the Chevrolet SS and has always looked unimpressive in terms of sales as only the 6.2L V8 variants have been sold. It would have made more sense to sell the Commodore as the Impala in its entirety, from the 3.0L V6 all the way up the model line and included all of the variants including the wagons and utes but I suspect that the Union Of Auto Workers in America had more political clout inside the company than Australian workers who were out of sight and out of mind and so far away that they may as well have been on the moon.

It's sad to look at the end of an industry and of course I realise that this is part of a much broader picture where just about every manufacturing industry is going away. The description in the national anthem that "we've golden soil and wealth for toil" wasn't supposed to be a business plan. Nevertheless, the sad fact remains that all three of the car makers were always overseas corporations and they have acted rationally and as you would expect in the pursuit of profits. My offer to buy one of the Australian manufacturing operations for $1 still stands but it looks as though the three factories which exist are destined to become tombstones to Australian industry.
Even if costs were zero and we were throwing piles of money at the car manufacturers, they still would have left anyway. Que sera sera.

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