Present Condition of Australian Car Manufacturing Industry†Free Sampl

Question: Discuss about the Present Condition of Australian Car Manufacturing Industry. Answer: Introduction In continues changing economies, industries are being restructured. For that reason, responsibilities of the occupations are changing. Therefore, keeping the skills up-to-date is extremely important for meeting the employment demands. Appropriate intervention programs and strategies are required to for avoiding issues associated with increase in unemployment. Now, major car manufacturing organizations like Toyota Motor Corporation Australia, Ford Motor Company of Australia and General Motors Holden has focused on using low cost structure for car manufacturing [2]. As a result, it has affected the overall economic condition of Australia with the challenges related to social disadvantage and high levels of unemployment. Many article and newsprint has been used on identifying the possible factors that influencing the Australian car manufacturing industry. The essay will look to evaluate present Australian car manufacturing industry and its impact on the workers pay condition. The essay also aims to analyze the impact of Australian car manufacturing industry on overall domestic and international demand. Description As per the article by [9] the doors for Australian car industry are on the verge of closing forever. General Motors of Australia is likely to be the last light in the Australian car manufacturing industry. Toyota and Holden were able to continue on manufacturing for 12 months more because of closing decision of Ford. Themanagement of Ford Automobile has highlighted that higher production volume of the organization with very limited demand from the market created massive challenges for sustaining business in long-run. For that reason, themanagement of Ford has seen no other option than closing the production unit in Australia. As illustrated by [1] relative contribution of manufacturing on Australias economic output is declining steadily. Manufacturing share of gross domestic product (GDP) reduced from 13% in 1974 to 6.6% in 2013. As per Australian Bureau statistics, total number of people employed in Australian car manufacturing industry has reduced by 10.4% in past 10 years. Several factors like technological advances, government policies and changes in customer preferences have contributed to the decline in the number of total people working in the manufacturing industry. Around 37% of the employees directly employed by the prime three cars manufactures including Ford, Holden and Toyota in Australian market [10]. Figure 1: Number of people employed in transport equipment manufacturing (Source: [3]) The above figure highlighted that Australian market has seen consistent drop in the number of people working in the automobile manufacturing sector. It has been estimated that around 200,000 jobs is likely to be lost by the end of 2017 in automobile fracturing sector in Australian market [11]. For that reason, government of Australia has focused on developing different alternatives plan in order drop in demand of car manufacturing industry. Different studies have highlighted different factors that can affect the overall demand of car manufacturing industry in Australian market. For instance, Toyota is among the largest car manufacturers present in Australian market. In fact, Australia was the first country where Toyota has developed cars manufacturing facilities apart from Japan. However, Toyotamanagement have understood the fact that they have relied heavily on export activities in order to maintain the Australian operation at the desired level. As a result, it actually increases th e overall cost associated with the operational procedure, which eventually affected the overall profit margin of the organization. Manufacturing facilities of Toyota in Australia was only the second Toyota factory to close due to lack of demand in the market. Over the years, cars manufacturing industry in Australia has employed generation of workers. However, taxpayers have massively footed the bill, as it shells over $5 billion over the past decade alone. The business analysts have illustrated that it invested around 3 dollars for 1 dollar of taxpayer funds [5]. Now, with the utilization of zero or low tariffs for more than decades, the entire market of Australia was flooded with foreign cars, which was relatively cheaper than all the available local models. Moreover, increasing popularity of different automobile brands in Australia has provided lot of alternative options for the people at the time talking any purchase decision. It has been assessed that more automobile brands are present in Australia compared to UK, Japan, Europe or USA. Therefore, it has created direct adverse impact on the domestic manufacturing process of cars in Australian market. A recent survey has illustrated the fact that Ford developed 155,000 in 1984, Holden b uilt 165,000 in 2004 and Toyota build 147,000 in 2007 when all of them were at their peak [4]. However, the number has dropped significantly, as three manufacturers sold a combined sum of just 87,000 locally developed cars in Australian market last year. Thus, the drop of demand for locally manufactured cars in Australian market has reached to its extreme level. The prime manufacturers like Holden, Toyota and Ford are getting no opportunity to utilize its full production capacity for a sustainable period of time. As a result, all these organizations are looking for effective utilization of export facilities for maximizing the impact on the sales volume. Now, lack of demand of domestic manufactured car products is one of the prime reasons for closing of all three prime manufacturers. State and Federal Governments on manufacturing has highlighted that around 75% of the domestic car manufacturing industry in Australia is likely to shutdown with the closing of these three prime car manufacturers [6]. Hence, it is virtually the closing signs of domestic car manufacturing industry in Australian market. Therefore, it is likely to create massive adverse impact on the overall economic condition of Australia. The government of Australia has tried to provide effective political and governmental support to all these organizations for dismissing their decision of closing the operational procedure in Australian market. However, continues declining demand of domestic cars in Australian market has not provided any alternative options for the car manufacturers but close all the manufacturing units. Mitsubishi is one of the bigger Australian car manufacturing company has announced of closing their manufacturing operations in Australian market. The seniormanagement of Mitsubishi has highlighted $35 million of loan repayment to different financial authorities, as the organization felt the adverse impact on lower market demand [8]. Mitsubishi has indicated the fact that the organization has only sold 10,744 locally developed cars in Australian market, which was lower than the manufacturing capacity within the country. As a result, the organizations have to bear huge amount of operational costs without getting proper return from the market. The market trend has illustrated the fact that Australian people are becoming biased towards the relatively cheaper and smaller size vehicles produced in different organizations. Thus, it indicates the fact that demand for domestically developed cars in Australian market will likely to drop even further in near future [12]. Effective assessment o f current market condition for Australian car manufacturing sector has provided an about the future direction of the country. It has been assessed that closing of the cars manufacturing sector in Australian market will create huge number of unemployment within a very short span of time. Therefore, Australian government has focused on developing different plans and procedure for creating alternative job options for these people in order to keep the economical condition of the country at the desired level. Now, considerable drop for domestic cars in Australian market is also has created huge challenges for the organizations to keep the wage or benefit level of the workers at the desired order. The drop in demand has reduced the profit level of the organizations by more than 80% in Australia [7]. Therefore, it has induced organizations to look for providing lower wages and facilities to all the workers in order to reduce the cost associated with the manufacturing procedure. In the early phase of 2016, Toyota has reduced the number of workers employed in the production facilities in order to reduce the operational cost as much as possible. Other prime organizations like Ford and Mitsubishi has also followed the footstep of Toyota and reduced the number of workforce in order to buy sometime to remain active in the Australian market. It has provided very little turnaround options for these organizations for capturing the major share of the market in an effective way. Conclusion The above illustration has highlighted the fact that appropriate understanding of the market demand is critical for developing effective strategies for sustaining in the competitive market. The above illustration has highlighted the fact that people biasness towards the foreign developed cars has limited the market for domestic cars in Australian market. As a result, prime car manufacturing organizations like For Automobile and Toyota has faced problem in selling the domestically manufactured cars in Australian market. The sales volume has dropped by more than 80% over the past decades. As a result, all the prime manufacturers in Australia have already started to close their manufacturing facilities. It is expected that by the end of 2017, all the prime car manufacturers like Ford, Toyota, Holden and Mitsubishi will close all their manufacturing units in Australian market. To conclude, it can be mentioned that domestic automobile manufacturing sector in Australia is on the verge of c losing very nearly. References "Car manufacturing in Australia update",Allianz Australia, 2017. [Online]. Available: https://www.allianz.com.au/car-insurance/news/car-manufacturing-in-australia-update. [Accessed: 03- May- 2017]. "The end of car production in Australia | Autocar",Autocar.co.uk, 2017. [Online]. 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