While Ford’s decision to cease vehicle production in Australia from October 2016 is undoubtedly a set-back for the Australian automotive industry, leading accounting and advisory firm Grant Thornton argues it should not be seen as ushering in the end of the automotive industry in this country.
“Australia still retains the core of a viable, albeit niche, industry and still retains its ability to design and produce world class vehicles from scratch, within its shores,” said Grant Thornton’s National Manufacturing Leader, Mark Phillips.
Phillips argues that the industry has dealt with adversity in the past and has demonstrated its resilience.
“Progressive tariff reductions over more than 3 decades, and now the elevated exchange rate, have required the industry to continually reshape itself onto a more sustainable footing. It would be wrong for policy makers to read this latest change in the industry as spelling the end of automotive manufacturing in Australia,” he said.
Mr Phillips also points out that suppliers to the industry have been acutely aware of the declining volumes coming out of the Ford Australia plant, and have been frustrated given the high quality of the Australian product. Notwithstanding this, they have already been taking steps to reorient their businesses into more diversified niche manufacturing areas. This process has also been supported by well targeted government programs such as the Automotive New Markets Program (ANMP) and the Automotive Transformation Scheme (ATS).”
“Ford Australia has also been a good corporate citizen by introducing Australian component suppliers to global component supply opportunities, particularly in Thailand. Local suppliers need to grasp these opportunities wherever possible,” he said.
The clarification of the timing for the exit of Ford’s manufacturing operations from Australia also provides certainty to the supply chain so that they can plan the future directions of their businesses.
“They key to the future of the industry will be good planning, diversification, higher-value-added products, workforce skills and seeking opportunities for global supply contracts,” Mr Phillips said.
“Policy makers, the public and other stakeholders must appreciate that the leading-edge technology that is part-and-parcel of the automotive industry can be utilised to develop and enhance other manufacturing industries. We need to think and have a vision beyond the short-term.”
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Grant Thornton Australia provides audit, tax and advisory services to dynamic, growing organisations and is a single national firm, with over 150 Partners, more than 1,200 people across Australia and national turnover of AUD $232 million. Grant Thornton International is the fastest growing international accounting network in the world, with a global turnover of US$3.7billion and more than 30,000 people, and was recently named 2013 Network of the Year by the International Accounting Bulletin.