The cost of Australian car makers is significantly higher than other countries and the insufficient production scale of them has made the domestic vehicle industry very hard to survive in the fierce global competition, a recent research report from the Productivity Commission said.
According to the commission's initial car manufacturing review, Australia is a high-cost producer of motor vehicles, including high labor cost which is even not substantially different from those in developed countries such as Germany and Japan, but are four times or more than those of China, Thailand and other developing countries.
Moreover, the country's global share of car manufacturing is just 0.25 percent which means many car manufactures' output is well below the scale needed to be internationally cost competitive.
In 2012 only 1.1 million cars were sold in Australia, compared to a global figure of 82 million, said the report.
Both reasons have made the local car makers very hard to survive in the future, vindicating decisions by Holden and Ford to quit local production in the coming three or four years.
Australia's car maker Holden with a history of 157 years announced last week it would cease operations in 2017, which would result in a job loss of 3,000 employees and has aroused great public worries about the future of the country's car industry.