Yet another automaker has announced it will stop production in Australia. Toyota has stated that it will cease operations Down Under by 2017, following Mitsubishi, Ford and Holden in similar plans.
In a report from NPR’s Marketplace, BBC correspondent Phil Mercer outlined the reasons offered up by Toyota for the shuttering. The Japanese auto giant is citing high manufacturing costs and the high value of the Australian dollar, and, to quote Toyota, “Arguably one of the most competitive and fragmented auto markets in the world.”
While the latter reason may hold water, the notion of a highly valued Australian dollar is rather peculiar. The Australian dollar may have been higher than the US dollar in recent years, but this year it has been on a decline. Mercer says that currency is hard to predict just days ahead, so this argument of the high dollar value makes Toyota look like it’s hedging its bets.
The move has sparked outrage Down Under, especially in the context of GM announcing the shuttering of Holden (above). Australia’s Prime Minister, Tony Abbot, is very upset, and unions say it could spark another recession. So is Australia just a victim of their own past successes, or do these automakers know something about the market that we don’t? Listen to the Marketplace report below and decide for yourself.
- Sectors & Industries
- Phil Mercer
- Australian dollar