The Role of the Australian Automobile Manufacturing Industry

The Role Of The Australian Automobile Manufacturing Industry

The Australian automobile manufacturing industry is playing a vital role in regional and national economies. It is one of Australian’s most enhanced and improved industry. Ford, Toyota, and General Motors Holden are the three main subsidiaries of multinational manufacturers of this industry.

The industry also consists of several parts manufacturers such as Bosch. The three main subsidiaries have 17,000 of worker force that is working at these three manufacturers. Australia was a very different place without this industry. After the loss in this main economic source, the country suffers a lot. It not only loss main and important capability but also become $7.3 billion smaller by other industries. This all happen because the industry faces an uncertain and doubtful future.

The Role of the Australian Automobile Manufacturing Industry

Ford that is a main automotive manufacturer of Australia terminated its manufacturing in 2016 that is a big loss for the industry. With the termination of Ford vehicles, the Australian decreases its production to 225,000 that was 407,000 in 2004. This is a big disadvantage for the country with the decrease in current work. Other two major manufacturers also making a decision about the vehicle’s production in the country.

GMH and Toyota are taking time for making a decision because the investment and timing cycle is totally different from the Ford. As the decision of termination of product involved very large sums of money so they are thinking to stop doing investment. It will be the case that if they will stop manufacturing then all other suppliers will do the same.

Government Role for Industry Protection

While declining in production, the Australia government is continuously struggling and supporting the automotive industry to maintain its manufacturing of vehicles and getting economic advantages from this industry. Because everyone in Australia knows that after this shocking decision from the Ford or other major manufacturers, no other company will invest in new models of cars or other vehicles.

So, without the support of the Australian government, there is no chance to access new importers into the Australian market. Now, this is dependent on Australian government that whether or not it wants the occurrence of the automotive manufacturing industry in Australia. For this purpose, the government should perform benefit-cost analysis to measure that should it support this industry or not.

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Industry Shut Down Affect Employment

The major manufacturers in Australia have a skilled and highly experienced team of designers and engineers who always remain busy to complete global projects for their parent companies. The Australian industry is full of such designers and engineers who are working on high technology projects. The Australian manufacturing industry has such skilled workers because of the expertise of the Australian people.

At the same place, domestic supply industry has highly professional designer and engineers who design enhanced and advanced tools and work on new technologies for use in the manufacturing process. The employment of these engineers and designers might be at risk if the automotive industry of Australia terminates its projects.

Loss of Direct Support from Australian Government

If the Australian automotive industry shut down then there will be a loss of direct support.  It is because the Australian manufacturing industry receives direct support from the Australian government that is around $500 million every year. Although this is a very small amount as compared to the amount that was received before import competition. Because the import competition is no longer exist because of loss in tariffs that was 5 percent in general and now it is zero for other countries.

Most Affected Areas of Australia after Termination of Automotive Manufacturer Industry

If the automotive industry of Australia shut down then there will be a great loss for the whole country. The areas that are most affected by this shut down are Victoria and South Australia. Especially, Melbourne and Adelaide much more affected by this termination. In some other regions like Dandenong and North Adelaide, these effects will be more severe than other states. If this industry will leave Australia then the mentioned regions will be most affected in terms of employment and high automotive dependency.

Final Words!

So the main reason for all these changes and loss is that the automotive industry of Australia is foreign-owned. If the industry shut down then it will be a reason for a big loss of capital to the economy of Australia. This economical loss will not affect other industries in Australia. If the major manufacturers General Motors Holden and Toyota stops the production of vehicles in Australia then they will not further invest in any other industry. There is a big loss of capital because of the foreign-owned parts manufacturers.

The continuous support for the automotive industry in Australia will be a defensive measure for the prevention of national output loss and welfare. The automotive manufacturing industry could be playing a significant role in the Australian economy if the barrier to Australian exports become lowered.

Written-Off Vehicle Laws in Australia

Written-Of Vehicle Laws In Australia

Vehicles Damaged By Accidents

As everyone knows that written-off cars are very dangerous to drive on a road because of its damaged condition and due to severe accidents. It is very unsafe to drive written-off or accidental cars on the roads again.

But selling a written-off car is not that easy as well as it has to repair to a conventional standard that could be expensive for a person. Another bad thing about written-off cars is that the car harms its value if it has a history of being written-off. So, it is a great loss for a person who has a car involved in an accident.

The Australian government has a proper law to enhance road protection and consumer well-being. The government has presented law in 2011 that was effective from 31 January 2011. According to the law, there are two categories of
written-off cars.

Written-Off Vehicle Laws in Australia – Complete Details

A car may be declared to be a statutory write-off that is unrepairable because of severe structural damage. So, they are unsafe to be on the road again. It is also known as non-repairable.

A car may be declared to be a statutory write-off that is repairable but is uneconomical to repair. It is also known as a repairable write-off. This will be decided by an authorized insurer or agent to declare a car a statutory
write-off. The insurer will declare that whether to:

  • Repair your car
  • A car is a total loss or repair
  • Repair your car by paying you
  • On What Basis Insurer Make a Decision about a Write-Off Car

If your car is involved in an incident or fortuitously damaged and you place it in a statement then an insurer will examine the whole loss. The companies have skilled engineer, assessor or insurer to get a review of your write- off the car. A visit might require to your place or they may view pictures and read reports from a backyard
or garage.

The assessors have strict criteria to judge your car’s condition. They declare it write-off if it is not able to economically repair. Here economical repair means that cost which will be required for repairing is around 50 percent to 60 percent of the valuation of a car. Then this car will be declared as a total loss or a write-off car. If this will be the case, the insurer will offer a payout for car replacement. The car replacement will according to the existing car and the existing condition of a car.

Write-Off Categories

According to a Salvage Code that was produced by the Association of British Insurers in 2017, the modern and latest cars are very expensive to repair. The production of the latest cars is also very tough and harder. So, according to the Salvage Code, cars were categorized in a different way than how cars are judged and what should happen to them. The categories named A, B, S, and N were explained in this way.

  • Category A: The cars lies in this category believed that not suitable to be repaired. The cars included in this category must be wasted without separating any part.
  • Category B: The cars lie under this category is also not suitable for further use or repair. The parts can be recycled for further use.
  • Category S: These cars are repairable but the insurer decided not to repair it because of damage to any part of the structural frame.
  • Category N: Theses are repairable but insurer decided not to repair while damage is non-structural but there are some safety-critical items which need to replace.

Don’t Agree with Write-Off Decision?

If you do not agree with the insurer’s decision and don’t let your car lie in any category then you can scrap your car. An insurer can also deal for car scrapping. A written-off car can be scrapped through an Authorized Treatment Facility (ATF) that is also known as junkyard or scrapyards. There are different steps that need to follow while scrapping a written-off car.

Scrap it with Necessary Parts

If you don’t want to keep any part then keep its registration number. After applying for scraping, you will get “Certificate of Destruction” from AFT within seven days. You need to provide logbook to AFT but keep selling authority and transfer authority. After cars scrapping, inform DVLA about it.

Scrap Without Necessary Parts

If a car owner has a written-off car then it can be scrapped without giving the car’s necessary parts to AFT. You can keep some necessary parts for further use. You must inform DVLA that your car will be no more on the road. Keep all the authorities of car selling, car transfer or car exchange with you. Give your logbook to DVLA so that they have a record of your car scrapping.

If you are still worried about your car that is not giving its accurate value then you can contact to Financial Ombudsman Service (FOS) which is totally free.