Auto industry set to survive end of manufacturing

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An engineer inspects a car being built

The number of jobs in Australia’s automotive industry will drop to around 364,000 after car manufacturing closes down later this year, according to a new report into the industry.

The report ‘Directions in Australia’s Automotive Industry: An Industry Report 2017’ was produced by the Victorian Automobile Chamber of Commerce (VACC), in partnership with the Motor Trades Association of Australia and other states’ MTA bodies.

The executive director of the Victorian Automobile Chamber of Commerce Geoff Gwilym said: “A key finding in the report is that Australia’s automotive industry is here to stay.

“Passenger vehicle manufacturing will cease in October this year, but that is, and always has been, a small component of the entire automotive industry, which is still very robust with 69,365 businesses operating across the country.”

By 2019, the report predicts that the automotive industry will have lost about 14,000 jobs and about $2 billion in turnover, mainly due to the shutdown of car manufacturing.

The report found that the Australian automotive industry currently contributes more than $37 billion to the economy and employs 379,365 people.

The key findings include:

  • The automotive industry contributes $37.1 billion to the Australian economy (2.2 per cent of GDP). This will fall to $35.1 billion after car manufacturing ends.
  • Automotive repair and maintenance businesses account for 54 per cent of the automotive industry. The next-largest sector is motor vehicle retailing at 8.3 per cent.
  • Automotive vehicle and parts manufacturing accounts for 4.4 per cent of the industry.
  • 96.5 per cent of automotive businesses are small and family-run enterprises.
  • 41.9 per cent of auto businesses are run by sole proprietors; 54.6 per cent have between one and 19 employees.
  • The average age of an Australian vehicle is 10.1 years.
  • 800,000 registered vehicles (excluding motorcycles) were scrapped in 2015-16.
  • Profit margins for repair/maintenance businesses in 2015-16 was 12.2 per cent; fuel retailing was 2.4 per cent.
  • There are 69 vehicle marques operating in Australia, among the most in any of the world’s markets.
  • Electric vehicles make up 0.01 per cent of the nation’s vehicle fleet.
Written by RACV
August 22, 2017