Australia Auto Exports at 13-Year Low as GM, Toyota Cut Jobs

The value of Australia’s automobile exports plunged to the lowest level since 1998 last year as the strength of the local currency reduced overseas demand, leading to job cuts at the local units of General Motors Co. and Toyota Motor Corp.

Passenger vehicle shipments fell 26 percent from a year earlier to A$1.35 billion ($1.45 billion), the Australian Bureau of Statistics said today in its December trade report. Car exports have slumped 63.7 percent since their peak of A$3.6 billion in 2008, when they were the largest export by the country’s manufacturing industry.

The decline highlights the so-called two-speed nature of Australia’s economy as industries outside the booming mining sector suffer from a more than 60 percent rise of the local currency against the U.S. dollar in the past three years. Toyota said last month it’s cutting more than a 10th of its assembly plant workforce in Australia, while GM Holden said today its reducing the number of contractors it employs.

“Our capacity to sustain large levels of export sales has largely evaporated,” said Ian Chalmers, chief executive officer of the Federal Chamber of Automotive Industries, a car industry lobbying group. “We’re competing in an internationally difficult space while dealing with a very high Australian dollar at the same time.”

Toyota Cuts

Australian manufacturing, accounting for about 10 percent of gross domestic product, has contracted even as booming demand for the nation’s commodities helped the economy avoid a recession after the 2008-09 global financial crisis.

Toyota Australia, the country’s largest car exporter, cited the strong dollar when it said Jan. 23 that 350 people face compulsory redundancy at its main plant in Altona, a suburb of the country’s second-largest city Melbourne.

The division’s production has fallen 36 percent since 2007, it said in an e-mailed statement last month. The unit shipped 83,000 cars worth A$1.5 billion in 2010, the majority to the Middle East, the largest importer of Australian-made cars, according to Toyota’s website.

Holden, Australia’s largest producer of cars for the domestic market, blamed the high Australian dollar for the job cuts at its assembly plant in the South Australian city of Adelaide.

Growth Under Threat

“At the current exchange rate we won’t be able to realize further growth in our export programs,” GM Holden Chairman Mike Devereux said in a statement. About 100 jobs will go and the company “will not be able to do business” in Australia without government support, Devereux said in an interview today with Australian Broadcasting Corp. radio.

Prime Minister Julia Gillard said today the government is determined to “keep car manufacturing here” and acknowledged the problems posed by the high Australian dollar. The so-called Aussie is likely to stay “relatively high for years to come,” Gillard said yesterday and urged businesses to adapt to it.

Driven by demand for the country’s mining and petroleum exports and top-rated government debt, the Australian dollar has been the best-performing group of 10 currency against the U.S. dollar during the past two years, rising 22.1 percent over the period, according to data compiled by Bloomberg.

While that strength helps contain inflation by making imports cheaper, it hurts exporters by making their products more expensive relative to overseas competitors. BlueScope Steel Ltd., the country’s largest steel producer, in August shuttered its export division, and Australian wine exports fell to a 10- year low in 2011.

The Australian Industry Group’s performance of manufacturing index has shown a contraction in 13 months over the past two years. A comparable survey in the U.K. has seen contractions in five months during the period, while U.S. manufacturing has grown in every month since July 2009.

The Holden EFIJY 2005

EFIJY is all about fun, emotion and imagination. It shows what a bunch of clever and talented design people can do when they are let loose to create something really wild.

A wild 21st Century hot rod reincarnating Australia's most famous car, the FJ Holden, was unveiled at the Australian International Motor Show in Sydney.

EFIJY is a radical pillarless custom coupe boasting V8 Supercar power under the bonnet, Chevrolet Corvette underbody and state-of-the-art automotive technology throughout.

The "Soprano Purple" paintwork highlights its curvaceous 5.2-metre body, reinterpreting the classic design cues of the iconic 1953 FJ Holden. It delivers retro, mumbo and gizmos in one glorious package.

Obviously not intended for production, EFIJY has been a passionate side project for some Holden Design team members otherwise dedicated to creating the all-new 2006 Commodore.

A long-term dream for Chief Designer Richard Ferlazzo, EFIJY brought together almost 20 suppliers to highlight the latest in mechanical, electronic and material products and ideas.

Automotive excess pounds through a 480-kilowatt, supercharged six-litre V8 engine and airadjustable shock absorbers through to a touch control LCD screen and fan-cooled LED headlamps.

GM Holden Chairman and Managing Director, Denny Mooney, today said the EFIJY project was a bold statement on the creative talent available within Holden's design ranks.

Mr Mooney said the project was developed as a collaboration with suppliers which reduced impact on the company's heavy work schedule and ensured the highest possible quality result for the showcar.

"EFIJY is all about fun, emotion and imagination. It shows what a bunch of clever and talented design people can do when they are let loose to create something really wild," Mr Mooney said.

"This year was a fantastic opportunity for us to create something which highlights our designers' ability and versatility."

"EFIJY is sure to evoke different memories for everyone who sees it. People might focus on the FJ links, the glorious custom coupes of the 1930s or the great design flair of the 1950s.

Design philosophies

Holden Chief Designer and EFIJY project leader Richard Ferlazzo, who sketched the first EFIJY designs in 1989 and is a long-time custom car fanatic, said the car existed purely for automotive entertainment.

"Invariably, people smile when they see it for the first time. EFIJY is our accolade to the talented designers who cut loose with some fantastically flamboyant styling in the post-war 1940s and 1950s," Ferlazzo said.

"Ask the question, what would these people have created using all the skill sets and technology we have now, and EFIJY might be the all-Australian answer to that question."

"EFIJY is also aimed at the legions of custom car and hot rod enthusiasts out there whose appetites aren't generally met in the concept car arena."

"Most importantly, it sends the message that the same people who have sensible day jobs designing entirely practical cars have the passion and inspiration to create something as outrageous as EFIJY."

"We're all car nuts together and the fact that EFIJY stands on our Sydney motorshow stand goes some way to legitimising this form of automotive design in the mainstream."