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The death of the Australian car industry: What it means for your business

Cara Waters /

Automotive product manufacturers warn Toyota’s decision to cease manufacturing in Australia is likely to lead to an industrial domino effect hitting hundreds of small businesses.   

After manufacturing cars in Australia for 60 years Toyota announced yesterday it would cease manufacturing in Australia by 2017.

Toyota employs 3600 workers in Victoria but the Federation of Automotive Product Manufacturers estimates up to 33,000 jobs in the automotive supply chain will be affected by the move.

“The decision by Toyota Australia to cease manufacturing in Australia in 2017 is a very dark day for Australia,” FAPM chief executive Richard Reilly told SmartCompany.

“This is a total restructure of our industry, and manufacturing as we know it is going to change forever. Our industry is devastated.”

He says Toyota’s decision, following on from Ford and Holden’s departures, will effectively see the death of an entire industry.

Reilly says thousands of jobs will be lost in engineering, design, prototyping, research and development and assembly.

“Some people will get other jobs, but ultimately everybody will not be in that position. Our companies are experts in making automotive components. While some of the skills are transferable to other industries, there’s a question of whether there are jobs available,” he says.

Reilly also warns there will be a flow-on effect to other small businesses including raw material suppliers, engineers, accountants and other professional service providers. 

“For every job in the automotive sector there’s a direct correlation with other jobs in other industries, how that transposes going forward remains to be seen,” Reilly says. 

The Australian Industry Group also warned of the wider impact of Toyota’s decision to leave Australia.

Ai Group chief executive Innes Willox said Toyota’s departure has “wide implications” for the many businesses and jobs up and down the domestic automotive supply chain.

“In relation to the impact on the broader manufacturing sector, the automotive assembly companies have long held key roles in the development and diffusion of technological, process and design-led innovation in Australia and have been pivotal in the training of skilled workers and managers who have taken this expertise and applied it across the economy but particularly in the industrial sector,” Willox said in a statement.

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Cara Waters

Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times' website and worked for The Sunday Times in London.

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