Pull Out of Japanese Car Maker Toyota Latest Hit To Australia's Economy

    20 March, 2014


    From VOA Learning English, this is the Economics Report.

    Automobile manufacturing in Australia is in trouble. Japanese automaker Toyota recently decided to stop manufacturing cars in the country. Industry experts and trade unions are worried the decision could push parts of Australia into recession.

    Pull Out of Japanese Car Maker Toyota Latest Hit To Australia's Economy
    FILE - Vehicles speed past a Toyota dealership in Sydney.

    Last May, Ford Motor company said it would stop manufacturing in Australia. General Motors announced late last year that it also plans to suspend factory operations in the country.

    Toyota says more than two thousand of its workers will lose their jobs, but trade unions say the company's decision to end production could leave 50,000 Australians jobless. They say the decision could take $19 billion away from the Australian economy, the states of Victoria and South Australia would be hurt the most.

    Australia's car manufacturing industry was once very strong. In recent years, Australia produced about 200,000 vehicles a year for sales at home and for export. The industry spent more than $540 million on research and development.

    John Spoehr is executive director of the Australian Workplace, Innovation and Social Research Center at the University of Adelaide. He says carmakers have found it difficult to operate in Australia.

    "We now have one of the most competitive auto markets in the world with at least sixty different models here. In addition, we had declining demand internationally as a consequence of the global financial crisis, and the rise of low-cost manufacturing in India, China and Thailand," said Spoehr.

    The collapse of Australia's car industry has also raised concerns in the Australian parliament. The opposition has accused Prime Minister Tony Abbott of not doing enough to persuade Toyota not to close down its factories.

    Mr Abbott has argued that he cannot be blamed for the industry's long-term decline, because he has been in office for only a few months.

    Traditionally, Australia's car industry has received billions of dollars in government assistance. The government has asked its productivity commission to investigate public support for the automotive industry. The commission carries out research, and makes suggestions on economic, social and environmental issues.

    The group has noted that big changes are taken place in Australia's car industry. It says the changes are affecting both industry employees and manufacturers of car parts. The commission is planning to give its final report to the government by the end of March.

    And that's the Economics Report from VOA Learning English. For more VOA Learning English programs, visit our website, 51voa.com. I'm Mario Ritter.