Essays on Differences in the Industrial Policies between Australia and Japan - the Car Industry Case Study

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The paper "Differences in the Industrial Policies between Australia and Japan - the Car Industry" is an outstanding example of a business case study.   Australian manufacturing industries are best known for free trade policies. These policies have over the years led to gradual destruction and demise of the manufacturing industries. Many employees have lost their jobs as the country has plunged into a foreign debt problem. The fall of manufacturing industries has led to overdependence on the import of foreign goods to satisfy local market demand (Hanson, 1998). The policies are unilateral in providing tariff reduction, deregulation of financial systems such as banks and offering free trade.

However, Australia ought to protect the industries and the national sovereignties from deregulation and economic rationalisation just like its immediate competitor Japan. The industrial policy is best described by the ability of a government to support its industries (Kim Carr Press Release 2008). The main function of the industrial policy is to provide conditions to prosper and grow. It is also prudent for the government to intervene and come up with more effective economy management and the market mechanism.

This thesis will look into comparison and differences in the industrial policies between Australia and Japan, in the car industry (Hanson, 1998). The elements of industry policymaking include; finance, research and development, intentional environment, infrastructure, labour market industrial relations, welfare and training of employees (Kim Carr Press Release 2008). If the industry is left in the mercies of the market, then it is bound to decline since key sectors such as exports and production will dwindle. The industry policy in Australia has taken two crucial approaches that are, free traders and interventionists who have the ability to provide superior economic outcomes (Hanson 1998). In a review to the Australia automotive industry, the government sought to initiate globally integrated and sustainable Australian manufacturing sector (Dunning & Pearce 1985, p.

27). These reforms have provided an opportunity to address challenges and crisis that faces the automotive industries (Department of Industry, Tourism and Resources 2007). For instance, the financial crises such as access to investment and funds as well as consumer demand are well catered for in the policy (Kim Carr Press Release 2008).

The government has come up with a significant industrial program known as Automotive Transition Scheme (ATS) Program. This program provides up to $2.5billion to car manufacturing industries. This money is channelled for development, research, and designing most modern automotive for both local and exportation (Kim Carr Press Release 2008). The government also has bowed to pressure to the high demand for low carbon-emitting vehicles (General Motors Holden 2008). The government has moved swiftly to establish Green Car Innovation Funds (GCIF) which provides assistance in research and attracting relevant investment in coming up with more fuel-efficient and lower carbon-intensive vehicles (Department of Industry, Tourism and Resources 2007).

The GCIF contribution to the investment seeks to commercialise the technologies that reduce fuel consumption in greenhouse gas emission, in manufactured vehicles (General Motors Holden 2008). In addition, Australian car manufactures will have to accommodate the impact of the proposed emission trading scheme (Invest Australia 2005). This is contrary to its trading partners such as Japan and Thailand who do not need to pay the carbon price during manufacturing. As a result, the competitiveness among the Australian trading partners continues to grow stiff (Beer & Thomas 2007, p.

249). The government needs to come up with an equivalent carbon cost that matches up to its trading partners. A clean method of offsetting this cost will be essential in maintaining the competition of car manufacture (Department of Industry, Tourism and Resources 2007).

References

Bayari, C 2008, ‘Japanese auto manufacturers in the Australian market and the government industry assistance spending’, The Otemon Journal of Australian Studies, vol. 34, pp. 87−107.

Beer, A & Thomas, H 2007, ‘The Politics and Policy of Economic Restructuring in Australia: Understanding Government Responses to the Closure of an Automotive Plant’, Space and Polity, vol. 11 no.3, pp. 243 − 261.

Beeson, M 1997, ‘Bilateral Economic Relations in a Global Political Economy: Australia and Japan’, Competition and Change, vol.2 pp. 137 − 173.

Department of business and innovation 2011, A more competitive manufacturing industry New directions for industry policy and manufacturing, viewed 5 September 2012

Department of Industry, Tourism and Resources 2007, ‘Automotive Industry Policy’, pp. 1-23, viewed 5 September 2012

Dunning, J H & Pearce, R D 1985, The World’s Largest Industrial Enterprises, 1962−1983 St. Martin’s Press, New York.

Edgington, D W 1990, Japanese Business Down Under: Patterns of Japanese Investment in Australia, Routledge, London.

General Motors Holden 2008, Submission to the Review of Australian Automotive Industry ‘Making Australia an Attractive Place for Global Investment’.

Hanson, P 1998, Manufacturing Industry Policy, viewed 5 September 2012,

Invest Australia 2005, Australian Automotive Industry. Canberra: Commonwealth of Australia.

Kim Carr Press Release 2008, ‘Government announces review of automotive industry’, 14 February, viewed 5 September 2012

Newsweek Magazine 2008, ‘Get Your Green Motor Running’ , 5 September p. 1-4, viewed 5 September 2012,

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