Essays on Government Business Relationship - Automotive Industry within Australia Case Study

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The paper "Government Business Relationship - Automotive Industry within Australia" is an outstanding example of a business case study.   Australia is an independent democratic state. In such a democracy, the interests and the operations of both the government and business intersect. No government be it federal and or state government would opt to disregard the needs of the business. However, it depends on the magnitude of the needs and how businesses approach the government in resolving its needs. This paper conducts an in-depth analysis of the role as well as structure regarding the automotive industry within Australia.

The paper outlines some of the main issues affecting the industry today. The main focus is given to automotive manufacturing especially assembly. The relationship between the industry and the government and the level of support gained from the government is also examined. Australia is known for mass manufacture of large vehicles. The country’ s industry possesses significant heritage plus a devoted customer base. Some of the companies that have dominated in producing vehicles in Australia include British Leyland, Ford, Nissan, Rootes, Toyota, Chrysler and Volkswagen. The automotive industry had continued to enjoy a heightened degree of protection from the government.

From the 1960s, minimum levels regarding local content, considerable tariffs as well as import quotas were used by the state to ensure that the industry was shielded from the external competition (Australian Broadcasting Corporation, 2008). However, fundamental changes to the policy landscape got introduced in the 1980s through the implementation of Motor-Industry-Development-Plan. This was unofficially described as the Button Plan and was geared at decreasing the level of protection within the industry. This was realized through regulations; for example, quantitative restrictions pertaining to imports as well as export tariffs (Singh, Smith & Sohal, 2005). Alongside the renowned Button Plan, ACIS (Automotive-Competitive-Investment-Scheme) got formulated in the 1900s which was geared at providing the industry continued government support.

However, in spite of introducing both Button Plan plus ACIS, the growing pressure within the industry witnessed a substantial number of vehicle producers decline from 5 to 3 in the last 2 decades; for instance, the exit of Nissan and Mitsubishi. After the closure of Nissan Assembly Plant based in Eastern Melbourne, 1,800 workers lost their jobs in the midst of difficult financial circumstances.

In recent times, Mitsubishi was compelled to close her Australian Assembly operations based in Adelaide on March 2008. The closure of the facility resulted in 930 employees losing their jobs. In the year 2016, Ford announced to halt her manufacturing operations (Bracks, 2008). Despite the fact that Button Plan realized medium-term success as well as obtained its objective of streamlining the vehicle industry within Australia, it failed in opening up entry to the export marketplace as per expectations. This reflects the existing and heightened global competition within the automotive industry as well as the growing need for economies of scale whilst producing automobiles that are competitively priced.

Furthermore, the non-tariff barriers employed by foreign nations acts as the major limiting factor, regarding Australian exports access to international markets. The strong Australian dollars, an increase of non-trade barriers as well as heightened competition have made exports to decrease. Moreover, global overcapacity coupled with currency manipulations by some foreign governments has grossly contributed to the exports decline (Singh, Smith & Sohal, 2005).

References

Bracks, S. 2008, Review of Australia’s Automotive Industry, Final Report, July, Canberra.

AAI (Australian Automotive Intelligence) 2013, Australian Automotive Intelligence Yearbook 2013, Melbourne.

Bernhart, W., Dressler, N. and Toth, A. 2010, Mastering Engineering Service Outsourcing in the Automotive Industry, Roland Berger Strategy Consultants, Munich, Germany.

Simpson, D., Power, D., & Samson, D. (2007). Greening the automotive supply chain: a relationship perspective. International Journal of Operations & Production Management, 27(1), 28-48.

Carroll, N. 2006, ‘Explaining unemployment duration in Australia’, The Economic Record, vol. 82, no. 258, pp. 298–314.

DIISR (Department of Innovation, Industry, Science and Research) 2008, A New Car Plan for a Greener Future, Canberra

European Parliament 2009, Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 Setting Emission Performance Standards for New Passenger Cars as Part of the Community’s Integrated Approach to Reduce CO2 Emissions From Light-Duty Vehicles, Official Journal of the European Union, 6 May 2006/L 140/01, pp. 1–15.

Singh, P. J., Smith, A., & Sohal*, A. S. (2005). Strategic supply chain management issues in the automotive industry: an Australian perspective. International Journal of Production Research, 43(16), 3375-3399.

Banks, G. (2005). Structural reform Australian-style: lessons for others? (p. 3). Productivity Commission.

ABC (Australian Broadcasting Corporation) 2008, Suppliers Weigh up Mitsubishi Closure, ABC News, http://www.abc.net.au/news/2008-02-06/suppliers-weigh-up-mitsubishi-closure/1034186 (accessed 22 December 2013).

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