Subsidies not enough to Save Local Car Industry
The Australian car industry is experiencing financial troubles despite government subsidies.
A report by the Sydney Morning Herald said that the car industry has benefited from around $10 billion in government subsidies over seven years. But jobs are still being lost, and one car company will cease operations in three years.
There are conflicting opinions on the value of government subsidies. One car analyst believes they have sustained the automotive industry, but another view is that the continued job losses are proof of an ineffective strategy.
Job losses at Holden have totalled 670 so far, while the president of Ford Australia, Bob Graziano, conceded that his company couldn't compete with European and Asian cost structures, despite offering returns of $6 for every $1 government aid.
The report claimed that the global financial crisis has played a role in stifling industry, with consumers choosing more cost-efficient cars.