Industry experts and trade unions are worried the decision could push parts of Australia into recession. 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 2,000 of its workers will lose their jobs. But trade unions say the companys 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.
Australias 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 dollars 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 have had declining demand internationally as a consequence of the global financial crisis, and the rise of low-cost manufacturing in India, China and Thailand.
The collapse of automobile industry has also raised concerns in the Australian parliament. The opposition has accused Prime Minster Tony Abbott of not doing enough to persuade Toyota not to close down its factories.
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