Ruqayyah Snyder
Australia's automotive industry has been in decline for over a decade, with global giants such as Mitsubishi, Ford, and Toyota closing their production plants across the country between 2004 and 2017. The final blow came in 2017 when GM Holden shut its doors after a century of manufacturing cars in Australia. The demise of the Australian car market has been attributed to various factors, including high manufacturing and labour costs, rising inflation, and a shift in consumer preferences towards imported vehicles. Despite this, there is a glimmer of hope for the local industry, with a spike in demand for international vehicles to be modified for the Australian market, and experts placing their bets on the potential of electric vehicles (EVs) to revive the sector.
| Characteristics | Values |
|---|---|
| First imported car | Pender-Hertel of 1897 |
| First car offered for sale | Highland (a motorised tricycle) |
| First car made in Australia | Steam car, the Phaeton, made in 1896 |
| Average age of vehicles | 10.6 years |
| States with the largest increase in registrations | Queensland, South Australia and the Australian Capital Territory |
| State with the least increase in registrations | Victoria |
| Car manufacturing companies in Australia | Holden, Mitsubishi Motors Australia, Nissan, Toyota, Mack, Volvo Group Australia, Australian Motor Industries |
| Reasons for the decline of the Australian car industry | High manufacturing and labour costs, rising inflation rates, shift in preference to imported SUVs and small cars |
| Possibility of revival | Potential for investment in electric vehicles and leveraging popularity of hybrid vehicles |
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What You'll Learn
The history of car manufacturing in Australia
The first true cars made in Australia were steam-powered. The first of these, the Phaeton, was built in 1896 by Herbert Thomson and Edward Holmes of Armadale, Melbourne. It was exhibited in 1900 using the first pneumatic tyres made in Australia. In 1903, the Australian Motoring Association was formed in New South Wales, Victoria, and South Australia to protect motorists' interests. This was followed by the Australian Automobile Association in 1924.
Ford Australia, a subsidiary of Ford Motor Company, was founded in Geelong in 1925, and the first Australian-built Ford, a Model T, was launched in June of that year. Other early car manufacturers in Australia included Tarrant, which built engines, and Australian Motor Industries (AMI), which began assembly operations in 1952 and produced a range of Standard, Triumph, and Mercedes-Benz cars, as well as Rambler models from American Motors Corporation (AMC). Toyota automobiles began assembly in Australia in 1963, and by 1968, the Japanese company had taken a controlling interest in AMI.
Over the years, other global car manufacturers established a presence in Australia, including Holden, which offered a range of locally produced and imported vehicles, Nissan, which began assembling cars in 1966, and Mitsubishi, which operated a vehicle assembly plant in South Australia until 2008. However, in recent years, the Australian car market has faced challenges due to high manufacturing and labour costs, rising inflation, and a shift in consumer preferences towards imported vehicles. As a result, companies like Ford, Holden, and Toyota have ceased production in Australia, and the country's car manufacturing industry has declined, with local retailers relying increasingly on imports.
Despite this, there is a growing demand for electric vehicles (EVs) in Australia, and experts believe that the country's rich mineral resources could be leveraged to revive its car manufacturing sector in an environmentally and socially transformative way.
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Electric vehicles in Australia
Australia has a long history of involvement in the automotive industry, with Australian constructors playing an active role in the early development of cars. However, in recent years, the Australian car market has faced challenges, with the closure of local manufacturing plants by major companies such as Mitsubishi, Ford, Toyota, and GM Holden. Despite this, there is a growing interest in electric vehicles (EVs) in Australia, driven by rising petrol costs, government incentives, and a shift towards environmentally conscious transportation options.
The Australian government has introduced initiatives to support the adoption of electric vehicles, such as the Electric Car Discount, which exempts zero and low-emission cars from import tariffs and fringe benefit taxes. Additionally, the government is investing in infrastructure by funding new public fast-charging stations for EVs, making it more convenient for Australians to consider electric vehicles as a viable option.
Several EV models sold in Australia offer impressive ranges, with some capable of travelling over 400 kilometres before needing to be recharged. Examples of popular electric vehicles in Australia include the Nissan Leaf, the first mass-produced all-electric vehicle for the global market, and the Tesla Model 3, which broadened the appeal of electric cars with its affordable price and impressive range.
While the Australian car market may have faced setbacks in recent years, the future of electric vehicles in the country looks promising. With Australia's rich mineral resources and the potential for local manufacturing of electric vehicles, there is optimism that Australia can revive its car industry in an environmentally and socially transformative way. This transition towards electric vehicles is expected to not only reduce emissions but also create new opportunities for local engineering companies and contribute to a more sustainable future for Australia.
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The decline of the Australian car industry
The Australian automotive industry has a long and rich history. Australian constructors were very active at the beginning of car development, and in some areas, they were ahead of their overseas counterparts. The first true cars made in Australia were steam cars, with the first being made in 1896 by Herbert Thomson and Edward Holmes of Armadale, Melbourne.
The industry boomed in the post-war period, with GM, Ford, Renault, Toyota, and Chrysler seeking access to Australia's growing market. However, import duties as high as 57.5% meant that the automotive market was largely localised, with nearly a dozen manufacturers building vehicles in Australia. Holden, which became GM's Australian arm in 1931, was Australia's flagship brand and gave the country its first mass-produced car. By the time the industry peaked in the 1970s, Ford, Nissan, and Toyota all had plants in the country, and car culture and motorsport flourished.
However, the industry began to decline due to various factors. One of the main reasons was the small size of the Australian market, which made it difficult to achieve economies of scale. Additionally, high manufacturing and labour costs, rising inflation rates, and the appreciation of the Australian dollar made it challenging to compete with cheaper foreign production inputs. The shift in Australian consumers' preferences towards imported SUVs and small cars from Japan, Korea, and Thailand also contributed to the decline.
The Australian government's decision to reduce import tariffs and its retreating support for the industry further exacerbated the situation. The closure of Mitsubishi's plant in 2008 was a significant blow, and by 2017, GM Holden, Ford, and Toyota had all ended their local manufacturing operations, marking the end of an era for the Australian car industry. The collapse of the industry resulted in mass job losses and severely impacted related sectors such as the Professional, Scientific and Technical Services (PSTS) industry.
Despite the decline, there is hope for the future of the Australian car industry. There has been a spike in demand for international vehicles to be locally modified, providing opportunities for local engineering companies. Additionally, the rise of electric vehicles (EVs) could present a chance for Australia to rebuild its manufacturing sector in an environmentally and socially transformative way, leveraging the country's rich mineral resources.
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International vehicles in the Australian car market
Australia's car market has traditionally been dominated by global automotive giants such as Ford, Holden, Toyota, and Mitsubishi. However, in recent years, these companies have ceased local manufacturing, citing high costs and a shift in consumer preferences towards imported SUVs and small cars from Japan, Korea, and Thailand. Despite this, Australia remains an attractive market for international vehicles, with a growing demand for locally modified right-hand drive cars to suit Australian conditions.
The Australian car market offers a diverse range of international brands and models. In 2022, there were 60 vehicle brands and 380 vehicle models sold in the country, with over 3,600 dealer locations. The market is dominated by SUVs, which accounted for 53.1% of sales, followed by light commercial vehicles (23.7%), passenger cars (18.8%), and heavy commercial vehicles (4.4%). Toyota held the largest market share (21.4%), followed by Mazda (8.9%), Kia (7.2%), Mitsubishi (7.1%), and Hyundai (6.8%).
The Australian market has also witnessed a rise in the popularity of electric vehicles (EVs). While the supply of EVs is increasing, with 89 models available in 2025, the demand remains weak compared to other advanced markets. However, experts believe that Australia's rich mineral resources can be leveraged to revive its car manufacturing industry by focusing on environmentally and socially transformative practices, including the production of electric vehicles.
International vehicles in Australia include a range of European, American, and Asian brands. European brands such as Audi, Porsche, Jaguar, and Mercedes-Benz have a presence in the performance car market. American cars, including the Ford Mustang and US-made pickups like the Ford F-150, GM Silverado, and Dodge Ram, are imported and locally converted to right-hand drive. Asian brands, particularly from Japan, Korea, and Thailand, have gained popularity in Australia, with their small cars and SUVs preferred by Australian consumers.
While Australia currently imports all its vehicles, the country has a history of active involvement in the early stages of car development. Australian constructors were once ahead of their overseas counterparts, and the country was home to pioneering automotive companies such as Holden and Ford Australia, which have since shifted their focus to importing and designing vehicles, respectively.
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The future of car manufacturing in Australia
Australia has a long history of car manufacturing, with Australian constructors being very active at the beginning of car development. The first true cars made in Australia were steam cars, with the first being made in 1896. However, the Australian car market has been in decline over the past few years, with global car manufacturing giants like Mitsubishi, Ford, and Toyota closing their production plants in the country. High manufacturing and labour costs, rising inflation rates, and a shift in consumer preferences towards imported SUVs and small cars have been blamed for the decline.
Despite this, there is still a future for the Australian car manufacturing industry, particularly in the electric vehicle (EV) market. Australia has rich mineral resources that can be used to manufacture electric vehicles locally, and there has been a spike in demand for international vehicles to be locally modified to suit the Australian market. This presents an opportunity for local engineering companies to revive the Australian car manufacturing sector in an environmentally and socially transformative way.
The federal government's "Future Made in Australia" policy aims to increase the nation's manufacturing capabilities, particularly in clean energy technologies. With the right investments and strategies, Australia can emulate countries like South Korea, which developed its manufacturing industry from scratch.
While new-vehicle manufacturing may not return to Australia in the same way it existed before, there is potential for localisation projects and secondary manufacturing. This involves taking globally-produced vehicles and adapting them for the Australian market, including EV conversions to meet the growing demand for electric vehicles.
Overall, the future of car manufacturing in Australia looks different from the past, but with the right strategies and a focus on electric vehicles, there is potential for growth and revival of the industry.
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Frequently asked questions
Yes, Australians own cars. In 2021, 87.6% of households owned at least one car, with 53% of households having access to two or more motor vehicles.
There is no legal limit to the number of cars an Australian can own. However, there are restrictions on the number of cars that can be sold in a 12-month period without a Motor Vehicle Trade licence. This number varies between four and six cars, depending on the state.
As of January 2023, Toyota was the most popular car brand in Australia, with 20% of all registered passenger vehicles. Aussies generally own their motor vehicles for an average of 11 years and 3 months. There has been a recent surge in pure electric cars, but hybrid electric vehicles still account for the majority of electric cars in Australia (83%).
