Lamenting over the Aussie car industry is a Beep Beep Beat Up1 minute read

In a front page article in The Age, Bridie Smith has lamented the collapse of the local car industry, where sales are down over 20%. Australian Car Sales Collapse says the headline in the print version of the The Age.

Ferrari SuperAmerica

The reality is hidden deep within the article:

Australians bought a total of 962,521 new vehicles last year, which marked a 2.6 per cent fall on 2005 figures, although 2006 remained the second strongest year on record

Yes, Aussie MADE cars aren’t selling as well as the previous year, but overall, sales figures are outstanding! The local industry is fine – as long as you don’t factor in the total absence of a locally made 4-cylinder car in a market which is buying 4-cylinder cars like crazy.

Published by Constantine Frantzeskos

I build and grow global businesses, brands, and digital products with visionary marketing & digital strategy | Non-Executive Director | Startup investor and advisor | Techno-optimist

One thought on “Lamenting over the Aussie car industry is a Beep Beep Beat Up”

  1. Paul Karagiannis says:

    Finally, the heckler has been acknowledged!

    Pay attention consumers, this one’s really important. Remember back to your childhood in the 80’s through to your accident prone pimply faced just-got-my-licence mid 90’s. What a great time. Great indeed. Most homes had only the one car and finding parking in your street was never a hassle. Peak hour traffic was exactly that- an hour. Going for late night drives on weeknights you would only see milk and bread trucks and police cars. Nowadays, everyone has a car and then some.

    Cars have come a long way from being the second largest investment a family would ever make. Cars are a product that has come a long way to finally become a consumerist staple. A turnover throwaway everyday use item draining one umpteenth of your monthly disposable income.

    But you knew that. lists one hundred (count them) new car models for sale for less than $20,000. One hundred!?! Can you believe this? We are not talking about pairs of socks or cutlery or towels. Who is buying all this crap? Why the fuck for? You are, finance junkies.

    It is possible in this day and age to walk into a car dealership with sufficient identification, two payslips and drive out three hours later with a brand new car. It takes little effort and the car can be delivered to you that afternoon.

    There are however no Aussie made cars. Consider a locally made large run production model such as the Commodore or the Falcon. It sells for about $35,000 as a base model. Neither Holden nor Ford could deliver a car by cutting materials and labour costs by half. So these cars have to come from production runs that go into the 100’s of thousands in countries where labour is cheaper.

    Don’t despair though, you are not giving away jobs to Korea and Indonesia. These McHatches and Kentucky Kia Rios are the equivalent of the $2 chinese shop that sells all sorts of crap at low low prices. You are not buying it because you need it, you are only buying it because it’s there and Shonky Finance (TM pending) tells you you can (only just) afford it.

    Let’s now pulls some numbers out of a hat. New car :$20k. Dealer delivery (what a load of shit) plus govt charges: Say $2k. Finance for horny 21 year old P Plater for 1 yr (as condition of financed car you must also have inhouse insuarnce) : $2k. Mags, tinting, stereo upgrade: $2k. Total:$26,000. Finance over 5 years with no residual: Around $38,000 total. Value of car at end of 5 year contract: $6,000.

    Let’s face it, you’re not buying this car to save money. It’s costing you at least $6000 a year before running costs. And you drive how much…17000-20000 km p.a.? That’s what the RACV rates small car use as. You use no more than about 1800 litres fuel a year and that costs you about $2200. If you filled up at the high end of the fuel cycle it would cost you 10-13cpl more- that’s about 200 bucks. Funny how you have $2500 a year to throw to a finance company in interest but bitch about a tank of fuel costing you $4.50 extra a week.

    Cars are consumerism at its finest. They have cars now that can appeal to everyone’s fancy. They are cheap to make and sell but come with hidden extras that companies make their real money on. Little 4 cylinders come with cheap, 120,000km engines that will last no more than the life of the warranty. They also come with $350.00 side mirrors (Falcon ones cost $80) and unservicable brake rotors which have to be replaced, rather than machined. They cost the same to insure as a Commodore twice the size and value because they are expensive to fix in non-total loss accidents. I wonder how close to a total loss you could come if you slashed all the interior trim and broke all windows of a $12,990 all inclusive Kia Rio…

    It’s beautiful though. People work, buy cars, create jobs for other people who work to make money go around. There’s no loss, just money going around. The story remains the same the higher up you keep going in the tax brackets. Having progressively gone from the SAABs and Volvos, then to BMW 318is, onto Pajeros and lately Mercedes ML’s, the middle class wives have progressed through to Volkswagen Diesels. The lure is the diesel which uses less and therefore costs less to run. All these small vehicle diesels have been unavailable to the Australian market because our diesel fuel had a high sulpher content, about 5000 parts per million (ppm). The government issued guidelines for sulpher content and it has been progressivelly lowered to a level of 30ppm with some companies just having switched to 10ppm.

    But once again, how can you justify spending $20-25k extra for a small hatch/sedan to save no more than $500 a year. It’s true, this diesel burns cleaner, only compared to the old diesel. Petrol and LPG burn cleaner still.

    Lets say however that money is not your problem. You buy a new car because it is new and has less emissions than you old car and you are doing this for the environment. Remember, the car you just bought had to be smelted, formed, cut, sprayed, fitted, tested and delivered. All these processes use energy and that energy released heat which added to the greenhouse effect. You well wishing purchase had the same effect anyway.

    You want to save money, water, the environment, yourself from herpes? The best and most effective way is to not engage the activity at all. Don’t drive when you don’t have to, don’t water the plants at all, don’t go to the pros down at ST Kilda. Catch the bus, buy prickly pears, masturbate.

    All safe, resource savvy activities. Not very consumerist though.

Comments are closed.