Ford were on borrowed time.  As a kid we had an XB GT for a while; I tried driving it years later and it was soooo heavy, impossible in heavy city traffic and dreadful fuel economy.  Nice car though, still turned heads years later; really impractical in a post oil-shock world though and not the direction (in terms of R&D) that Ford should have been pursing.

Tariffs and global over-production are destroying what's left, not just here but elsewhere with small segments or outdated platforms.  That dreadful one-sided free trade agreement with Thailand was the death knell - they were never going to produce the Focus here if they could do it there for Thai wages.

Manufacturing will keep going in this country - just not car manufacturing.

And now the $AU is falling (or more that the Greenback is on the ascendency).

10 years  When was the Aussie automotive industry truly viable? They have had generous pay and conditions for decades and one by one manufacturers have called it a day during the past three decades (P76 anyone... needing to move a 44 gal drum that is). Ford joins the list.

Anyone noticing the demise of our fruit growing sector - trees being ripped up with a 15 year lead time to replant and become productive again.

The USD has to go up for some time (years) before manufacures will again get confidence. $AUD is dropping because of commodity prices. Hopefully foreign money markets will start to pull out of Aussie to jump ship so to speak while its good and push Aussie down more. We need a lower dollar big time!

The free trade agreement with Thailand is only a minor issue. its not like the focus is just imported to Australia. there are much larger markets to buy that car. Australian car manufacturing will only suceed if you can export. The Falcon was not exported, the Territory was briefly exported to Sth Africa. Ford also has the Edge which is bloody close to the Territory so the market was limited.

The middle east has alot of Commodore's, they love them. Cheap, large powerful cars. Some brains trust posted here and I have seen similar posts in paper about Falcon/Commodore not being up to standard of European cars. I challenged that poster to nominate a larger 4L car from Europe selling for a similar price, there was no respond for one reason. There isn't one!

But the problem for Australia, few other countries want such large cars. They neither have the money to run them, streets are too cluttered to drive and park them and/or fuel prices are way to high. Unfortunately Australian car manufacturing built itself into a corner, it relied heavily on local sales with very limted export potential apart from Nth America and Middle east. European's won't buy large cars, they cannot park them, and if they have the space, a BMW will be there because the money needed to have that space. German's are very patriotic in buying there cars, one of few places I found it hard to find a Toyota. The Falcon/Commodore were a "nice" market that has changed, high $A, high fuel prices and more affluence meant more people buying something else. Even the govt stopped buying local cars.

The Toyota Aurion boomed for a while at the Falcon's expense, but now thats not even selling and maybe Toyota may chop this model, but its a version of the Camry so not such a big deal. At least the Camry is now more popular size and far more exportable to a larger market, although there are quite a number of Camry assembly lines, so we are competing against those production lines as well.

The US govt has forced GM to stop overseas design as part of bailout package, hence the demise of the Commodore. I think we have done well to keep the small car Holden Cruze assembly line they have as this died in Australia in 90's when the small car market was flooded with numeous models and low prices. GM will replace the Commodore with a global platform 4 cyl car, we have done well to get this as well and Toyota's ongoing commitment.

Ford is dying across the market in Australia and the loss of the Falcon is just the tip of their iceberg issues.

We cannot blame high housing prices for high salaries, people will always borrow as much as they can to buy that bigger and better house. High housing prices come from high salaries and people funding houses on two salaries not one. If teh govt tomorrow said only one salary can be used to finance a house, the market would crash and along the way crash thousands with it before it recovered. We can also only blame ourselves for the loss of the car maufacturing. If you don't have one of the Australian made models in the garage, you are as much part of the problem as the workers about to loose their jobs (For the record I've had an Aussie made car in my garage for last 20 years, living out of Australia now, I still do. My first car was a local made Leyland Marina).  We talk up buying Australian, but really at the end of the day, I don't think most of us give a rats, we buy what we want. Of course the lack of choice in the Australian car market I think doesn't help. Its pretty much med-big car only + that Holden Cruze.

What I still want to know from the car industry is
1) Why did my 2011 Australian made Toyota Aurion Grande only cost me $A35k in Dubai new, and in Australia its over $A45k? aussie Camry in Dubai has similar differences in price compared to Australia.
2) Why are local made Camry and imported Corrolla so expensive in Australia compared to USA?

RTT_Rules:

The only thing I would disagree with is the relationship between high house prices and wages.  Two income households have certainly upped house prices nationally but I also feel its our culture in the last ten years of cheap 'n easy credit, super-low deposit loans and negative gearing have also added petrol to the fire.  You only have to look at the huge numbers these often small-time landlords write off every year to realise its become a scam ($13 billion a year).  I think now that self-managed super funds are being encouraged to invest in residential property that we are at the very end of the cycle anyway but either way you look at it you need a much higher wage to service a median-priced house than (say) ten years ago.  Less-skilled workers are always at the pointy end of the stick in a property boom because they lack bargaining power that professionals and trades people do but nevertheless their wages have to go up or those people won't be able to afford to live and work in our cities.

Also, I feel there's slightly more hope for Holden than there was for Ford; the dollar slowly deflating recently should help our manufacturers and farmers compete more effectively with our exports.  The downside with the deflating dollar is that we'll probably have to start propping up the currency with higher interest rates at some stage.  It's also a risk that inflation will take off.

RTT_Rules:

The only thing I would disagree with is the relationship between high house prices and wages.  Two income households have certainly upped house prices nationally but I also feel its our culture in the last ten years of cheap 'n easy credit, super-low deposit loans and negative gearing have also added petrol to the fire.  You only have to look at the huge numbers these often small-time landlords write off every year to realise its become a scam ($13 billion a year).  I think now that self-managed super funds are being encouraged to invest in residential property that we are at the very end of the cycle anyway but either way you look at it you need a much higher wage to service a median-priced house than (say) ten years ago.  Less-skilled workers are always at the pointy end of the stick in a property boom because they lack bargaining power that professionals and trades people do but nevertheless their wages have to go up or those people won't be able to afford to live and work in our cities.

Also, I feel there's slightly more hope for Holden than there was for Ford; the dollar slowly deflating recently should help our manufacturers and farmers compete more effectively with our exports.  The downside with the deflating dollar is that we'll probably have to start propping up the currency with higher interest rates at some stage.  It's also a risk that inflation will take off.

Hi Don,
Good points are I think you are probably spot on with housing. I remember being knocked back for a housing loan (price was $56,000) in 1994 and I earnt $60k on two casual jobs which I had held for a few years (I basically didn't have the $5000 to pay the fees, but had 20% deposit). The criteria was very strict. Roll the dice forward 10 years and I walk into a bank and they offer me $1m in finace without trying. I have been a believer for sometime, if you don't have 20% for deposit and anotehr 5% to cover the charges, keep renting.

Negative gearing became all the rage when positive gearing became impractical due to cost of housing verus rental income. Having been in the market myself, I think many/most investment property owners are actually kidding themselves on their real return over the life of the investment and would be better off with fixed interest in the bank. It seems quite difficult to get more than 10% after costs and getting >10% in investments that can be sold quickly and painlessly isn't that hard.

A few years back on Courier Mail they published a story about someone selling a house on beach at Sunny Coast and got say 1000% return over 30 years. Usual story bought for $5000 sold for $500,000 a few decades later. Someone wrote in and did the sums and said with inflation, finace, insurance and rates factored they would have been better off with a term deposit for last 30 years.

I don't think the govt will want to prop up the dollar until it gets closer to 90c and its reserve bank that does this. Interest rates will only rise if the economy starts to boom. Honestly I think mining, manufacturering, farming and govts would be very happy for dollar to stay stable in low 90's for at least 6mths, ideally longer. Mining is not getting the returns due to drop in prices, so a lower dollar will help them. Down side imports are more including petrol, both not a bad thing at this time. Up side I get a payrise for each drop in dollar.

Regards
Shane

A few years back on Courier Mail they published a story about someone selling a house on beach at Sunny Coast and got say 1000% return over 30 years. Usual story bought for $5000 sold for $500,000 a few decades later. Someone wrote in and did the sums and said with inflation, finace, insurance and rates factored they would have been better off with a term deposit for last 30 years.

That is some of the worst maths I have seen! Even for around here that is bad.

That is some of the worst maths I have seen! Even for around here that is bad.

It was an example, I don't remember exact details. But the newspaper had the headline "XXXX% return" which was done on simple buy and sell price ignoring x many years of inflation and other costs.

It was an example, I don't remember exact details. But the newspaper had the headline "XXXX% return" which was done on simple buy and sell price ignoring x many years of inflation and other costs.

Minor error, we all understood what you were driving at.

The crux of the problem is that residential property has become a 'get rich quick' scam, that's one of the main issues behind rampant price rises, especially in Sydney and Melbourne.  Small-time landlords have been convinced by property-hawking real estate agents (and the mortgage-brokers) that capital gains will ALWAYS make a short-term loss worth the pain.  The problem is that most people under 40 don't remember a recession or a contraction in house prices, they only remember the huge boom we've had in most capitals 2003-2009 when in many cases the median price doubled.  There's a price correction coming though I'm sure; some segments of the property market are already looking flat at the moment. We are overbuilt with apartments here in Melbourne and some of them, especially the small, shoddy and poorly-located ones, will almost certainly end up losing money in the future I'm sure.

Who the frig is paying half a million for a one-bedder anyway?  In a country as big as Australia, that's just absurd.

On your point about the dollar, Johnny Howard let it drop below 50 cents and didn't seem to care.  It might have to get that low again before the government acts but think of how much better things would be for our agricultural and manufacturing exporters !

Minor error, we all understood what you were driving at.

The crux of the problem is that residential property has become a 'get rich quick' scam, that's one of the main issues behind rampant price rises, especially in Sydney and Melbourne.  Small-time landlords have been convinced by property-hawking real estate agents (and the mortgage-brokers) that capital gains will ALWAYS make a short-term loss worth the pain.  The problem is that most people under 40 don't remember a recession or a contraction in house prices, they only remember the huge boom we've had in most capitals 2003-2009 when in many cases the median price doubled.  There's a price correction coming though I'm sure; some segments of the property market are already looking flat at the moment. We are overbuilt with apartments here in Melbourne and some of them, especially the small, shoddy and poorly-located ones, will almost certainly end up losing money in the future I'm sure.

Who the frig is paying half a million for a one-bedder anyway?  In a country as big as Australia, that's just absurd.

On your point about the dollar, Johnny Howard let it drop below 50 cents and didn't seem to care.  It might have to get that low again before the government acts but think of how much better things would be for our agricultural and manufacturing exporters !s

My wife and I jumped onto the rental market in late 2002 just towards the end of when you could get a positive return on regional less popular areas. We bought a book a guy wrote on buying 130 properties in 3 years all around the Ballarat area because he paid like $50k and rented it for $6-10kpa stating investing in anything less than something with a positive gearing was a short pat to limiting your investment options. A agreed with his concepts, but times had changed and we couldn'f find same although a drive through Emerald yielded a potential 8-10% on units, 6-8% on duplexs, more going through the town of Moura. But back then it was a case of why invest there? If the mine closes you're done! Emerald however is a multi resource economy. In hind site we would have done ok to very well, but it was a big gamble and I think the share market had better options with less risk.

I've had property in a regional town (L'ton) and lost 33% of its value in 5 years of ownership. You would have thought $56k was cheap enough to be low risk in mid 90's. But when a market gets flooded with newer stock and you're owning an old house people don't want because of high MTCE (Weather board), thems the breaks. One offer in 18mths and I happily sold. I'm sure that lady has done very well from it as on Sat pic its still there. I live in Dubai and when I moved here in Marh 2011 until now prices have doubled to regain their losses from GFC. If you want to see a what a real crash looks like Dubai 2009-10 was the place to be. People tell me they noticed each week roads with less traffic, cars (expensive ones) abandoned with the villa/apartment as they left town quickly and unable to even give their BMW 7 series away. In 2011, the streets were still littered with dusty cars.

I tend to agree with you, I think Australia is about to get a reminder of what a period of flat growth is all about and why you just don't borrow borrow borrow under the guise of "blinding developing the economy". Many of the state budgets have had their revenues shrink from under them and now need to cut back to match as has happened to the Fed budget.

Dollar is now down to 94c and I think 90c by end of June is a reality, how much lower, ??? Howard let it crash to 50c because he knew with a stable govt and economy it would attract exporters and it did. I believe someone starting making TV's again in Australia during that time and certainly manufacturing was doing ok and Commodore's were in every 5th house hold. Problem I believe we have had in 2013 is the 9mths duration to an election. Everyone is just waiting, no major investments etc until the current govt is officially dumped and the new govt has established itself on what it plans to do. For this I think Gillard will go down in history of basically killing the economy through inaction of not calling an election in late 2012.

Working OS you do see how much Australia still makes but also how much we were killing ourselves with short-term greed with more Enginering options simply not sending work to Australia because without checking they know we are too high priced. Other resource based govt manage to send the resource boom money into longterm strategies and not fuel the economy fire. Hopefully in future resource boom revenues get funnelled into a "Sovereign Wealth Fund" with strict controls on spending and not short term political gains.

Caught a  taxi in Dubai tonight. Camry 798,000km, driver said last week of cab being in taxi service, however he has a friend who's cab has been stuck on 999,999km for a month. Tonight is also its last night working as a taxi in Dubai and again a Camry. Both Aussie made.

Driver commented that Nissan and Hyuandi class 2L cars they also use in Dubai just don't go the distance and their MTCE costs usually see them parked up long before 500,000km.

If you need a reason to buy Aussie made Toyota's, this is it!

EDIT: They run on petrol (95 Octane) in Dubai

EDIT: They run on petrol (95 Octane) in Dubai

Should we be surprised at that?

RTT_Rules:

Thanks for that interesting and detailed reply.  I know Ballarat very well as I have family and friends around that area; it's true that it was very cheap about 15 or even 10 years ago but not so much any more.  It would have been possible in the late 90's to have been a slum king in Ballarat with big rental returns but not any longer.  Now days you'd be hard-pressed to find many houses under $200,000 (none that you could rent for a decent return anyway) and part of the reason for that is economic refugees have moved up from Melbourne and forced prices up.  A friend who lives there has also told me that while property prices have gone up, rents are very stable so you are looking at maybe 4% or less now whereas years ago it was quite possible to get 8% or more.  Your other observation that country people prefer new houses is a very salient point; there seems to be a mind-set in regional areas that old houses are nothing but trouble so buyers tend to steer clear; I think it's also because house-and-land packages in the regions are so cheap in comparison to the big cities.  I would prefer a clapped out Victorian-era house to a shoddy brick veneer any day, at least an old house has charm!

People have such a pokies mentality when it comes to property and they like to make you feel like you are stupid because you haven't done what they've done.  I worked recently with a lady who (together with her husband) owned 3 rental properties and she was trying to convince a co-worker to go in with her on another purchase.  Her whole model was predicated on that stupid assumption that property ALWAYS DOUBLES every ten years so all you have to do is sit back and wait for that to happen so you can cash in down the track.  What she didn't readily talk about was the fact that they were struggling to keep tenants in their properties because they were all in undesirable parts of Melbourne (Tarneit, Hoppers Crossing) and when pressed she admitted it was a struggle for them to keep up with the payments.  I would also be surprised if their capital gains actually existed or not especially considering the luke-warm market for those outer-western areas.  Small-time landlords have been convinced there's no such thing as risk and that's what really worries me - many people don't have a plan B in case they're stuck with negative equity/no tenants.  I suppose because banks make the call to give them a commercial loan to begin with they think that it's all good not considering the possibilities if it all goes wrong...

It's also interesting that you are in Dubai - I transited though Dubai at the height of the GFC in 2009 and the guy sitting next to me on the plane was a regular visitor - he was telling me all about the westerners ditching their luxury cars at the airport.  Obviously they didn't have sustainable jobs/businesses, did they.

Yeah I've heard about the doubling tale about doubling every 10 years. My house in Gladstone falls into this catergory but only because they are building a massive gas terminal. Historically it was about 50% on average and that was mostly driven by inflation, for which the bank term deposit will out do the house price increase after costs. I bought a property on Macleay Island in Brisbane in 2002, one of few brick houses. There are a number identical so someone was building spec houses and selling. The rest of the island is timber and many I looked at money pits for a landlord. That house has been close to positive geared due to being full of social security resisdents who don't have cash to buy. Its very volitile though and last year we had 6mths no tennant. I only rent to OAP asa guide after a few initial bad tennants and make it a requirement they do direct payment for which I pay $1 per fortnight to do, but its works and taxpayer gives me 40% back. I had another very nice modern timber 2 story house house there and the publican lived there and they were great, when they sold the pub the new publican wanted to move in but the old one wanted to stay 3mths. It wasn't in my mind a house to rent to a bunch of rough nuts so we made it sale or rent and someone paid us enough to take th emoney and run. The publican's wife was a very well presented woman and she made her house look the same.

The problem with negative gearing is you eventualy run out of affordabiilty and cannot expand further, or usually its one property per 5-10 years. Positive gearing can go explod in a good market but you have to make sure you don't end up with a lot of property that you cannot tennants for. When I was in Queenstown in 1995 working. The old mine company had sold all the houses and left. The transportable ones sold for $30-40k, the sandstone non transportable ones for $10-15k but rented for $150-200/wk. So great return, but the town had one major employer!

In Dubai where I am in Arabian Ranches Villa prices are very ridgid. Because they built only a few different types and stilll fairly new. Return is 6-6.5% and pretty tight range for both sale and rent. But interest rates are 4% fixed so you can make money and tennants pay for all repairs and repainting on departure, 12mth rent upfront (I sign 1 x $30k rent cheque a year) and god help you if the cheque bounces, jail time until paid. Cheque transaction takes place the date written on cheque regardless on when you hand it over. Some times you can do multiple rent cheque per year, but costs more and all cheques are handed over at once, just different dates. The date is when you need to have that money in the bank.

Problem for expats here is you are only ever an expat, UAE citizenship or permanent resisdency is not available and don't bother asking. You can live here while you are sponsored and if your sponsor ie employer lays you off, time to go. In 2009 you had to go in I think 7-14days. Now its 30 days. If very wealthy you stay easiy by starting a Freezone shelf company, outside a free zone you have 51% local ownership minimum. So hence when there is a mass lay off period, cars get dumped along with furtniture and unpaid rents for cheques written in advance. Even Europeans cannot drive out as Saudi has very strict rules for entry and in general its not worth asking and if your wife is with you forget it, even if by some rare chance she wants to go. Now you have added interest of crossing Syria where as 3 years back once out of Saudi it was easy from there, Jordan, Syria, Turkey and you are in EU. So for now the market looks ok, but there is a very bad downside. If you leave and don't pay those cheques, you cannot come back. some people were able to pay their debts and come back once all is forgiven and you have clearance certificate to say so.

Should we be surprised at that?

Something that may surprise you is that Dubai doesn't have much oil left and it makes up less than 5% of economy. It spends $1B a year subsidising imports of oil to make petrol to sell for 45c/L. But they dont buy low grade oil for pollution reasons. Abu Dhabi (same country different Emirate) has all the oil and they don't share. But petrol prices are set by National govt and are most expensive in Gulf nations.

Exclusive: Ford Mustang returns to Australia after almost 50 years

BEREAVED Ford fans will soon have a reason to get over the loss of the locally-made Falcon.

The iconic Ford Mustang muscle car will return to Australia after almost 50 years. It will replace the Falcon as Ford's performance hero in 2016, the same year the Falcon is axed.

Ford's global vice president of sales and marketing, Jim Farley, will fly to Australia to personally deliver the good news on August 13.

Farley is the same Detroit executive who spent the past three years deflecting media questions about the future of Ford's Australian manufacturing operations.

The normally secretive Ford is taking the unusual step of making the announcement early because it is trying to reassure Australians it will continue to sell cars here even though it will close its manufacturing operations after 90 years.

Read more: http://www.news.com.au/lifestyle/exclusive-ford-mustang-returns-to-australia-after-almost-50-years/story-fneszs56-1226678919880

Well it's not like Ford doesn't have plenty of factories around the world to source products from.

As for the Mustang - niche vehicle or pitched at dad and mum (or visa versa ) ?

Interesting move, but how does a Mustang replace a Falcon? It might replace the Falcon Hoonmobile, but hardly anything else from the range.

Interesting move, but how does a Mustang replace a Falcon? It might replace the Falcon Hoonmobile, but hardly anything else from the range.

V8 Super Car events?

In response to Graham, it would almost certainly be the replacement at Bathurst wouldn't it?  I can't imagine anything else in the Ford global line-up would be suitable for our original local car race, nothing that I can think of off the top of my head anyway.

Incidentally is anyone taking bets on Holden making an exit announcement before the end of the year?  It was much more likely if Abbott got elected but I think with the recent negotiations on wage cuts and requests for more subsidies (a few hundred million more on top of what they have already got) it's becoming a fait accompli regardless of the election outcome.

I think that KRudd's crackdown to the FBT will have a bigger impact on local car manufacturers that anything TA says.

I think that KRudd's crackdown to the FBT will have a bigger impact on local car manufacturers that anything TA says.

Agree.  Watch Toyota and Holden make announcements very soon on pulling out of Australian manufacturing.

As a positive, it could get more people out of their cars and on to public transport, especially at peak hour when cars clog up city freeways...  But will governments put up the cash to improve PT infrastructure?  Or will they continue to build stupid and expensive road tunnels like Napthine wants to do due to lobbying from the RACV and the trucking industry?

V8 Super Car events?

Which more or less exactly what I said about the Hoonmobile...

Agree.  Watch Toyota and Holden make announcements very soon on pulling out of Australian manufacturing.

As a positive, it could get more people out of their cars and on to public transport, especially at peak hour when cars clog up city freeways...  But will governments put up the cash to improve PT infrastructure?  Or will they continue to build stupid and expensive road tunnels like Napthine wants to do due to lobbying from the RACV and the trucking industry?

Something needed to be done about that FBT system anyway - I worked for a charity once where they paid abysmal wages but the main compensation was supposed to be your 'free car', no log-book required.  My experience was that it was subject to a lot of abuse and it also actively discouraged anyone from using public transport, ever.  If there was any equity in the system then P/T trips should also have been deductible.

The fact that people will now need to show the split between personal and company use is simply good policy.

I think that KRudd's crackdown to the FBT will have a bigger impact on local car manufacturers that anything TA says.

Of course it is a targeted tax loop hole brought in by the LNP that has cost how many $Billions over the years. Personal expenses are supposedly not tax deductable  - travelling to work from home is supposedly a personal expense (catch public transport and you pay GST too). Get an FBT subsidised vehicle and the guvmnt will help pay for a drive to the beach !

You don't even have to buy an Australian built car !!!

Yep - we're not socialist but we'll grab anything a non socialist guvmnt gives with both hands

You could look at it as a car company subsidy without the actual handout.  ie they have to produce the vehicle and sell it.   Ford & Holden & Toyota are just putting their hand out and wanting the Government to fill it with the threat that they will put hundreds out of work if it doesn't.
Oh, by the way I walk to work and don't have a company or novated lease vehicle.

Of course it is a targeted tax loop hole brought in by the LNP that has cost how many $Billions over the years. Personal expenses are supposedly not tax deductable  - travelling to work from home is supposedly a personal expense (catch public transport and you pay GST too). Get an FBT subsidised vehicle and the guvmnt will help pay for a drive to the beach !

You don't even have to buy an Australian built car !!!

Yep - we're not socialist but we'll grab anything a non socialist guvmnt gives with both hands

I listened to the ABC the other day and they said it was introduced by Keating.  That makes it Labor you should be having a go at.

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