GENERAL MOTORS CASE STUDY - ASSIGNMENT SOLUTION

Introduction

The following assessment is a case study report on General Motors – Holden in Australia. The purpose of this assessment is to discuss the impact on the Australian motor vehicle industry. The case of General Motors – Holden discusses how the departure of Holden from Australia in 2013 was followed by Toyota and Ford in 2016 and what impact that they had on Australia. 

Background

The reason behind the departure of Holden from Australia was discussed by very few analysts. According to Green (2017), the Holden closure could have been avoided, and the fact that retaining car assemble manufacturing could have been beneficial for Australia The purpose of those tariff-free manufacturing was job creation through the “infant industry”. But Green (2017) reported that GM Holden only realized that this strategy is not for job creation, but its primary purpose is rent-seeking target rate of return. 

However, with the closure of Holden’s manufacturing, the Australian automobile industry lost its viability (Fisher, 2017). Since the Australian car manufacturing industry highly relied on government subsidies, so after the departure of Holden, Toyota and Ford, the local car manufacturers pushed the Australian dollar to rise. Moreover, Australia had another sat back when the policy-makers found clueless for the future. Australian clean-energy sector also failed internationally to make an impression due to the absence of national energy policies for decades (Fisher, 2017). 

Competitor Analysis

The departure of leading car manufacturers from Australia had the most damaging effect on the Australian economy. There were direct and indirect consequences faced by Australia with the closure of General Motors – Holden, Ford and Toyota. Australia had to face ultimate job losses for over 50,000 within 12 months (Dowling, 2017). Moreover, Australia faced pressure from international competition and trade agreements. General Motor – Holden ended the car manufacturing in Australia as well as negatively affected the Australian “Free Trade Agreements” and balance of trade (Novak and Dowling, 2013). Particularly, Australia failed to keep up the 5 free trade agreements with Thailand, United States, Japan, China and South Korea (Stanford, 2016). However, the car industry objected that without tax incentives, government assistance and import tariffs, no country can uphold its car manufacturing (Dowling, 2017).