Australia Competition and Consumer Commission

Question: Discuss about the Australia Competition and Consumer Commission. Answer: Introduction The Australian automotive industry is on its way to lose biggest car manufacturers such as Ford, Toyota, and Holden- a General Motors subsidiary. There are some who blame the Australian local government for the demise. The reason behind the fact is the refusal that the Australian government had once made in the year 2013. The government did not come to the rescue, which was needed to resolve the issues related to the high Australian dollar, shrinking domestic market and the elevated production cost. The existing scenario has already been responsible for several job cuts, which were supplied through reputed brands in the automotive industry. Politicians have expressed their grief concerns over the scenario; however, nothing seems to be happening at the practical level (Williams 2017). However, there are still hopes alive as Tesla has shown its interest in the market. The company is planning to introduce the Electric Vehicles (EVs) in Australia. The concept has a good reception in some other regions such as China, the UK, and France. The governments of the respective countries have supported the concept (ABC News 2017). The paper this investigates the existing and the future state of the automotive industry in Australia. Five forces analysis PESTLE analysis of automotive industry in Australia Political The existing political state is less supportive of the automotive industry. The refusal of the Australian government to rescue the declining automotive industry in 2013 probably supports the same fact. The supports had needed on the increasing value of the Australian dollar that resulted in high costs for the production. Additionally, the supports were also required to avail the relief that has been shaken by the shrinking domestic market. The political parties have expressed their saddened views on the declining industry. Such grief does not look handful at the moment (Williams 2017). However, the future of the automotive industry may witness a change provided the local government shows a changed concern for the same (Wollmann 2012). Economic There are several reasons behind the collapsing automotive industry in Australia. The industry could not take advantage of the economies of scale as the Australian market is very small. Consequently, they had to rely on foreign resources to get the materials as well as the labors. This has worked until the time when trade tariffs were manageable and the value of Australian dollar was also profitable. However, the situation has now changed as the trade tariffs have increased. There is an appreciation in the Australian dollar. Additionally, the unions have demanded higher wages and a better working condition. These are some factors that have hampered the competitiveness of the Australian automotive industry (Swinburne.edu.au 2017). Social Australia is amongst the top nations that have the highest GDP per capita. The fact does state that the Australian population is highly capable of purchasing the cars (Tradingeconomics.com 2017). Additionally, customers purchase cars for their different purposes. They need fun on roads, which is possible through the different transport modes that also include the cars. They also need cars to serve their daily purpose (Shende 2014). The destruction of the automotive industry has in it a very less contribution to the customers. However, the future of cars manufacturing can be brighter provided the country welcomes the Electric Vehicles (EVs). The Australian government was held responsible for the destruction as they did not provide any relief against the identified challenges. Additionally, the common people have in them a very less interest towards the Electric Vehicles (EVs). They are less fascinated by the concept as the customers of other regions are such as China, France, and the UK (Axsen and Kurani 2012). Technological The technological infrastructure has also been influenced by the appreciated value of Australian dollar. The investments have been less in the Research Development (RD) process. The existing technology is about to end. However, Electric Vehicles (EVs) may encourage a revival. This is so because the physical layout, which is involved in the manufacturing of Electric Vehicles have less moving parts. This further means that there will be the fewer requirements of workers. This will help to save on wages expenditures on the workers. This was indeed one of the reasons behind the worrying condition of automotive industry in Australia. The Federal Government needs to support the concept through making investments in the improvement of technology. This can be attained through new plants and the new car manufacturing designs (Roberts and Grover 2012). Environmental The environmental pressure is almost the same in the worldwide automotive industry. This is because of the incrementing greenhouse gas emissions. Such emissions are greatly contributed by the different transporting means. Cars are one of those transporting means. People now have much awareness of the reasons behind the polluting environment. This has brought differences in the existing trend in the automotive industry. Consequently, the major automotive industries have already considered switching to the alternative option that is the Electric Vehicles (EVs). China, France, and the UK are some of those markets. The existing environmental facts are now much in favor of electric vehicles. However, there are doubts in the battery charging stations that are supposed to emit CO2. Despite the fact, the electric vehicles produce comparatively very less CO2 (Zhou, Ou and Zhang 2013). Legal The automotive industry does also need a solid legal support to enhance the manufacturing practices and reduce the few of the existing barriers. There is a need to bring changes in the laws policies to allow customers import their new vehicles directly. There is also the need to revise the state of play in relation to the data of vehicle repair. An analysis is required to monitor the Australian Competition and Consumer Commission (ACCC) involvement in the automotive industry (Richards et al. 2012). Profitability of the industry The industry is towards the end. It has been the place for some of the most reputed car manufacturing brands in the world. Mitsubishi, Ford, Toyota, and Holden- a subsidiary of General Motors had all attracted towards the market (Anaf et al. 2013). The industry could have been profitable for the existing car manufacturers if it has gone the right way. Some factors have contributed to a less competitive environment in Australia. The Australian market is very small to exploit. Additionally, the high labor costs and the union demands for good working conditions were the few factors that hampered its competitiveness. In the Asian region, the labors are available at a wage, which is only one-fourth of the entire labor costs in Australia. The high labor costs and the demands to have a good working condition have both encouraged looking for offshore locations. Such locations were viewed to get the required materials (Barbaro and Spoehr 2014). It was not much a problem until the business environment started to change. The strengthening of the Australian dollar year after year had forced the manufacturers to bear the loss in the form of high expenditures on production. Additionally, they were required to pay high tariffs on imported goods. Dependence on the offshore locations to get the much needed competitive advantage was hit by the incremented trade tariffs (Barbaro and Spoehr 2014). There was no firm support either from the Australian government. They were required to take some initiative to support the automotive industry to help those face the identified challenges. However, many have felt that the local government had shown no such sign of emergency to the identified challenges. Toyota is one of those companies, which has decided not to manufacture the cars in Australia. The company has already announced to shut down its Altona plant. This will impact thousands of workers who were the part of the plant (the Guardian 2017). The industry can be profitable as believed by few experts if it considers the manufacturing of Electric Vehicles (EVs). This is so because the common peoples perception is moving towards a CO2 free transportation. People nowadays are much more educated on the reasons behind the incrementing greenhouse gas emissions. This has fascinated the concept of electric vehicles. Additionally, the costs of manufacturing can be reduced as electric cars have less moving parts and thereby, this would require fewer workforces. Both the trends and the involved costs are in favor of a drive of the dying automotive industry in Australia (Richardson 2013). Factors driving the profitability The existing scenarios are not much in favor of the car manufacturers. The automotive industry is indeed adding worries to the car manufacturing companies with the passage of time. However, there are some factors as follows, which may supposedly drive the profitability of automotive industry in Australia (Hawkins et al. 2013): There is a response required from the Australian government in terms of providing reliefs against the appreciated value of the dollar and thereby, against the incremented trade tariffs. People living in the country are required to have elevated thoughts for the Electric Vehicles (EVs). EVs have thought to be the future of automotive industry across the globe. Opening up competent plants to support the manufacturing of EVs. The plants are needed to be technologically advanced. This will not only help to produce the EVs but will also help to possess the much needed competitive edge. Expected change in the factors Australias transport domain is responsible for 17.4% of the entire greenhouse gas emission in the country (Australian Greens 2017). The Australian Greens is a project that is formed to respond to the identified urgency. They are a confederation comprising of parties from eight states territory. It serves four key principles such as environmental sustainability, social justice, workers democracy and peace non-violence. The Greens has been in existence for the last 30 years. In course of fulfilling the committed vision, the group has identified the needs for Electric Vehicles (EVs) in Australia. They are also expecting a firm support from the local government in terms of investments in the existing transport infrastructure. The transition from the existing vehicles to the EVs will be possible only if both the confederation and the local government respond to each others needs (Australian Greens 2017). Effect of the change in the industry's profitability The identified change in terms of efforts given to bring the EVs and the expected investments in the automotive infrastructure might bring few changes to the existing automotive industry. The industry will be able to get the EVs, which are the future cars. The EVs will serve the needs of the Green that is committed to lowering the greenhouse gas emission. If it happens this will not only improve the environmental condition but, this will also provide a much-needed revival to the automotive industry (Falahi et al. 2013). The efforts of "the Green" are also expected to drive the local government's interest towards the prospect. A much-needed investment in the automotive industry is expected from the government. If this happens, this will provide the boost to the automotive industry through the manufacturing of Electric Vehicles (EVs). Nevertheless, there are requirements for the plants that are equipped with advanced technologies. This will help to manufacture EVs in Australia though maintaining the competitiveness as well (Falahi et al. 2013). The efforts of the Green can also be useful in changing the perception of customers for EVs. Electric Vehicles are the future of cars. The rising greenhouse gas emission will add worries to the environment. There are some revivals of the identified threat that also includes the production of EVs. The Australian people are expected to have a changed perception towards the Electric Vehicles (EVs) (ABC News 2017). Conclusion To conclude, the automotive industry in Australia is nearing its end as it is found in the discussion. The existing situation is because of the local government that has supposedly failed to deliver on the needs. There was the need to provide revival against the appreciated nature of Australian dollar and the increased tariffs on trades. These are some factors that have supported an increment in the costs of production. Consequently, Toyota is one of those manufacturers that have planned to shut down its plants. The shutdown of Altona plant of Toyota is one of such examples. Hopefully, if the government of Australia takes serious initiatives for Electric Vehicles (EVs) this might bring a much-needed revival for the car manufacturers. The common people are also required to have a changed perception for the EVs. 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