It has already been well documented that Australia’s car assembly industry is facing extinction as our final two auto makers – Holden and Toyota – cease production from October this year.
The official Department of Employment projection is for the closure of the car industry to cost some 27,500 manufacturing jobs over the five years to November 2020:
However, Valadkhani and Smyth (2016, Table II, p.698-701) also estimated that beyond the direct impact on manufacturers and parts suppliers, there will be a significant impact on output and tens of thousands of job losses in downstream and upstream industries, in particular the Professional, Scientific and Technical Services (PSTS) sector:
Roy Morgan Research (RMR) has presented the latest State of the Nation Report in Melbourne, which included a special Spotlight on the Australian Automotive Industry.
The State of the Nation Report looks at the changes underway in the Australian automotive industry and the even bigger changes that are set to impact on every part of the industry throughout the 2020s.
While current car sales are booming – with more than one million sales recorded in 2016 and expected in 2017 – RMR identified 2025 as a tipping point for the industry as a whole as it faces digital disruption, whereby any automotive players that fail to plan fully for the future involving increased car-sharing, driverless cars, and purely online sales will find it far too hard to catch up to “first-movers” by the time 2025 rolls around.
The car market is currently being driven by Baby Boomers, who will obviously shrink in importance in the future. The number of Boomers in the market for a new car is up 112% since 2006, whereas Millennials in the market for a new car is up just 49% in the same period.
Specifically on car sharing, RMR believes that it is set to take off in the 2020s in preference to outright ownership of cars as changing attitudes to cars, led by Generation Y, begin to permeate a larger proportion of the population. The higher proportion of people living in high-rise apartments will also make car ownership more difficult.
One million Millennials (18%) have Uber on their phone or tablet, whereas 200,000 Australians are now using car-sharing services, almost half (96,000) of which are Millennials.
RMR identifies 16 industries within the broader automotive sector that are in danger of shrinking. These industries include car dealerships, car makers, insurers, fuel retailers, grocery retailers, taxi/ limo companies, accident repairers, transport companies, fuel companies, auto financiers, discretionary retailers, parking garages, car classifieds, car rental companies, outdoor media, and motoring associations.
