Manufacturing News

Australian automotive manufacturing back in the black in 2012: report

Australian motor vehicle manufacturing is expected to grow by 14.3% this year, and the value of exported vehicles will return to growth for the first time since 2009, a report says.

The industry will grow to over $11.9 billion in 2012, as it begins to recover from the financial crisis, however revenue is still expected to fall $5 billion shy of pre-crisis levels, according to an IBISWorld Industry report called ‘Industries to fly and fall in 2012’.

“The provision of a more diverse range of products and more environmentally friendly vehicles will be key factors assisting domestic growth,” said the report’s authors.

“Domestic sales of large vehicles have fallen sharply in recent years. This is not simply because of a shift to smaller more efficient vehicles. 

“The predominately imported sports utility vehicles (SUV) are more popular than ever. Many traditional big car buyers are choosing a SUV over a large sedan such as a Holden Commodore or Ford Falcon, which is further eroding domestic sales.”

Exported vehicles will return to growth for the first time since the financial crisis; this will be “paramount to the growth of the industry” as the domestic market cannot support multiple large vehicle manufacturers, according to the report.

IBISWorld predicts growth in the diamond and gemstone mining, biotechnology, online education and online shopping sectors this year.

Iron and steel manufacturing will continue to plunge in 2012, with the strong Australian dollar and weaker economic conditions causing exports to fall by more than 45%, according to the report.

Pulp, paper and paperboard manufacturing will also take a hit, falling 3.7% as more Australians turn to electronic formats such as iPads and e-readers. 

“Delays in the development of a number of key production sites such as the Gunns mill in Bell Bay, Tasmania and the Protavia mill in Penola, South Australia have also dented industry productivity,” said the report’s authors.

Institutional building construction, cotton ginning and cut flower growing will also decline this year.

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