Analysis and Commentary

Australia alone in G20 not making cars

Analysis and Commentary

By Peter Roberts

The news from Saudi Arabia is great for the world car industry but marks a new low for Australia’s automotive sector.

California electric vehicle manufacturer Lucid Motors has opened the first car manufacturing plant in Saudi Arabia, as the country makes good on its promise of making automobiles as well as other manufactures.

All well and good. But Australia is now the only member country of the G20 that is not making its own cars.

Think about that, even Ukraine, Serbia, Slovenia, Kazakhstan and Uzbekistan outside the G20 make their own cars.

Australia’s shame is a big fall from the heyday of the 1970s when Australia was the 10th largest carmaker in the world, or even the early 2000s when Australia produced around 400,000 cars a year.

581,759 cars were imported and sold in Australia in the first half of 2023.

Admittedly the new car plant in King Abdullah Economic City near Jeddah is initially assembling a small number of vehicles from kits, it plans to fully manufacture 155,000 cars a year from mid-decade.

Making from kits was common in Australia at the height of the protectionist era when alongside the Big 4, small volumes of cars such as Volvos were put together from complete knock-down (CKD) kits.

It is one way you start an industry or company – begin by full assembly then gradually introduce local parts to the vehicles, and ultimately design models that can be largely manufactured locally.

Australia doesn’t even do this. Yes we modify small numbers of imported SUVs and large American twin cab utilities, and these do have a small number of components made locally, say, to make the conversion from left to right hand drive.

At the opening of the Saudi plant Lucid Motors CEO Peter Rawlinson said: “We are delighted to make history today in Saudi Arabia by opening the country’s first car manufacturing facility, which will produce our award-winning electric vehicles and support the country’s vision for a more sustainable and diversified economy.”

An outside observer looking in at Australia might surmise that our recent vision has been to consciously de-industrialise.

Picture: Lucid Motors

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