Disposable income rise to save automotive manufacturing
The automotive industry is one of the largest manufacturing industries in Australia, especially given that Australia is one of the few countries in the world that have the capabilities to design vehicles from scratch and produce them in large quantities.
However, the recent economic crisis has led to a decline in auto manufacturing, and many local automakers are struggling to compete with their foreign counterparts.
Current state of Australia's automotive industry
The number of vehicles produced in Australia has dropped dramatically over the past few years.
Just five years ago, Australian automakers collectively manufactured more than 300,000 vehicles a year, but this year, they produced just a little over 200,000 units. This reduction in production volume has a significant adverse impact on the auto industry, which relies greatly on economies of scale to remain competitive and profitable.
As such, some automakers in the country are considering closing down their manufacturing plants, which can put the auto industry in serious jeopardy.
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Causes of the decline
There are several factors that are contributing to the demise of Australia's automotive industry. First, the high Australian dollar has made it harder for automakers to produce competitively-priced cars. As such, consumers are increasingly opting for cheaper imports.
Additionally, car buyers are showing a preference for foreign-made sport utility vehicles and turning their backs on the family sedans that have been the backbone of the country's auto industry for decades. The lack of government support also adds to the woes of the industry.
Electric car sales in Australia
Australian car buyers are slow to embrace electric vehicles because of a number of reasons. Most of them still prefer to purchase gasoline-powered cars mainly because they are concerned about the high price tags of electric cars. They are also deterred by the limited range of electric cars and the lack of charging stations.
Also, the government is not providing enough incentives to encourage Australian car buyers to switch to electric vehicles.
However, automakers are taking measures to make electric vehicles more affordable, environmentally friendly and fun to drive. This may increase the appeal of electric cars in the future.
Leading auto manufacturers in Australia
The three main auto manufacturers in Australia are Ford, Holden and Toyota, and all of them are undergoing tough times. In May, Ford announced that it may shut down its manufacturing plants in Australia in 2016.
Meantime, both Holden and Toyota are losing money on the vehicles they are producing in Australia, and the fate of their plants depends on the government's willingness to provide financial assistance.
Forecast for automotive industry
Despite the dismal situation, some experts are predicting that Australia's auto industry will experience a rebound in the coming years.
As the economy continues to recover, an expected rise in real household disposable incomes may result in an increase in the sale and production of vehicles. The government is also making an effort to help automakers move forward.
Australia's automotive industry accounts for a significant percentage of its gross domestic product and total employment.
A good outlook for the industry can mean sunnier days ahead for Australians.
About the author
John McMalcolm is a freelance writer who writes on a wide range of subjects, from small business marketing to reviews of websites such as AISInsurance.com.
Bytedance CFO to TikTok CEO in 5 weeks: who is Shou Zi Chew?
When the world’s most valuable startup ByteDance, owner of TikTok, snatched 39-year-old finance exec Shou Zi Chew from the clutches of Xiaomi back in March, and gave the 39-year-old the financial reins of the US$400bn valued company, it was pretty big news.
Not just because it was the first time Bytedance had employed a CFO or that he had landed the only other C-suite position besides CEO Zhang Yiming, but because rumours were swirling that Beijing-based Bytedance was about to float and Chew, who had previously taken Xiaomi through a successful IPO, was being brought on board to do the same.
However, just five weeks into his role as CFO of Bytedance, with speculation growing as to the when and where of an IPO, Chew, who is a Singapore national, landed the top job (CEO) at TikTok too – a role currently considered to be the biggest job in tech – in addition to retaining his CFO position at parent company Bytedance.
The world's most challenging roles?
That's quite a responsibility. Not just because of the popularity of TikTok (think 689 million users worldwide and the world's most downloaded non-gaming app in the first quarter of 2021) and the revenue of Bytedance (US$37bn in 2020), but because the data privacy complications that TikTok and Bytedance have been enduring for a while now, with Chinese and US governments, are not going away.
Complications that led to the departure of TikTok’s previous CEO, former Disney exec Kevin Mayer after just three months in the job, when during his tenure the US government issued two executive orders within eight days aimed at forcing ByteDance to divest TikTok's operations in the US. This is far from TikTok's, or rather, Chew's only challenge. With India, once TikTok's fastest-growing market, now having banned the platform for political reasons, the challenge for Chew will be, where to grow TikTok?
This will no doubt be a business imperative for Chew, in finding a way to both grow the platform and to restructure the business to meet regulatory requirements both demanded by the US and Beijing. As will taking Bytedance through its initial public offering, something that has been rumoured about. According to Reuters, ByteDance has been considering whether to go for a standalone public listing for Douyin, the Chinese version of TikTok, or list some of its Chinese operations, including Douyin and news aggregator Jinri Toutiao, as a package in Hong Kong or Shanghai.
Why is Chew the man for the biggest job in tech?
So, who is this man with so much responsibility on his Singaporean shoulders? And more importantly, is he up to the job(s)? Well, he's used to working with billionaires, having worked for Russian billionaire Yuri Milner‘s internet investment firm DST for five years. In fact, it was here, at DST, in 2013 that Chew first came across Bytedance and where he led a team as early investors in ByteDance – what was then just a small startup housed in a Beijing residential flat.
Chew's credentials are pretty impressive too. Not only does he have an economics degree from University College London and an MBA from the Harvard Business School, where he spent a summer working for a then startup (Facebook), but his experience in some of the world's top companies straddles both tech and finance.
Chew began his working life in investment banking at Goldman Sachs, where he focused on technology, media and telecoms’ investments, before joining private equity firm DST Investment Management as a partner for five years.
He then joined Chinese electronics giant Xiaomi as Chief Financial Officer, where he was the youngest of the C-suite and where he was not only instrumental in securing much-needed financing from investors, but oversaw the company’s Hong Kong IPO in 2018, one of the largest-ever Chinese tech listings and the first-ever IPO in Hong Kiong Stock Exchange to realise dual-class shares.
He spent six years at Xiaomi before being snapped up by Bytedance. And according to the man who hired him, billionaire founder and CEO of Bytedance, Zhang Yiming, Chew's "deep knowledge of the company and industry” will add "depth to the team, focusing on areas including corporate governance and long-term business initiatives. I believe Chew's accession can help us further expand our global business."
Watch this space.