Will the Aussie Commodore get Manufactured in China

[Wrinkles]

I understand GM is building a new Plant in Shanghai. The other day I was at a dealer having a look at a VE Ute and the sales Manager told me that they beleive in 10 Years time all our Aussie Holdens would be made in China. I hope this is not true he said it could mean a difference of upto $10k on a New car. Has anybody heard anhting along these lines?

[mmciau]

I understand GM is building a new Plant in Shanghai. The other day I was at a dealer having a look at a VE Ute and the sales Manager told me that they beleive in 10 Years time all our Aussie Holdens would be made in China. I hope this is not true he said it could mean a difference of upto $10k on a New car. Has anybody heard anhting along these lines?

I suppose it's a real possibility!

If we continue to buy vehicles "not manufactured or assembled" in Australia and Australian manufacturers cannot (or will not be allowed to) build cars relevant to demand and prevailing community expectations.

Shareholders demand their Executives get the best return on investment so if GMNA get a better return using a particular country to make cars, they will.

Mike

[zorro]

You will find it is entirely a possibility. The costs of manufacturing here compared to a country like China is unbelievable. When we pay workers here $35/hr they pay half that (or less) over there PLUS workers in those countries generally work harder than what we do here.

Take this for instance, I'm a rep for Boral and our factory for manufacturing our hire and sales gear is shutting. We can get manufactured and shipped all this gear from China for about half the cost. Even more of a mouthful is the plant in China is German owned, buys its steel from Japan which is manufactured from mined products from Australia!!!

Better deal on the same product sounds good to company high ups and shareholders. That is unfortunately how it goes, hence why eventually Australia will be outsourcing from O/S quite a bit and added to that our immigration will see us full of unemployed citizens and in time develop into a third world country.

[FunkyPig]

GM has a factory in Australia that it's heavily invested in, and its running near full capacity now or will be once G8 is at full speed, they won't throw that away any time soon. But they already build Caprices in China (Buick Park Avenue), so if there's a market in China then yes I see them bulding more derivatives there, but definitely not sending them to Australia within the next 10 years, or even 20 years. It would be marketing suicide and that's no secret to us or them. But having said that they might bring in low volume derivatives, like a new Crewman for eg. being built in the States as a GMC and sent here as a Holden.

Maybe Holden will wind back Australia production and base it more on local sales, while the Holden designed product is built offshore and exported from there around the world, that I can see happening with the A$ working against them.

[bok1]

when i was the foreman at a lighting company we got the light frames made in china and then shiped to italy for the glass and then brought to australia.the company paid 3 times less than what we could make them here in australia for.which id quiet pathetic.so yes i reacon they will move to china.they will get the job done cheaper and it will mean bigger profits to shareholder's and dividend returns.

[Jac001]

It isn't just the cost of labour but all the hidden costs associated with labour that makes it more expensive to biuld anything in australia.

A korean auto worker only makes a couple of bucks less per hour than his australian counterpart (gross pay).

The difference is that holden end having to pay things like workcover, payroll tax, etc which makes the total cost of the australian worker much higher.

Thats the first part of it.


The second part of it is capacity..

from wikipedia
Bupyeong-gu: vehicle assembly and gasoline/LPG engine manufacturing (production capacity: est. 440,000/year)
Gunsan: vehicle assembly and diesel engine manufacturing (production capacity: est. 260,000/year)
Changwon: vehicle assembly and gasoline/LPG engine manufacturing (production capacity: est. 210,000/year)


Holdens plant is aiming to 140,000 in 2008.

The more cars you biuld, the more cars you an spread your costs over, hence for the same price you can make more profit.

There is more complexity in the australian plant because it also biulds different bodystles such as a ute, sendan, stretched sedan and soon a wagon, and this complexity means great cost, less efficeny eg more down time.

[milkojnr]

Well if is the case. I will never buy a Holden again.

If I am going to buy a overseas built car I would by a M series BMW.

[Tyre biter]

...he said it could mean a difference of upto $10k on a New car. Has anybody heard anhting along these lines?

Call me cynical, but I doubt it. Yes, it may well cost Holden $10K less to build a Commodore, but I don't think you and I will see it at the other end.

The very little I have come to learn about retailing, and especially the car industry depicts that goods are sold for what they can be sold for (the perceived value/cost of the punter) as opposed to what they cost plus a standard mark-up.

For example, I doubt (IMO) there is the several thousand dollar difference in manufacturing cost between the SSV and SS, rather the diffference I expect is not very much at all. But many folks (myself included) are prepared to pay the loading because we perceive it is worth it in the end. Lee Iacoca's autobiography says much about this trait of the car industry, ie a Ford Escort was only minimaly cheaper to manufacture than the Lincoln Town Car but they could charge three or four times more because of the perceived value.

Cheers

[naj]

We (Austrlaia) might be safe for a little while.. Rudd's industrial 'direction' may help us keep our manufacturing plants here for a few more years..

[paulvdb]

Well if is the case. I will never buy a Holden again.

If I am going to buy a overseas built car I would by a M series BMW.

Not going to be Bavarian for much longer. BMW already make vehicles overseas to cut costs. Would you buy an M3 if it was made in South Africa or Eastern Europe?

I can see a time when we'll have Aussie supervisers overseeing production of our vehicles in Korea and China - closer really to many of the steel plants. Many of the fancy steels come from Asia. BHP only really makes housing/building construction steel. In my role prior role much the hightech steel came from Korea/Japan/Germany. None of it was made in Australia.


The very little I have come to learn about retailing, and especially the car industry depicts that goods are sold for what they can be sold for (the perceived value/cost of the punter) as opposed to what they cost plus a standard mark-up.
That's true but the extra money allows a company to build more models - eg Toyota (particularly coupled with their creative global accounting practices).

So if GMH could save a couple of grand per car then they could spend 1 grand on advertising and another grand on making a really small car, a slightly bigger car, a medium car, etc.

[vh-holden]

Well if is the case. I will never buy a Holden again.

If I am going to buy a overseas built car I would by a M series BMW.

the cheapest M series BMW being over $150000 new.

[planetdavo]

Less and less people are buying local cars these days, and if the Aus $$$ stays so high compared to the US $$$, exports become far less workable.
Less exports equals more chance of a shutdown. Also, the majority of the parts that make up VE/WM aren't even made in Australia any more!
Many people really don't care about country of origin these days, as long as they like the price.
I really hope this doesn't happen, but Nissan left around 1992, now Mitsu is going this year.
That's 40% of the companies making cars locally 20 years ago.....


the cheapest M series BMW being over $150000 new.
I'm tipping there wouldn't be a lot of cross brand shoppers there!

[DIEFASTER*WH]

Lets hope they don't. A couple of years ago, China ordered a few WK statesmans rebadged them as a Daewoo/Buick, had a rear badge like three overlapped crowns (looked awful) powered by...........a 2.8Lt V6 haha. Instant tank lol.
And if anyone in Adelaide saw the Sunday Mail with the article on china's circus's violating animals rights you'll understand why they shouldn't build cars
The picture was of some poor horse carrying a 190kg lion on its back!!! :shock: :confused: Followed by a 222kg tiger :mad::vpo:. If thats not underpowered I dont know what is...****ing shocking. Takes real people to abuse animals hey, ****ing losers :kapow::bash::kill::slap::guns:

[ATOMICSS]

Call me cynical, but I doubt it. Yes, it may well cost Holden $10K less to build a Commodore, but I don't think you and I will see it at the other end.

The very little I have come to learn about retailing, and especially the car industry depicts that goods are sold for what they can be sold for (the perceived value/cost of the punter) as opposed to what they cost plus a standard mark-up.

For example, I doubt (IMO) there is the several thousand dollar difference in manufacturing cost between the SSV and SS, rather the diffference I expect is not very much at all. But many folks (myself included) are prepared to pay the loading because we perceive it is worth it in the end. Lee Iacoca's autobiography says much about this trait of the car industry, ie a Ford Escort was only minimaly cheaper to manufacture than the Lincoln Town Car but they could charge three or four times more because of the perceived value.

Cheers

You are spot on in your comments. And another reason why all the calls for Australian plants to build Corolla sized cars are off the mark. Theyd cost almost as much to build and could only be sold for half as much.

With regards to your SS vs SS-V comparison, I reckon the SS-V could cost as little as $500-$1000 more to build than an SS.

[CharlieDontSurf]

If it ever happens, which in the short term its not going to happen, Holden would have to market test with a low volume product first. The only Chinese made car sold in Australia so far was a VW Polo sedan a few years ago which was pulled bc it had huge quality issues and resulted in more damage to the VW brand than sales.

The other big thing is that the awakening giant that China is is going to be flat out making cars for itself for the next 10 years before they have experience and volume for export. They will be the biggest car market in the world which is why every Major car manufacturer is setting up joint govt ventures there.

We are safe for now. But Japan and Korea are what they will base there rise to power on and look at them now. :)