Chery says Australia should restart car manufacturing

Summary: Chery International president Zhang Guibing thinks Australia should restart car manufacturing. With enough robots, enough government policy reform, and enough interest from other brands, he says it could work. He has not explained why a Chinese company that builds cars far more cheaply in China, South Africa, and Spain would have any compelling reason to do it here.

The argument is dressed up as opportunity but reads as distraction, Drive reports. When Ford closed its Australian plants in 2016, its local cost structure was double that of Europe and nearly four times that of Asia. Robots reduce headcount but they do not relocate supply chains, eliminate currency exposure, or conjure the decade of institutional knowledge that left when Holden and Toyota followed Ford out the door.

What Australia does have is Premcar and Walkinshaw: engineering outfits that develop and upfit vehicles to world standard without requiring a government subsidy architecture that no longer exists. That is not nothing. But it is a very long way from a Chery production line in the northern suburbs of Adelaide. Zhang’s chairman has apparently asked him to lead the thinking on a local factory. The thinking does not appear to have progressed far.

Brands mentioned: Chery, Holden, Ford, Toyota, Tesla, Nissan, Volkswagen, Ram, Chevrolet