Individual Contemporary Articles Analysis: Holden leave Australia
1.0 Introduction
This individual contemporary economic analysis is based on the article “South Australia stunned as GM announces Holden’s closure in Adelaide in 2017” published by news.com.au on 12 December 2013. The article reported that because of the significant after-tax operating loss, consumers’ performances shift and high production cost, the Productivity Commission that GM in Detroit decided to close operations in Australia.
Why Holden will shutdown and leave out of the country?
What have been done in order to save Holden?
What about the other manufacturer (TOYOTA) in Australia?
This analysis will discuss the past and current situation of Holden in Australia vehicle market. Furthermore, whether are the economics policies and strategies of Holden consistent to the economic theories or not will be analysis. The future Australia vehicle market will be looked to at the end.
2.0 Economic Analysis
2.1 Demand and Supply
In the past five years, all of the domestic and global car manufacturers were struggling with the contraction of car demanding. Due to the fears of the future economy, customers postponed to purchase new vehicles in the world. In Australia, smaller and more fuel-efficient cars started to be the first choice for the local consumers while the main stream of the market is second-hand vehicle. Because of these reasons, the sales value of the core products of Holden which traditionally known as large, powerful and fuel-inefficient are declining (Ibisworld 2013).
Figure 2.1 (a) reveals that the price of substitute goods, such as the smaller and fuel-efficient cars makes the car demand curve shifting. Environmental concerns and rocketing petrol price are the other vital factors can be considered.
The trailers advertised for these small-cars with high frequency. The contents of the advertisings are focus on the fuel-efficient and environment friendly that guide consumers pay for the small-cars instead of large car. Consumers began to prefer
This individual contemporary economic analysis is based on the article “South Australia stunned as GM announces Holden’s closure in Adelaide in 2017” published by news.com.au on 12 December 2013. The article reported that because of the significant after-tax operating loss, consumers’ performances shift and high production cost, the Productivity Commission that GM in Detroit decided to close operations in Australia.
Why Holden will shutdown and leave out of the country?
What have been done in order to save Holden?
What about the other manufacturer (TOYOTA) in Australia?
This analysis will discuss the past and current situation of Holden in Australia vehicle market. Furthermore, whether are the economics policies and strategies of Holden consistent to the economic theories or not will be analysis. The future Australia vehicle market will be looked to at the end.
2.0 Economic Analysis
2.1 Demand and Supply
In the past five years, all of the domestic and global car manufacturers were struggling with the contraction of car demanding. Due to the fears of the future economy, customers postponed to purchase new vehicles in the world. In Australia, smaller and more fuel-efficient cars started to be the first choice for the local consumers while the main stream of the market is second-hand vehicle. Because of these reasons, the sales value of the core products of Holden which traditionally known as large, powerful and fuel-inefficient are declining (Ibisworld 2013).
Figure 2.1 (a) reveals that the price of substitute goods, such as the smaller and fuel-efficient cars makes the car demand curve shifting. Environmental concerns and rocketing petrol price are the other vital factors can be considered.
The trailers advertised for these small-cars with high frequency. The contents of the advertisings are focus on the fuel-efficient and environment friendly that guide consumers pay for the small-cars instead of large car. Consumers began to prefer
References: “Holden business report 2012”, 2013. GM Holden Ltd. http://www.holden.com.au/resources/documents/Holden_Business_Report_2012.pdf "Holden to Build New Small Car in Australia." 2008.AAP Finance News Wire, Dec 22 IBISWorld. 2013. Newspaper Publishing in Australia. http://www.ibisworld.com.au/ McTaggart, Douglas, Christopher Findlay, and Michael Parkin Chart 2.5 Major players in Australia Vehicle Market. Data Source: IBISworld (2013)