12 hours ago
9
A top Chery executive says more robots on production lines – and help from the government – could make producing cars in Australia viable again.
Chery has proposed a return of Australian car manufacturing to support what it says are "too many" manufacturers operating in one of the busiest markets in the world.
The Chinese car giant has admitted a return to the era of Holden, Ford and Toyota-esque operations will be "difficult" as it is still expensive to build a factory, employ staff and produce a car in Australia.
It has, however, floated that – with enough interest from other global car brands, as well as the Federal Government – increased use of robots could make a return possible.
Chery International president Zhang Guibing admitted to Australia and New Zealand media in China that the growing car brand has considered the construction of a manufacturing plant in Australia.
"Australia has too many car manufacturers, because based on the market size, I think they should have one factory or some different factories. But I think, today ... most of the factories, later they are dismembered," said Zhang.
"Time by time, our chairman has also asked me to lead the thinking if it is possible we can make the factory return back again or something."
The executive said proposals have been struck down on financial grounds, as it is much more expensive to build a car in Australia than in China or other regions in South-East Asia, with cheaper labour.
"The cost plus the tax or something is a big difference, so I think it's difficult. This is something, maybe, the government's side need to consider," said Zhang.
"Why is there cost? Because, for the car manufacturer, they need a line that is very long, the channel is long, and also concerned about the component side. Also, too many people involved.
"I think Australia, the cost for the people is also not easy."
Where the Chery executive claims the door could open to a return to Australian car manufacturing at scale is with the increased use of robots, to reduce the number of workers needed on the production line.
"Maybe in the future, when more and more robots can be working in the production line, and maybe the government need to modify the policy, I think the factory comeback is maybe also possible," said Zhang.
"But I think this is not dependent on one car manufacturer. I think it needs the whole system together, thinking it."
The current Federal Government offers grants for companies looking to manufacture in Australia, but the Automotive Transformation Scheme designed specifically for car production no longer exists.
Much of the expertise once used for developing Ford Falcons now designs, develops, and tests Ranger utes and Everest 4WDs sold in close to 200 countries around the world, even if they are produced elsewhere.
Premcar, the engineering outfit behind the defunct Ford Performance Vehicles, develops and locally upfits imported utes to flagship off-road specifications for car brands such as Volkswagen and Nissan, along with offering engineering services to brands looking to develop vehicles locally.
Cross-town counterpart Walkinshaw, formerly behind Holden Special Vehicles, conducts similar work alongside manufacturer-backed 'remanufacturing' of full-size Ram, Chevrolet, and Toyota pick-ups from left- to right-hand drive.
Outside of China, where it sources all of its models for Australia, Chery has purchased former Nissan factories in South Africa and Spain to localise production for those regions.
It also operates plants in key Asian countries, where steep taxes on imported cars make local production far more lucrative.
"In Malaysia, Indonesia, Thailand, all of the countries, we have the factory, because the government make a completely different tax situation," said Zhang.
"So [excluding] the import tax, they also have some other tax; if you have the factory, you can enjoy ... many different tax reductions.
"... Because the government has such kind of policy and supports the local investment or something, in these countries ... They have the good capacity to produce a car. All sell the car. We are local manufactured."
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
