The cessation of automotive manufacturing in Australia last October does not mean that the industry will no longer have a significant economic footprint.

The VACC’s report into the current state of the industry showed that the automotive industry contributed $37.1 billion or 2.2 percent of Australia’s GDP in 2015/16. After the closure of car and component manufacturing, the industry contribution will decrease to around $35.1 billion or 2.1 percent of GDP.

“Significantly, this places the contribution to GDP from the automotive industry to be above that of many other industries including Agriculture ($26.2billion); Education and Training – private ($28 billion); Arts and Recreation Services ($12.6 billion) and Public Administration and Safety – private ($5.5 billion),” the report says.

“The automotive industry will remain a vital contributor to Australia’s economy, employing more than 360,000 people well beyond the closure of manufacturing operations.”

Officially, there were 379,365 people employed nationally within the automotive industry in 2015/16 across 69,365 businesses, however “it is likely that the true population of automotive businesses operating within the Australian economy, as confirmed through industry intelligence, is between 80,000 to 100,000 businesses nationally,” according to the report.

The Automotive Repair and Maintenance sector contains the largest automotive workforce and business population (142,632 and 37,406 respectively) and delivers the single biggest contribution to GDP ($9.5 billion).

Beyond October 2017, Automotive Repair and Maintenance, along with Motor Vehicle and Parts Retailing and Motor Vehicle and Parts Wholesaling, will comprise approximately 76 percent of the business population and more than two-thirds of industry employment and IVA, thus representing the economic mainstay of the automotive industry.

Economic contribution

“The automotive industry has always played a vital role in Australia’s economy, contributing significantly towards employment, consumer spending, skills development and economic growth,” the report says.

“Whilst all automotive sectors add value to the economy, it is the Automotive Repair and Maintenance and Motor Vehicle Retailing sectors that dominate the contribution to economic growth by order of their sheer size.”

Value of automotive trade

“Automotive exports have exhibited considerable volatility over the past few years, often in accordance with fluctuations in the Australian dollar,” the report notes.

“In 2016, the total value of industry exports was 2.95 billion, a decrease of 11.8 percent over 2015. This decrease was primarily driven by a $282 million reduction in export of passenger vehicles to the United States, Canada, New Zealand and the European Union, along with decreases in exports of goods transport vehicles and parts and accessories ($71 million and $38 million respectively). By contrast, exports of motorcycles, bicycles and other cycles have exhibited consistent growth over the past three years.”

The value of automotive imports continues to grow consistently. In 2016 automotive imports reached $34.42 billion, an increase of $1.79 billion or 5.5 percent, over 2015.

“Passenger motor vehicles account for the bulk of industry imports (62.2%) and grew by over $1 billion in 2016, along with goods transport vehicles (21.9% of imports and $802 million in annual growth). Record low interest rates, greater affordability of new motor vehicles and reductions in demand for locally produced vehicles are key reasons for increased motor vehicle imports over the period.”


Automotive trade training is amongst the most populous within the Vocational Education and Training (VET) system, with 41,457 students enrolled in automotive qualifications in 2015 and around 11,000 new students commencing automotive trade training each year.

The apprenticeship system remains the preferred model of skills formation and development by automotive employers.

Massive indirect impact

The Australian Bureau of Statistics identifies a total of 114 industries that contribute towards Australia’s GDP. Of these 114 industries, 104 are recorded as purchasing automotive goods and services for intermediate usage towards the value of their own production.

That is more than 91 percent of all Australian industries that use the goods and services of the automotive industry as intermediate inputs towards the value of their own production.

The Road Transport industry is amongst the largest industry users of automotive goods and services ($6.8 billion worth). Motor vehicles continue to be the preferred form of transport with 71 percent of people travelling to work or study by passenger vehicle and 88 percent using vehicles to get to places other than work.

Motor vehicles continue to influence the development of suburbia and the accommodation of growing populations in urban and regional areas through the expansion of roads and land use.

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