DAILY NEWS Dec 11, 2013 1:49 PM - 0 comments

GM to stop making cars in Australia by 2017

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In a decision that could spell the end of car manufacturing in Australia, automaker General Motors Company will stop making cars and engines in Australia by the end of 2017, with nearly 2,900 jobs to be lost, because of high production costs and competition.

GM’s Australian subsidiary Holden once dominated Australian auto sales, but lost market share to imported cars. Ford Motor Co., once Holden’s major rival in Australia, announced in May that it was ending production in the country in 2016. Toyota is the only other auto manufacturer in Australia.

Australia had four car manufacturers before Mitsubishi Motors Corp. shut its doors in 2008.

The decision reflected the “perfect storm of negative influences” that Australia’s auto industry faces, GM’s CEO Dan Akerson said in a company statement. Describing Australia as “arguably the most competitive and fragmented auto market in the world,” he also blamed the sustained strength of the Australian dollar, high costs of production, and a small population. Holden, which has manufactured cars in Australia for 65 years, would become a sales company, Akerson said.

The announcement was made the same day GM revealed that Akerson will be replaced by Mary Barra on January 15. Barra becomes the first female head of a U.S. car company.

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