Fuel has become the political issue
of the moment, and while today prices are in the forefront, attention will soon be on the
jobs those prices destroy. The Australian motor car manufacturing industry is
built around the production of the large cars that buyers are turning their back
on as petrol settles around $1.40 a litre. Token steps to replace petrol with
gas are not going to change the market reality that producing the wrong product
at the wrong time is the recipe for receivership.

On Monday Mitsubishi spokesman Kevin
Taylor was bravely predicting a revival in sales of gas
guzzling six cylinder saloons as he announced a further cutback of 100 jobs from
its assembly line. We’ve “been carrying some extra labour on the assembly
line … in the hope that the market would pick up, but it hasn’t done that.”
According to its marketing and financial plans, claimed Mr Taylor, Mitsubishi
was still on track. These targets included weekly orders, sales to dealers, cash
flow and profits. “We’re ahead of our plan on almost every target you care to
mention,” he said.

Well, he would say that, wouldn’t he?
Once people think Mitsubishi is finished as a car manufacturer it will be
finished. Nothing turns a car buyer off more than fear that a brand is going out
of production.

And the one target on which Mitsubishi
is not ahead, apart from staff reductions, is sales of the locally-made 380
sedan, which dropped to about 800 in July, compared to more than 1,500 the
previous month. Not to worry. Mr Taylor said the company had expected to sell
fewer cars last month and was still confident the large car market would pick up
later this year, following the launch of the new VE Commodore and the Toyota

“The only thing we have to go by is
history,” was his cheerful spin. “And if you go back and look at the large car
segment over the past 20 years or so, every time there has been significant new
product introduced to the market, there has been renewed interest in the

The history I remember does not
contain fuel prices at current levels, and Mr Howard for one obviously expects
them to continue to be high or he would not be bothering to grandstand as he did
in the Parliament with his new fuel plan. Australia’s
production capacity for six cylinder cars is now greatly in excess of current
and expected demand.

I fear that the 380 will soon be as
much history as the P76.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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