...successful vehicle manufacturing company, Toyota Australia (Toyota), as it evaluates radical strategic options in light of contracting sales and no sign of improvement in future. Established in 1958 in Port Melbourne, Australia (Toyota Australia n.d.), Toyota became very successful locally and started to look for opportunities overseas. It made its first shipment abroad in 1986. By 2011, Toyota became the largest exporter of manufactured automobiles in Australia, exporting 73% of vehicles overseas. However, in 2013, as GM-Holden, a competing Australian vehicle manufacturer, announced complete shutdown of its operations by 2017, Toyota was facing existential threats both at home and abroad. In 2013, there were only three vehicle manufacturers in Australia. However, Toyota’s main competitors were not the Australian, but overseas car producers. Starting in 2005, Australia embarked on signing the Free Trade Agreements (FTA) with Thailand, the ASEAN counties, and New Zealand (Australian Trade Commission n.d.), as a result exposing local manufacturers to significant competition. Increased competition from the overseas car manufacturers eroded the revenues of all local producers. Toyota also had to reduce its production volume and operate at an unprofitably low capacity utilisation rate. In an effort to improve its competitiveness in 2012, Toyota launched a Toyota Australia Future Business Transformation, a cost-cutting programme (Toyota Australia 2012). According the case study, this programme...
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...Executive Summary Traditionally, Australia-China trade & economy was simple. Australia met the demand for raw material for China’s manufacturing & China exporting back to Australia its finished manufactured goods. Thus China-Australia became each other’s largest trading partners. Now that China’s economy is affected, less spending on infrastructure the demand has shifted from raw materials & commodities to other specialized manufactured equipment, services like health, education, financial, engineering, agriculture etc. for which Australia has to change gears to gain distinctive advantage to its other competitors. However in Chinese economy there still exists substantial market for Australian commodities, such as wool, wines, wheat, minerals & iron ore, as Australia has advantage of nearness by sea for the shipping lines. The Free Trade Agreement is a win-win situation as Australia can easily meet the changed needs of Chinese for sophisticated medical goods & services in Health, Social Security, Human Resources, Banking, Education, Legal, Agriculture, Winery & Dairy. China’s economic woes & slowdown in addition to general economic slump has impacted Australia hard, specially the mining cum trading houses at present. This impact is not limited to just Australia but whole of Asia-Pacific, lain America & Canada. Thus to conclude, there are some positives about the Australian economy as GDP growth is up from the last year & China needs Australia, as it shall always need trading...
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...AUSTRALIA 1. Political and legal system Analysis Australia is democracy like many countries around the world. There is no violent political problem in Australia that can affect to the global or local business. Politic in Australia in the past few years still not quite stable because of the falling popularity of Labor leader, Mr. Kevin Rudd as Prime Minister and turn into the hands of Ms. Julia Gillard but the confidence in the eyes of global and also in Australia still be strong to having any investment or trading business because people can accept an election and no any problem occurred following an election too. The export policy still being stable and they will not change it frequently because the government can manage the country well and people satisfy with it. The foreign company or the company that export product to Australia can trust in their stable politic and they will not afraid of any violence political problem to be their investment or exporting problem in Australia. Australia still also stays in free trade area agreement with ASEAN, Chile, Singapore, the United States and New Zealand, including Thailand too. 2. Economic Analysis The economy of Australia is a developed, modern market economy with a GDP of approximately growth 2.7% and GDP per capita $40,836 in 2010. Economic in Australia also is very interest to export product because there have high GDP and it is not fluctuate, it is quite stable. Their economic is growing everyday and also their import...
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...Analysis of the Economy Export, Import and Production In recent years, Australia has been a net exporter of goods and net importers of services (See appendix 1). The country, rich in natural resources, is a major exporter of commodities. Iron-ore and gold account for 28% of total commodities exports (81 Billion US$ in 2013). Coal represent 18% or 38 Billion US$ and oil and gas for 9 percent. Manufactured goods constitute 33 percent of the total exports with food and metal products and machinery and equipment accounting. Agricultural products, particularly wheat and wool make up 5 percent of trade outflows Australia is a major importer of machinery and transport equipment, computers and office machines and telecommunication. Main import partners are China (15 percent of total imports), United States (13 percent of total imports), Japan (8 percent of total imports) and Singapore (7 percent of total imports). Trading Partners Trade with the Asia-Pacific region has become increasingly important for Australia. Of Australia's top sixteen major trading partners (representing around 80 per cent of merchandise exports); countries from the Asia-Pacific region are the destination for around 89 per cent of this trade. China is the most important trade partner of Australia, the country export Iron ore and gold as well as oil and many raw materials. China is also Australia’s largest source of imports. Major imports from China are mostly finished goods that include clothing, communications...
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...January 21st 2013 Australia’s economic growth relies on Asia’s continuing demand for resources Many countries in Europe and US are dealing with fiscal crises, banking sector instability and serious downside growth risk. Fortunately, Das (2012) point out that Australia has a great probability in the future to face global economy problems. Australia is rich in natural resources, and because of their natural resources, it helps Australia to show a great performance in economic sector (Das, 2012). Australia’s economy activity keeps increasing, also added by the amount of demand for exports from China. With the large demand of exports from China, it proposes new opportunity in diversifying trade relations from European Market. Unfortunately, Australia is too depending itself on Asian demand. If decreases happen in demand from China, it will affect headline GDP growth. From now on, the intention of this discussion is to Australia’s economic growth, which relies on Asia’s continuing demand for resources. Nowadays, Australia’s growth is really depending itself to china’s demand. Plumb, Kent, and Bishop (2012) mention that the boom in the resource sector is one of the sectors that got an effect from strong growth in Australia. Plumb, Kent, and Bishop (2012) say that there are three overlapping phases that this boom has. But he believes that someday the demand for commodities will be easier because development of economies in the Asian region will shift from goods to services. Some...
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...DOLLAR Until 1971, the Australian dollar (AUD) was “pegged” to the British pound. This meant that the AUD rose or fell in line with the pound. In 1971, the AUD became pegged to the US dollar instead. These currencies were fixed currencies, which meant that the Australian currency would only change value when a major world currency also changed. This system lasted only until 1974 when the AUD became pegged to a trade-weighted selection of other currencies. This was still a fixed currency. In 1976 this selection of currencies became moveable. Small shifts were able to take place when needed. In 1983 the AUD became a floating currency. This means that the value of the dollar is determined by supply and demand. Initially, the Reserve Bank of Australia was not intended to intervene in the market however since then it has been deemed necessary for intervention to take place, usually to prop up the price. FACTORS AFFECTING SUPPLY AND DEMAND OF AUSTRALIAN DOLLARS With a floating exchange rate, such as Australia’s, supply and demand factors largely determine the dollar’s equilibrium price. The exchange rate is sensitive...
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...pwc.com.au The Australian Dairy Industry The Basics The Australian Dairy Industry From family farm to international markets Key points œ Australia is a small producer of milk but is the worldfs third largest dairy exporter as 50% of production is exported. œ The Australiafs dairy industry is Australiafs third largest rural industry, ranking behind wheat and beef, and has a gross value of $4 billion. œ Australia produces a range of dairy products including milk, milk powder, yoghurt, butter and cheese. œ The Australian dairy industry is concentrated in the south-east of Australia, Victoria is the largest production state, however other states have significant dairy industries. œ Victorian production is typically seasonal and enters the export market which makes it prone to volatile global prices. Other dairy production areas (i.e. much of NSW) supply the domestic market which requires year-round production. œ The dairy industry is heavily reliant upon water availability; the industry is currently facing uncertainty over water policy. œ Since deregulation in 2001, the industry has undergone rationalisation. This has left a core of efficient producers that are able to compete against international competitors who are heavily subsidised. Contents Key points i 1 History of the industry 1 2 What and where 2 2.1 Map of production 2 2.2 What is produced where 2 3 Challenges and advantages 3 4 Major markets 4 5 Milk and its products 5 5.1 Fresh...
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...Australian wheat exports The wheat industry has the largest market value of any grain crop within Australia. With the majority of wheat production sent overseas in bulk exports. As a direct result Australia competes with other larger suppliers in a highly competitive market. With a highly concentrated production, 10% of growers account for just over half of Australia's wheat production, it is vital for the industry to rely on a highly efficient supply chain to be competitive with other countries. The first wheat was produced in Australia over 200 years ago under the careful watch of Governor Phillip, fast-forward to 2004 and Australia produced over 26 million tonnes of wheat. While this value only makes up around 3% of the worlds wheat production Australia's wheat exports, over 15 million tonnes, account for approximately 12% of the global trade for wheat each year. On average the largest states in terms of wheat exports are Western Australia and South Australia, this is mainly as a result of relatively low domestic demand due to smaller populations. The destination of Australian wheat has varied over time, currently Asia is the major market receiving just over 63% of exported wheat in the five years up to 2008-09. This can be attributed to rapid population and economic growth, prompting increased demand that cannot be filled by domestic Asian producers due to a variety of production constraints. The supply chain for Australian wheat exports is dominated by three major...
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...identified as the Malaysian dollar. Ringgit comes into notes and coins. A Ringgit can be divided into 100 cents. The currency is denominated into RM1, RM2, RM5, RM10, RM50 and RM100 while the Ringgit is denominate into 5 cents, 10 cents, 20 cents and 50 cents. The currency of Malaysia is currently pegged at RM3.80 to US$1.00. Malaysia centre bank is Bank Negara Malaysia. Malaysia main trading partner is U.S, Japan and Singapore. Through the background economic of Malaysia, the largest deposits of tin in the 1840s led to Malaysia is being responsible for nearly half of the world’s tin output. Started in the early 20th century, the booming of the country’s agricultural sector is being seen that the rubber is replacing tin as Malaysia main export product. Today, Malaysia is one of the largest exporters of semiconductors and electronic goods. The factories devote about 30% Malaysia’s total manufacturing sector output and there are 40 semiconductor companies operating in Malaysia. By the time, the International multi-national companies have set up assembly and testing units in Malaysia. The important reserves of oil and gas are founded. The oil production occurs near Peninsular Malaysia as well as the regions of Sabah in east Malaysia ad Sarawak. Natural gas production has been steadily rising with several companies engaged in its production. In 2007, the 3rd largest economy in South East Asia and the 29th largest economy in the world was the economy of Malaysia through the purchasing...
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...DOLLAR Until 1971, the Australian dollar (AUD) was “pegged” to the British pound. This meant that the AUD rose or fell in line with the pound. In 1971, the AUD became pegged to the US dollar instead. These currencies were fixed currencies, which meant that the Australian currency would only change value when a major world currency also changed. This system lasted only until 1974 when the AUD became pegged to a trade-weighted selection of other currencies. This was still a fixed currency. In 1976 this selection of currencies became moveable. Small shifts were able to take place when needed. In 1983 the AUD became a floating currency. This means that the value of the dollar is determined by supply and demand. Initially, the Reserve Bank of Australia was not intended to intervene in the market however since then it has been deemed necessary for intervention to take place, usually to prop up the price. FACTORS AFFECTING SUPPLY AND DEMAND OF AUSTRALIAN DOLLARS With a floating exchange rate, such as Australia’s, supply and demand factors largely determine the dollar’s equilibrium...
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...Introduction Australia has always been a trading nation. Its political, immigration and cultural links with other countries have been reinforced by international trade and investment, with its high reliance on imports such as electrical appliances, cars, clothes, footwear, PCs and watches being a reminder of these trade links. The influx of imported products has benefited Australia but in recent decades, the reliance on them has caused problems for its economy. Such problems have included trade deficits, whereby the value of imports has exceeded that of exports by between $12 and $20 billion each year. They also include foreign debt in money owed overseas, which has increased from roughly $19 billion to $527 billion since the 1980s, as well as causing unemployment. The increasingly complex pattern of Australia's trade links and the broadening of its export base reflect the attempt at tackling these ongoing problems. See image 1 Although Australia relies heavily on its overseas foreign investment and employers, with hundreds of foreign companies operating in Australia, it is also a high exporter of goods, services and capital, with most of its exports going to markets in South-East Asia. Agricultural goods and minerals dominate Australia's exports, as do some of its service firms such as Qantas which is well known overseas. This chapter will explore Australia's trade links in its membership of international trading blocs and agreements, its shift away from its traditional trading...
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...Executive Summary The purpose of this report is to explore and analyse the topic of ‘Australia’s economic growth relies on Asia’s continuing demand for resources’. This has been done by finding Australian economy, Australian economic growth and the vulnerabilities of its economy. This report has found out that Australian economy able to cope crisis because of the stimulus package, government’s guarantees and mining boom. For the growth of demand in mineral resources are affected by the investment, China’s economic development and low interest rates. Nevertheless, there’re several vulnerabilities of Australian economy which are slowdown in China, crisis in European and US and the climate. The report recommends that diversify its industries and export markets will be the best way to reduce its vulnerabilities on Asian demand. 1. Introduction 1.1 Overview of the task This report will deal with the issue of Australia’s economic growth which is depends on Asia’s continuing demand for our resources. Therefore, to do this report, it will analyse three key criteria in relation to the Australian economic. The first...
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...TOPIC 2 – Explain the various factors that may cause fluctuations in foreign exchange rates. In the case of Australia, what industries are vulnerable when the foreign exchange rate is high? Explain your answer fully. An exchange rate is the measure of value of one currency against another currency; for example, AUD $1 = USD $1.03 (indirect quotation). Exchange rates are dynamic in that they are changing throughout every trading day. Basically, fluctuation is caused by demand and supply of the currency. As in any market, price rises with shortages of supply and increases in demand. Price falls with reduced demand and increased supply. Figure 1.1 Demand curve The demand curve for Australian currency shows the quantity of Australian Dollar (AUD) that buyers are willing to purchase at each possible exchange rate. Demand arises from several sources * Exports – Foreigners who wish to buy Australian goods and services * Foreign tourists and international students in Australia * Australians firms borrowing abroad * Foreigners investing in Australia (capital inflow, e.g. assets, dividends etc) * Current transfers into Australia * Speculators who expect the value of AUD to rise The curve is downward sloping (Figure 1.1 – blue) since it is reasonable to expect that the cheaper the price of the local currency, the greater would be the demand for the currency by the rest of the world. Supply Curve (red) Supply curve for Australian currency shows the quantity of AUD...
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...Graphs 1 and 2 highlight the growth trend in GDP per capital from the years 1998 to 2009. Note that New Zealand’s GDP per capita is overall lower than Australia but this is not the point of interest. What is to be highlighted is that Australia’s trend of growth continues to increase, however New Zealand’s trend declines slightly in the year 2009 which reflects the policy implemented and the time lag it took for the global financial crisis to affect GDP per capita. Graph 3 [pic] To further reinforce Australia’s position is the Canadian trend which shows a reduction of GDP per capita during 2008, and as confidence in the economy picks up, the GDP per capita for 2009 is much more positive. As shown through the graphs, Australia is in a relatively stable position in terms of GDP per capita as compared to other developed nations, with no fluctuations and only a steady increase in growth reflecting the successful macroeconomic policies which promote consumption and consumer confidence in the economy. Although successful policies implemented by the Government and the RBA may have dampened the effects of the global financial crisis and allowed our GDP per capita to stay strong and continually increase, there are other factors which have contributed to Australia’s current strong position in GDP per capita. Australia has always been a country with high mineral yields, which has driven the economy significantly even today....
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...Essay Four (Exchange Rates): Topic 2 – Australia in the global Economy Outline the causes of a decrease in demand for the Australian dollar, and discuss the impacts on the Australian economy of a sustained depreciation of the Australian currency. The exchange rate is a measure of the value of a currency relative to another and is influenced by the demand and supply of the Australian Dollar (AUD). Changes in any of the factors that affect supply and demand causes the AUD to rise or fall. The demand for the AUD is derived from the demand of Australia’s goods, services and assets, which is impacted by domestic and international economic conditions. Therefore, factors such as decreased capital inflow from investors, decreased demand for Australian exports and speculation that the AUD will fall are the predominant causes of the decrease in demand of the Australian dollar. This decrease in demand has resulted in a sustained depreciation of the Australian currency that has resulted in various positive and negative implications for the Australian economy. Capital inflow impact the exchange rate as foreign investors wanting to invest in Australia must exchange their own currency for Australian dollars therefore impacting the demand for Australian currency. The level of Australian interest rates relative to overseas interest rates may influence their investment decisions. Recently the interest rate has fallen from 3.75% in May 2013 to 2.25% in April 2015, causing a decrease in...
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