The demise of the Australian car industry is often blamed on the Button Plan of 1985. David Brown gives us some perspective of what it was and what it tried to do.
The Australian car market has many different makes and models, more than are for sale in the US.
But for locals to succeed you need economies of scale.
A government could squeeze foreign competitors with higher tariffs, help companies find export markets and/or reduce the number of cars models.
High tariffs hurt customers and diminish export potential. So they reduced tariffs. They encouraged model sharing – you could, for example, buy a Commodore badged as a Toyota Lexcen.
It is often forgotten that reducing the range of local models helps local component makers get economies of scale. We were way behind in that area.
The Button plan did try to address the specific problems of the car industry but could not manage to create the economies of scale needed.
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