Productivity Report paints a gloomy picture of car industry's future Anybody who thinks that throwing more taxpayer money at Australia's vehicle industry will guarantee its survival - even centred on one company, Toyota - should read the Productivity Commission's preliminary report. It will be followed in March by a second report that considers what sort of support might secure a future for the industry - a future for Toyota, in effect, now that Holden has followed Ford in setting a date for the end of local car making. The first report is ominous. It estimates about $30 billion of assistance was provided to Australian car makers between 1997 and 2012 without securing the industry's future. Manufacturing capacity exceeds demand globally, subsidiaries of the big car-making groups are all competing for a place in global manufacturing platforms, and despite continuing efforts by vehicle builders here to cut costs, a "substantial cost gap" between Australia and other parts of the world exists, the commission says. It says labour costs here are not substantially different to those in developed countries but they are four times or more those of China, Thailand and other developing countries where demand and production are rising strongly. In export markets, the local industry is also handicapped by the high Australian dollar and barriers to trade. A substantial increase in the volume of vehicle production here is needed, it says, but it's a huge ask. About 200,000 vehicles were produced in Australia in 2012, about a quarter of 1 per cent of global production. Toyota, the last car maker standing, produced just over 100,000 vehicles - but most experts consulted by the commission believed that a globally competitive production run for the type of mass-market vehicle produced in Australia needed to be at least 200,000 to 300,000 vehicles a year. The Productivity Commission report does make it clear that the end of car making here won't spell the end of the entire automotive industry. About 45,000 people are employed in the manufacture of cars, trucks and buses, as well as automotive engines, automotive electrical components and products for the automotive aftermarket. On the commission's preliminary survey, however, it's difficult to see what kind of support will keep Toyota here long term.