LONDON (Financial Times) - General Motors’ Holden subsidiary closed its last major car assembly plant in the country on Friday, bringing to an end a century-old industry that forms the bedrock of Australia’s manufacturing industry.
It follows similar decisions by Ford and Toyota to cease local manufacturing as the carmakers failed to cope with reduced tariffs on cheaper Asian imports following the inking of free trade deals that flooded the market with cheap imports.
 But the problems are not isolated to Australia. It is one of a number of developed economies struggling to compete as global car manufacturing increasingly shifts to the emerging markets such as Mexico, where the cost of production is lower.
 The Holden closure raises questions and intensifies the debate over the long-term viability of production in the world’s richest nations. "The global shift in production is one of the consequences of free trade deals between countries with big labor costs differences,” says Felipe Munoz, global automotive analyst at Jato Dynamics.
In North America, carmakers are still investing in Mexico, despite the threats by U.S. President Donald Trump against carmakers that shift production out of the U.S.
Audi has begun using the country as the centre for global production of the Q5 premium SUV, while BMW is also opening a plant to produce 3-series sedans for the global market there. Toyota will also move production of the Corolla to Mexico, while General Motors is expanding its plants in the country. Ford had planned to make its next Focus model in Mexico, although it has shifted production to China. Volvo, which is owned by China’s Geely, also uses China as a global export base for the S90 saloon.
 In Europe, there has been a flurry of investment by Jaguar Land Rover, Volkswagen and Mercedes-owner Daimler in car plants in central and eastern nations Slovakia and Poland, where manufacturing costs are a fraction of those in Germany and the UK. Manufacturing in high-cost countries such as Australia "only really makes sense when you have an export hub,” says George Galliers, an auto analyst at Evercore ISI.
 Nations such as the UK and Germany are dependent on exports — close to 80 per cent of cars made in both countries are sold abroad. This emphasis on exports puts the focus on free trade agreements, FTAs, which proponents of Brexit in the UK have cited as a way to open doors to selling the country’s cars to nations such as the U.S. and China. But in Australia, where a free trade deal with Thailand saw the market flooded with cheaper cars, and the U.S., there is more negative and hostile mood over the benefits of free trade agreements.
Yet when Holden and Ford attempted to export Australian-made cars to Thailand, they complained they often faced hidden non-tariff barriers that made exports unsustainable.
General Motors’ Holden subsidiary closed its last major car assembly plant in Australia.