Vehicle Market Executive Summary

Overall, Australia proves to be a great country to invest in. They have had many years of annual economic growth characterized by a high GDP per capita income of 42,400 U.S. dollars and a low unemployment rate of five percent. Currently, Australia is experiencing some inflation, so consumers may be more willing to purchase a cheaper sedan alternative such as a utility scooter. Alternatively, due to inflation, the automotive industry is suffering and cannot produce cars cheaper than they can import them from Asian and European competitors. Australia is a very wealthy and urbanized country, but has recently been affected by inflation and a higher cost of living, so the potential market for a luxury limousine may not be as beneficial as for the market potential for a mid-sized sedan. There are ocean ports all along the coastline of Australia. Corruption is minimal and there is limited government, so starting a business in Australia should be relatively easy.  

Perth City Analysis

Perth, Australia  

1.) Perth, Australia is an example of a national metropolis on the hierarchy of Central Places, with a population of about 1,897,548. Australia is an interesting country because 80% of the population lives within 100 km of the coast. Sydney, on the opposite side of the country has the largest population of any city in Australia at about 4,667,283, which is only a fraction of the 8 million that populates New York City.

• Leederville- village, population about 2,741, suburb of Vincent
• Vincent- town, local government of western Australia, population of about 31,771
• Perth- national metropolis, population of about 1,897,548
• Sydney- national metropolis, population of about 4,667,283

2.) Perth offers a 'central business district' or the downtown area which is home to many corporations as well as retail and entertainment facilities. Perth is the capital of Western Australia, so it holds parliament and government buildings. There are four public universities in Perth: University of Western Australia, Curtin University (my study abroad site!), Murdoch University, and Edith Cowan University. There is also one private catholic university, the University of Notre Dame. Home to many professional sports and professional sporting stadiums, such as the Paterson's Stadium that houses Australian rules football and many other professional sporting events. There are also many theaters and museums throughout the city. The Perth Airport is the fourth largest airport in Australia.

News Summary: 'Aussie Dollar Battles Against Global Forces'

1.) The Australian dollar has lost more than eight percent against the U.S. dollar in the last month, and this decline does not appear to be over any time soon. Currently, there is not a lot of enthusiasm from investors to buy the AUD (Australian dollar) due to an "increased disappointment in the global recovery, the high cost of Australian commodities, and the increasing popularity of the U.S. dollar". The future of the Australian dollar seems gloomy when the recent rise in Japanese government bond yields and the possibility of false Chinese economic data are also factored in. If the United States confirms the beginning of the slowing down of the U.S. Federal quantitative easing program, the AUD could possibly fall to as low as nine U.S. cents. However, if they dismiss this, then the AUD could jump swiftly back up to around ninety-nine U.S. cents. China has had a key affect against the Australian currency. Many economist doubt that Chinese exports have grown seventeen percent in the past year. Some suggest that the actual growth is only half of what was reported. There has also been a loss of buying interest from Japan because Japanese investors have found better opportunities in their own country or elsewhere. "In a sobering assessment, the consultancy says: 'There was little sign in the April data of a meaningful recovery after the weakness of the first quarter.'"

2.) This article directly relates to the effects of the Australian dollar on the Australian economy and how Australia competes globally. Due to the increase in the Australian dollar, Australian's are more inclined to buy things from overseas which creates problems for the retail market. The tourism industry has also been directly affected by inflation. Foreign tourists were not traveling to Australia as often because of the high costs, and Australian's were more likely to travel outside the country rather than within it. The automotive industry faces a real threat because it is much cheaper to import foreign cars than it is to produce cars in Australia. Eventually, the collapse of the Australian automotive industry seems to be a very real issue.

3.) This inflation has been caused by the questionable Chinese economic data, the decrease in Japanese investment, and the increasing popularity of the U.S. dollar. Some economists suggest that tax reforms should be introduced as well as an increase in investments in innovation and infrastructure development. The idea of these investments is to attract more foreigners to Australia and make Australian business more competitive. Inflation and interest rates need to be stabilized by a stable fiscal and monetary policy. Somehow, the value of the Australian dollar needs to be stable in order for businesses and people to invest in the economy with confidence.

The dollar's dive looks far from over, even though it has already lost more than 8 per cent of its value against the US dollar since the middle of last month.

News Summary: Australia's Trade Surplus

1.) For the first time since 2011, Australia has recorded a moderate trade surplus. The surplus was caused by a 1% gain in exports to $27.75 billion and a 1% decline in imports to $22.44 billion. Export growth was due to an 11% rise in "other" mineral fuel revenue, an 8% increase in cereal grain exports, and a 2% gain in metal ore and mineral sales. The decline in imports seems to confirm that the mining construction boom is starting to slow down. An 11% fall in imports of capital goods, like heavy machinery, to $4.73 billion in March demonstrates that businesses were spending less overall on expansion. Imports such as consumption goods remained unchanged, car imports and leisure goods continued to rise, but clothing and footwear imports saw a 9% decline. RBC economist Michael Turner said, "The themes within today's trade data are likely to be repeated in coming months: an improving trade balance as the resource boom shifts from the investment phase (requiring higher capital imports) to the export phase". However, there are also economists that have a more pessimistic outlook for the Australian economy. Westpac senior economist Andrew Hanlan stated, "We see the risk that Europe remains in recession, that the pick-up that we've seen in the US peters out and that China - while it has improved somewhat - there's a lack of follow through. So we're actually forecasting commodity prices to decline from the middle of this year, and that will tend to push the trade numbers back into deficit sometime during the second half of 2013".

2.) This relates to the equation for GDP that we have been continually referring to in class. The equation for GDP is GDP = Consumption + Investment + Government + Net Exports (Exports - Imports). So, hypothetically, if Australia continued to see and increase in exports and a decrease in exports they would also see a rise in GDP. Certain economists are predicting that trade will fall back into a deficit. A trade deficit meaning that imports exceed exports, which would cause GDP to then fall.

3.) I believe that a solution to solving trade deficit permanently, not only in Australia, but also in many countries all over the world, is clearly something that economies continually struggle with.

http://www.abc.net.au/news/2013-05-07/australia-swings-back-to-modest-trade-surplus/4674458?section=business

Transportation in Australia

1.) Water Transportation
 The largest ocean port in Australia is Melbourne. Followed by Sydney, Brisbane, and Newcastle. The image below shows the port of Melbourne (pink), Sydney (light green), and Brisbane (light green).

2.) Land transportation
In Australia there are multiple tram and passenger operators. They offer services such as intensive suburban trains, electric tramways in large cities, commuter trains, and long distance interstate and luxury trans-continental journeys. Below is a rail map of Australia.

The network is categorized into five groups based on road function:
1.) National Highway (Great Northern Highway, the north-south strategic freight route to the east)
2.) Coastal Route (Brand Highway and North West Coastal Highway, the coastal north-south strategic freight route)
3.) East West Route (Geraldton-Mt Magnet Road and Mr Magnet-Leinster Roads, linking Geraldton to the eastern Murchison and northern Goldfields and Goldfields Highway, linking the Goldfield and Pilbara Regions)
4.) Wheatbelt Access Roads (links to Wheatbelt towns and grain receival points); and
5.) Tourist Roads (links to tourist destinations).
Below is an image of the National Highways in Australia.

3.) Air transportation
The International airports of Australia are Sydney, Perth, Brisbane, Melbourne, Gold Coast, Darwin, Cairns, and Adelaide.