By the end of 2017, volume car production in Australia will cease. Ford and GM both announced that they would close their operations last year. Toyota announced in February that it would close down by the end of 2017, ending some 60 years of Australian car production. The announcements fulfil the prediction made by former Ford boss Jac Nasser last year, that once one manufacturer closed, the others would follow because the supply chain would not be viable.

Australia is already one of the most competitive car markets in the world with over 60 brands for sale from car manufacturers around the world. This stiff competition has in turn led to new cars becoming some of the cheapest to buy anywhere in the eastern Asia-Pacific region.

The main car production factories belonging to GM, Ford and Toyota are set for closure over the coming years. This is due to government financial incentives coming to an end and the rising costs of exports.

And with import tariffs being reduced, the Australian market could be set for further competition and upheaval over the next few years.

The New Zealand government of the 1990s adopted a similar policy. Import tariffs were reduced to zero letting in a large number of cheap, older Japanese cars to address its ageing car parc.

As well as helping contribute to the closure of the country’s car assembly plants, the cheap Japanese cars with a lack of vehicle provenance potentially compromised the safety of Kiwi motorists.

Nearly 20 years on, the Australian market looks to be heading in a similar direction to New Zealand. The Australian Productivity Commission (APC), the Government's independent research and advisory body, has the market’s future in its hands.

It is considering relaxing car import tariffs to allow more Japanese used cars to be imported into the country. But with that comes the potential of cars with no servicing or safety provenance reaching Australia by the bucket load.

The older a car gets in Japan, the more expensive it is to tax and keep on the road. As a result, there is a rich volume of cars ready to be exported.

More serious is the potential threat of compromising Australia’s used car prices. These are already at a record low.

The Kiwi market is now looking at only allowing lower emission used cars to be imported in future as the country looks to reduce emissions of its car parc over the coming years. This is already leading to more premium cars being imported from the UK and could lead to a reduction in the older cheap imports coming in from Japan.

Preservation of the environment is also a major focus in Australia so one option might be to restrict imports to those that meet strict emission levels.

Whatever the outcome of the APC’s ruling the Australian automotive sector is set for further change at a time when the country’s manufacturing and mining industries are also facing a stiff challenge.