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Australian car industry hits wall
Wheels coming off: Australia's car industry is in deep trouble. Picture: Getty Images

Australia faces a future without a car industry after Toyota signalled it might follow Holden and abandon domestic production.

Holden, which produced its first car in 1948, has blamed a "perfect storm" of economic conditions for its "irreversible" decision to quit production in Australia in 2017.

While 2900 Holden workers will lose their jobs, up to 50,000 workers with component makers and suppliers could be affected nationwide - including 2000 in WA.

Holden general manager Mike Devereux said yesterday that the decision to shut its Melbourne and Adelaide plants was made by US parent company General Motors after looking at "every possible option" to build its next-generation cars in Australia.

In a bleak assessment, Mr Dev-ereux said "building cars in this country is just not sustainable".

"Australia's automotive industry is up against a perfect storm of negative influences including the sustained strength of the Aussie dollar against almost all major trading currencies, the relatively high cost of production and the relatively small scale of the domestic market," he said.

Holden follows Ford, which this year said it would end Australian production in 2016, and Mitsubishi, which left in 2008.

Toyota issued a short statement signalling its future in Australia was now at risk.

"This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia," Toyota said.

"We will now work with our suppliers, key stakeholders and the Government to determine our next steps and whether we can operate as the sole vehicle manufacturer in Australia."

The Opposition was quick to blame the Government, pointing to its decision to remove $500 million in industry support.

Shadow industry minister Kim Carr said that for "considerably" less than $150 million a year in government subsidy, Holden's future could have been assured.

"This is a victory for the North Shore bankers who sacrifice tens of thousands of workers," Senator Carr said. "They played chicken with the industry and now we have the consequences."

Industry Minister Ian Mac- farlane, believed to be the sole Cabinet minister arguing for more taxpayer support for Holden, said he was "floored" when Mr Devereux told him of the company's decision.

He believed the car industry would survive in Australia.

Prime Minister Tony Abbott told Parliament the Government would soon announce measures to rebuild confidence in regions affected by Holden's retreat.

"This is a dark day but there will be better days," he said.

Mr Abbott said Australian industrial centres had flourished through hard times in the past.