The development of the Australian automotive industry was prompted its proximity to other car-making countries, which meant that it would be sensible if it manufactured their own automobiles. Herbert Thomson and Edward Holmes from Armadale, Melbourne, are credited for developing the first real Australian car in 1896, which came to be known as Phaeton. The Phaeton, a one cylinder steam carriage with energy displacement of 5 horsepower, made its maiden trip a distance of 493 miles at an average speed of 8.7mp/h 1 . Harley Tarrant followed 5 years later with an invention of his own petrol-driven automobile, the first in Australia. Tarrant’s vehicle was powered by a Mercedes engine fitted on its posterior end which had the energy boosted to 6 horsepower. Thereafter, Tarrant’s automobile was followed by better designs that revolutionized over time. The spare parts of these later designs were manufactured locally. From 1926, the automotive industry experienced tremendous development which it had never experienced before by attracting investors and keen scientists. In 1929, J. F. Crosby, an investor and entrepreneur, spotted the industry and invested heavily in Eclips Motors pty Ltd, which in turn bought Standard motors. This was later on changed to Tablot and Standard Motors. The industry experienced more changes in the years that followed which saw the demise of small manufacturers from the scene as the big industrial leaders reinforced their hold by buying out the small scale manufacturers. The favorable tariffs that were adopted in the industry played a critical role in helping the automotive industry in Australia grow, expand output and increase employment within the industry even into international scenes. In the case of Australia, the tariff rates charged on automobiles imported from other countries into Australia were high thus discouraging the importation of cars from other countries into Australia as they more expensive comparative to the vehicles manufactured locally. This led to the locals preferring to source the vehicles locally at a cheaper price as opposed to importing the same vehicle at higher price. This could only lead to expansion of the local automotive industry thanks to the tariffs that had been imposed by the Australian government. The Australian government also subsidized locally produced cars and their components hence making them affordable to the locals. This policy gave the local manufacturers a competitive edge over their competitors. Besides having an added advantage to their competitors, the local manufacturers’ vehicles experienced an increase in the sales of their cars which prompted them to increase the number of employees in their assembly firms. This led to a cyclical effect of some kind, that is, by employing more people in the automobile industry and hence more people became economically empowered. These were the same people who provided market for the vehicles that they were manufacturing and hence there was an expansion of the Australian economy as a whole 2 . However, the liberalization of trade led to the vulnerability of the local automotive industry to competition from imported vehicles. The liberalization of tariff and n