Australia is best known for the production of large vehicles and is one of the most open automotive markets in the world. The industry plays a vital role in employment, exports and innovation in the Australian economy. It is a self-sustaining "full service" industry that handles the full range of activities from design to manufacturing of vehicles, although the industry is small by global standards (Singh, Smith and Sohal, 2004). The three main companies that dominate the industry in Australia are Toyota Motor Corporation Australia, Ford Motor Company of Australia and GM Holden. However, in recent years the industry has undergone significant structural reforms and these reforms have mainly focused on the removal of quotas and lowering of protection, which has led to some rationalization of the industry, made imports more accessible to consumers and thus made the market more accessible. the industry is more competitive internationally (Review of Australia's, 2008). As a result, Australia's automotive industry suffered when a wave of manufacturers including Ford, Holden and more recently Toyota ceased operations in the country. Comparative advantage is defined as the ability of a business entity, in this case, a country, to specialize. in products that it can produce relatively more efficiently than other countries (Krugman & Obstfeld, 2003, cited in Smit, 2010). It is therefore comparative advantage that will determine whether it is beneficial to produce a product or rather to simply import it (Jaravaza, Mzumara and Nyengerai, 2013). In the context of intense competition in the global market, the comparative advantage of a country's exports is the main influence on that country's export volume (Chunming & Wei, 2012). Australia lacks a medium of paper influencing investment decisions such as broad support for R&D, education and training (Allen Consulting Group [ACG], 2013). However, there is evidence that government support for the automotive industry has declined in Australia in recent years and the level of government support and policy certainty is not of a similar magnitude in Australia compared to other countries ( ACG, 2013). If globally competitive incentives are not provided, there is a greater risk that manufacturers will stop production. For example, the recent case where Abbott declared that it would no longer provide additional government aid, led to major manufacturers ceasing production one after another. The government proclaimed that "better governance does not equal more government" in light of government pressure to intervene in the industry (Baker, 2014).