Australia’s gross domestic product would be $7.3 billion smaller by 2018 – or about 0.6 per cent – if local car manufacturing shuts in coming years, says a study commissioned by the Federal Chamber of Automotive Industries.

The study by the Allen Consulting group, which will form the backbone of FCAI’s arguments for continued taxpayer support for the car industry, argues the economies of Adelaide and Melbourne would be “devastated" by the closure of auto manufacturing.