All Fords will now be imported, dealing a severe blow to the industry and the wider Australian manufacturing sector.
The company also announced an after-tax operating loss of A$141 million ($169 million) last year, bringing to about A$600 million its losses over the past five years.
Ford Australia chief executive Bob Graziano said yesterday the company had been left with no alternative. "Given the fragmented marketplace and the low model volumes that result, we decided that manufacturing locally is no longer viable."
The company has received more than A$1 billion in government aid since 2000. Even with continued subsidies, Mr Graziano said costs, twice those of Europe and four times those of Asia, the strong dollar and competition had forced Ford's hand.
New versions of the Falcon, Falcon Ute and Territory will be launched next year, and its big product development operations will remain.
The impact will be hard on Geelong, where Ford is a major employer for its population of 226,000.
Unions estimate that the direct loss of 500 jobs in Victoria's second-largest city will rise to about 2000 as the closure hits other suppliers.
The federal and state governments have promised help for sacked workers. "This is a very sad day for those workers and for their families," Prime Minister Julia Gillard said.
