SYDNEY — GM Holden blamed Japanese monetary policy Tuesday for lagging car sales that have forced it to axe 500 jobs in Australia, with the plunging yen driving Japanese export costs down.

Holden Australia's chief Mike Devereux said the yen had depreciated about 25% since October as the Bank of Japan renewed its assault on the deflation that has plagued the world's third-largest economy for years.

"That means a car that was $20,000 five months ago costs around $15,000 to bring into the country, so there's a lot of price competition," Devereux told ABC radio.

The weaker yen – U.S. $1 currently fetches 99.35 of the Japanese unit -- gives Japanese automakers an edge in export markets, particularly in Australia where the local dollar continues to run strongly against the greenback.

The BoJ said it would double the money supply and aggressively increase asset purchases in its first meeting under new governor Haruhiko Kuroda last Thursday, sending the yen tumbling 6% against the dollar.

Devereux said government assistance "comes in many forms" and "in Japan's case they will viciously protect their auto industry."

The small car segment in Australia was the hardest hit, he added, with Holden's Cruze model struggling against rival Japanese makes. Slumping demand for the Cruze was one of the major factors in the job losses unveiled Monday.

"That's pretty much where we're getting hurt the most by what the Bank of Japan is doing and frankly what Prime Minister (Shinzo) Abe has said in response to calls to Japanese car makers to weaken their currency," said Devereux.

"We'd love to be selling more Cruzes -- we think it's a fantastic car -- but we can't chase the price down to counteract what the Bank of Japan is doing."

Japan's three biggest automakers -- Toyota (IW 1000/8), Nissan (IW 1000/26) and Honda (IW 1000/30) -- in January posted record sales for 2012, underscoring the trio's recovery after the quake-tsunami disaster in 2011 devastated sales and production.

Holden, a General Motors (IW 500/4) subsidiary which employs some 4,000 people in Australia, last year slashed its workforce by about 170, again citing a strong Australian dollar and slow car sales.

Canberra extended a Aus. $3.2 billion (U.S. $3.3 billion) bailout to the ailing auto industry at the height of the global downturn and stepped in with additional lifelines to Ford and Holden in early 2012.

Copyright Agence France-Presse, 2013