General Motors has confirmed it will stop making cars in Australia by 2017 due to high costs, which could mean its rival, Toyota Motors, could do the same next, according to Reuters.

The automaker's decision to close its Holden plants in South Australia and Victoria is just the latest setback to Australia's manufacturing and auto industry.

"No matter which way we apply the numbers, our long term business case to make and assemble cars in this country is simply not viable," General Manager Mike Devereux said to reporters this week, according to Reuters.

The decision to stop production of Holden vehicles will put more pressure on Prime Minister Tony Abbott's conservative government, which is currently trying to handle a slowdown in the $1.5 trillion economy.

Back in May, Ford said it would shut its two Australian auto plants by October 2016, crediting similar issues and circumstances.

There have been concerns that an exit by GM would mean Toyota would leave next, threatening around 150 parts and component suppliers which employs over 40,000 people, according to Reuters.

"You need two manufacturers to get that critical mass," said influential independent Senator Nick Xenophon. "You lose that critical mass, they fall like dominos."

Australian Manufacturing Workers Union national vehicles division secretary Dave Smith said it was "almost certain" Toyota will leave next. 

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