Automotive Industry Change
A Blueprint for the Future
In November 2008 the Australian Federal Government announced a raft of new measures that are designed to support Australian car manufacturers. These measures will significantly stimulate the $7.7 billion car manufacturing sector and it’s worth exploring what they mean for the Aussie vehicle industry.
Prime Minister Kevin Rudd’s $6.2 billion, 10-year plan to make the automotive industry more economically and environmentally sustainable is a critical scheme for the success of the Australian economy, given the car manufacturing sector employs more than 60,000 Australians. It is also essential to the national research and development capability, and to maintaining export volumes.
Australia is one of only 15 countries in the world that can build a car from scratch to finish, a statistic the government is well aware of and at pains to support.
About the scheme
The centrepiece of the new scheme, known as The Green Car Plan, is a $1.3 billion Green Car Innovation Fund. The fund will provide Australian car companies with the opportunity to receive government funding to design and sell environmentally-friendly cars. It will match industry investment in green cars on a one dollar to three dollar basis over a ten year period from 2009.
On top of the Innovation Fund, the 13-year New Car Plan for a Greener Future is designed to support the manufacture of internationally-competitive, low-emission, fuel-efficient vehicles.
The scheme is expected to generate $16 billion in investment in the Australian automotive industry over its life. It also includes a $3.4 billion assistance program called the Automotive Transformation Scheme, which will run from 2011 to 2020 and which is designed to drive change in the Aussie automotive sector.
Also included in the government’s plan is a $79.6 million investment in the Automotive Competitiveness and Investment Scheme. Another $116.3 million has also been set aside to promote structural industry adjustment by encouraging consolidation of companies in the components sector and to facilitate labour market adjustment.
The scheme also includes $20 million to help automotive suppliers improve their capabilities and their integration in complex national and global supply chains and $6.3 million to help Australian car manufacturers access international markets. It also includes funds for a new Automotive Industry Innovation Council, which will bring key decision makers together to drive innovation and reform.
Under the plan, which implements the recommendations of former Victorian Premier Steve Bracks’ Review of the Automotive Industry, automotive tariffs will be cut to five per cent, giving Australia the third-lowest tariff regime among developed economies. And, although the plan includes a level of tariff support at the start, by 2020 all tariffs should be removed.
“The plan is designed to attract new investment in long-term, sustainable vehicle production, make the industry more environmentally-friendly and improve fuel efficiency and reduce carbon emissions,” says Andy Mulcaster, CEO, SG Fleet Australia.
“It will strengthen the local supply chain, boost skills and provide links to international markets. It’s a great initiative by the government that should arrest the decline in the local car making industry, and the government should be congratulated,” he says.
The New Car Plan also gives the local car industry the investment assurance it needs for the future, which is particularly critical in light of challenging economic conditions around the globe.
For more information contact:
Carolyn Taylor
(02) 9494 1000
ctaylor@sgfleet.com
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