General Motors’ Australian unit Holden has welcomed the release of the federal government’s review of the Australian automotive industry but questioned whether proposed initiatives could offset the impact of further tariff reductions.
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Managing director Mark Reuss said the report appeared to offer possibilities to actively encourage innovation and investment by manufacturers and suppliers to grow their operations in Australia.
But he said there was concern within GM Holden, and parent company General Motors, that reducing the tariff from 10% to 5% in 2010 would outweigh the benefits of new programmes suggested in the review.
“This is a well considered report and we will need time to determine the impact of these recommendations, should they be adopted by the federal government,” Reuss said.
“Holden is developing and adopting more fuel and environmental technologies than at any other time. It is an exciting transition for our business and the industry, as we push for more Australian cars using Australian energy rather than foreign oil.
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By GlobalData“To achieve that transition, it is vital that the Government creates a framework making further investment in Australia attractive to our parent company which in turn increases our ability to build capacity and capability.
“We applaud the panel in recommending longer term transitional arrangements, but cutting tariffs would fundamentally erode our ability to compete against other nations for future investment.
“Australia currently has one of the lowest tariffs of any automotive producing country so the playing field is already not level.
“We certainly welcome the thoroughness of the report, which has some innovative ideas to ensure Australia continues to have an automotive industry.”
The Australian Associated Press said the Australian car manufacturing industry employs 66,000 people who pump A$4bn into the national economy.
The industry competes with manufacturers from Brazil and China, whose import tariffs were as high as 35%.
“Australia at 10% makes it tougher for local manufacturers in competing and drawing innovation and new technology to Australia,” Reuss told the news agency.
GM Holden competes with Toyota (now Australia’s largest automaker and exporter) and Ford which hopes to make the country an export base for its next-generation Focus.
After years of decline, Mitsubishi, which took over Chrysler Australia facilities in 1981, finally stopped local manufacturing last March.
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