Industry Policy
In 2008, the Australian Government completed a comprehensive “Review of Australia’s Automotive Industry” which sought to ensure a globally integrated and sustainable Australian industry. The industry continues to form the core of Australia’s manufacturing sector and accounts for approximately six per cent of the total value added manufacturing, and almost one per cent of Australia’s gross domestic product.
The Review provided an opportunity to also address the impact of the global financial crisis which exacerbated the ongoing challenges faced by the industry, in particular, access to investment funds and shifting patterns of consumer demand.
In this challenging environment the supportive underpinnings of key industry policies have assumed even greater significance. The formation of a new industry program, the Automotive Transition Scheme (ATS), will provide $2.5 billion in capped support for research, development, design and exports of vehicles until 2020.
Perhaps the most significant challenge facing the industry is in responding to the growing demand for lower carbon emission vehicles. This requires significant investment in research and development as well as large investments in design, engineering and facilities.
The establishment of the Green Car Innovation Fund (GCIF) provides significant assistance to the Australian industry in attracting the necessary investment required to transition to more fuel efficient and lower carbon intensive vehicles. The GCIF will contribute to investments which seek to develop and commercialise technologies that significantly reduce fuel consumption and greenhouse gas emissions in Australian manufactured vehicles.
Looking ahead the Australian vehicle and component manufacturers will also need to accommodate the impact of the proposed Emissions Trading Scheme. Australia’s major automotive trading nations including Japan, Thailand and Korea do not incur a similar carbon price on manufacturing. Without an equivalent carbon cost impacting upon manufacturing amongst our major trading partners a method of offsetting this cost will be essential to maintain the competitiveness of manufacturing in Australia.