The Australian automotive and motorcycle industry continues to be a vital and integral part of the national economy.
Consumer demand is at an all-time high with more than 1.2 million new vehicles and motor cycles sold every year.
For any industry to achieve these figures during times of relative economic uncertainty and transition, is impressive indeed; even more so, when you consider that we are facing a number of current and impending challenges.
For our industry to continue to thrive and expand, we need to respond rationally and objectively to these challenges.
It is incumbent upon us to ensure that we continue to engage with key stakeholders. We need to ensure that we have a strong and collective voice, a voice that appropriately influences the industry of the future.
This, of course is the role of the FCAI.
Two of the biggest issues that impact the industry are government policy and emerging technology. It is these issues that I would like to briefly address tonight.
Let me start with government policy.
The three major issues currently on the Federal Government’s policy agenda that impact our Industry are, vehicle emissions, personal imports and ADR harmonisation.
All three issues are complex and have wide ranging consequences that impact the entire industry.
In the area of vehicle emissions we have seen significant movement since our AGM last year.
At that time we intimated that we could expect greater Government focus on this issue in the ensuing year.
Indeed that proved prophetic, when in October 2015, the Federal government announced a Ministerial Forum on Vehicle Emissions.
The most pleasing aspect from the FCAI’s perspective, was that the Government adopted an approach long advocated by the Industry, that is, a ‘whole of government approach’.
The terms of reference comprehended the issues that we had been raising and have therefore formed the basis for a meaningful discussion.
Thus far there have been two Government initiated forums where the Industry, along with other stakeholders, have been afforded the opportunity to raise their respective issues.
These issues include, CO2 targets, Euro 6 introduction, fuel quality, driver behaviour, in service testing and Co-Operative Intelligent Transport Systems.
At the same time, we have been able to highlight the interrelationship of these issues in delivering real world environmental improvements.
Vehicle emission targets have been introduced in other parts of the world and will inevitably be set here.
The Australian automotive industry is committed to making a strong contribution to national efforts designed to reduce the impact of climate change. This is evidenced by our year on year reduction in CO2 emissions.
An important pre cursor to the debate is ensuring that policy makers genuinely understand the uniqueness of the Australian marketplace.
It is our role to educate and communicate, to ensure that we provide the right inputs, prior to final policy determination.
Issues such as the timeframes of our product cycles means that we cannot make immediate changes in response to new policies.
We need time to plan our next generation models, which in most cases is five to seven years or, longer again, for commercial vehicles.
There are also factors outside of our control, such as fuel quality and its linkages with in service performance, as well as buyer behaviour.
Although the industry cannot directly determine these factors, their impact can potentially negatively influence CO2 and noxious emissions.
On the positive side of the ledger, we also have the emergence of Co–Operative Intelligent Transport Systems, which offer the prospect of reducing fleet wide emissions. I’ll talk more about this shortly.
The second major item on the government policy agenda is the reform of the Motor Vehicle Standards Act.
The FCAI fully supports many of the recommendations wherein greater efficiencies can be derived, however, we cannot support the recommendation that proposes the introduction of personal new, or near new, imports.
The Industry is not ‘fear mongering’ when it says, Australians who personally import a vehicle from another country, may end up with a vehicle that does not meet their needs, or operate as required in Australian driving conditions.
The implications to Australian consumers are far reaching, as are those for Australian Dealers, who have invested heavily in their respective communities.
This is a very serious issue and the FCAI will continue to take an active role in these discussions. We must ensure that our concerns are clearly understood by government before any legislation is progressed.
The final policy issue relates to our Australian Design Rules – or ADRs.
As you know, we are part way through an industry-wide process to align ADRs with international standards.
Once completed this is expected to significantly cut administration costs and ensure that we can more readily access new technology already available overseas.
The FCAI’s role will be to accelerate the timing of this activity. This will enable the brands, and ultimately the customer, to reap the associated benefits at the earliest possible timing.
In addition to vehicle emissions, personal imports, and ADR harmonisation there are a number other issues before us.
These include access to service and repair information, genuine parts, and the Coronial inquest into quad bikes, among others.
As is evident there are clearly many policy issues impacting the industry. The FCAI will continue to play a key role in objectively informing the debate.
Of course, it is not just government policy that we need to be across. We need to ensure that we are at the forefront of discussions on a number of emerging issues impacting the industry.
The first relates to new technology.
As the global industry strives to reduce the environmental impact of their products, we are witnessing growth in alternate powertrains, whether they be hybrid, plug-in hybrid, electric or hydrogen fuel cell.
Now, while still relatively low in volume when considered as a percentage of total sales, the actual rate of adoption is showing a positive trend across the globe.
Governments around the world are promoting and supporting the uptake of these alternate powertrains. Many of these alternates are already available commercially, or are currently being trialled in Australia.
However, before these products can be adopted more widely by the Australian consumer, we need to have the relevant infrastructure, and, if international experience is to be taken as a guide, government support is required to encourage and support their establishment
This includes introducing regulations and other supportive policy so that manufacturers can introduce product to Australia, and infrastructure providers can establish and expand re-charging and other refuelling infrastructure.
Without these provisions, consumers will not be able to fully embrace this technology, and the benefits to both the consumer and the environment will not be realised.
Similarly, we also need to look more closely at autonomous vehicles and Co-Operative Intelligent Transport Systems or C-ITS.
This technology is being introduced globally and we have already seen small-scale trials in Western Australia and South Australia with heavy vehicle trials taking place in New South Wales.
While this activity clearly marks the start of an exciting new era, new regulations must be formulated before we can even begin to broadly adopt this technology.
In order for us to do this, we all need to work together so that we can have input into the frameworks required to support these exciting new products and their associated infrastructure.
These technologies have the potential to provide numerous benefits for Australian road users, businesses and society. These benefits manifest themselves in the area of safety, productivity and the environment.
The FCAI response
To ensure the industry has a consistent voice and that member’s views are represented, the FCAI is committed to taking the lead on these issues.
Our immediate priority is to continue active conversations with government about vehicle emissions and personal imports.
To further highlight the risks associated with personal imports, we will ensure our key messages are closely aligned with those of the AADA.
We also acknowledge that the FCAI needs to continue to raise its profile both with its key stakeholders and the general public.
Our work on these two issues will help us do this, however we can, and will, do more.
This includes engaging with government and opposition more frequently across a breadth of issues.
We need to further strengthen our relationship throughout government, and ensure that key policy makers are aware and informed of the issues impacting our entire industry.
The fact that we have had multiple leadership and ministerial changes over the past few years makes this line of conversation even more important.
To further enhance our effectiveness we have expanded two FCAI committees to include more brands. These are the Importers’ group, which will now be known as the Member’s Committee, and what was formerly known as the Government Policy Advisory Committee will be known as the Policy Advisory Committee.
This will ensure that the views of all members are well represented, thus ensuring that we have a multi-brand approach to all of our key issues.
Clearly there is a lot of work to be done over the next 12 months, however, I am confident that with all of your support we can achieve many positive outcomes for the industry, the consumer and the environment.