Grant, distinguished guests, ladies and gentlemen.
Good morning and thank you for the introduction, and the very kind invitation to be with you in Queensland this morning.
I'm very happy to be at this beautiful facility and, at least for ashort while, to be away from the cooler winter temperatures of my homestate.
Clearly this is an extraordinary time for our great Australian automotive manufacturing industry.
There are milestones clearly worthy of considerable pride and celebration.
But, as always, there are challenges that will continually test us aswe seek to position our relatively small industry within a dynamic andchanging global automotive industry.
This morning, in addition to reviewing our industry successes, Ialso want to emphasise the need to confront the challenges we face, andto confront these challenges with the same determination we have inprevious years.
It wouldn't be the automotive industry - an industry we all feel too passionately about - if it was to be any different.
Let me start by reminding you of where we stand as an industry.
Our new vehicle market has never been so strong.
We are clearly on the cusp of a one million unit market for thefirst time in our history with 499,000 new vehicles sold in the firstsix months of the year.
One million sales would represent a sensational achievement for ourindustry, an achievement that all the component suppliers, serviceproviders, vehicle producers, dealers, and policy makers should takegreat pride in.
A one million unit industry would defy our wildest dreams of only a few years ago.
This would represent the fifth consecutive year-over-year improvement in new vehicle sales and the fourth record in a row.
It has taken many years for the ingredients to be right to support such strong levels of new vehicle sales.
We had to show the skill, passion and determination to produce innovative, world-class and high value new vehicles.
We had to have the confidence to place our new vehicles alongside the very best from a host of other source countries.
You all know the statistics; more than 50 different brands and 350 different models from 20 different source countries.
And, importantly, we had to have the right public policy and economic environments.
That's why it was so appropriate at the FCAI's Annual Dinner earlierthis year that we acknowledged the leadership contribution of threeformer Ministers, John Button, John Moore andTim Fischer.
Each of the three Ministers representing three different political parties were great champions of the automotive industry.
When we reflect with pride on our record sales, record exports,record quality standards, record new investments and great newproducts, we owe a considerable gratitude to the leadership of theseMinisters.
We should, of course, also acknowledge some of our more recentMinisters - Nick Minchin, Ian Macfarlane and Mark Vaile, to name three.
Each of these Ministers has over the years given us the confidence, and backing, to tackle the many challenges before us.
Of course, looking forward, we can all think of the many challenges that lie ahead.
On top of those we can think of, we can also be sure that differentchallenges, challenges we are unaware of today will also emerge.
This is all part of doing business in a modern, globally integrated and highly competitive economy.
This morning, I would like to focus on the outlook for the Australian manufacturing industry.
Upfront, I'll declare my allegiance. I'm an optimist.
The challenges we face now are in many ways no more complex than those faced through the eighties and nineties.
We all had doubts as to whether we could successfully compete in the absence of high tariffs and import quotas.
We didn't particularly want to compete against a wide range of imported products.
And we didn't particularly want our customers to have too much knowledge or too much choice.
Well, we can dream about yesterday as much as we want.
Those so-called comfortable days are not going to return.
The business world has changed.
It has moved on.
The economy won't be going back, and as an industry we won't be either.
The challenge we all face now is to ensure we remain absolutely focused on our customers.
We have to exceed their expectations, and we have to demonstrate apreparedness to seek out new opportunities with exciting product thatwill compete in an increasingly globally influenced environment.
As I indicated to this forum last year, trade policy will continueto play an important role in determining the future shape of ourindustry.
New trade agreements will continue to sharpen the competitivepressures at home, and will also open up potentially new opportunitiesin the rapidly growing markets of Asia Pacific.
As Grant mentioned in his opening comments, in addition to NewZealand and Singapore, we now have new free trade agreements with theUnited States, and Thailand.
And we have commenced formal negotiations with Malaysia, China, ASEAN and the United Arab Emirates.
Beyond the traditional tariffs and import quota arrangements thatare usually dealt with by trade negotiators, it has become criticallyimportant that the current round of FTA negotiations also focus on theissue of non-tariff barriers.
Whether it be discriminatory and punitive taxation arrangements,shortcomings in intellectual property protection, complex local contentarrangements or unique national standards, they all must be addressed.
Otherwise, any results gained from the trade negotiations will belargely academic, despite our industry's proud record of determination,innovative design and flexible and cost effective manufacturing.
One of the most important issues will be the protection of Intellectual Property.
This will be a critical issue for all Australian automotive industry participants as we move forward.
Firstly, it is imperative that we all have ready access to the verylatest technologies, either our own or through very effective licensingagreements.
These technologies will underpin the competitiveness of our vehicles and our manufacturing processes.
Secondly, it is imperative that those technologies, and the competitive advantages they bring, are well protected.
If they are not protected, they'll be quickly copied. And if they're regularly copied it will undermine our competitiveness.
This means industry participants will understandably not have the confidence to invest and seek out new technologies.
That's why the issue of intellectual property is so important in the trade negotiating arena.
Our industry has supported the Government's trade objectives, andacknowledges the complementary role that free trade agreements can playin facilitating the achievement of economic growth and, of course,broader multi-lateral trading objectives.
We will continue to give our support because we believe it is theright thing for Australia in general and the automotive industry inparticular.
That doesn't mean to say that these new trade agreements areunlikely to result in some further competitive challenges for ourindustry.
Far from it.
But even without the free trade agreements, does anyone seriously believe the competitive challenges we face would evaporate?
Does anyone really believe the China challenge will conveniently go away if a formal trade agreement is not concluded?
Of course not.
We cannot expect to defy gravity, or to be able to successfully ignore the obvious.
Rather, we have to find innovative ways of stepping up to the challenges.
It can be via the technology route I mentioned earlier ---- or
It can be via innovative and fast to market products.
In all cases, however, we all must ensure our respective businesses are very well managed.
The penalty for poor management in the present environment is quite severe.
The FAPM recognises this fact and this Convention has a long list of critical topics to assist in building a stronger business.
Topics ranging from :
improving relationships in the supply chain;
management toolbox for China;
success through collaborative innovation;
benchmarking continuous improvement, and;
prospect for growth in Asian markets.
All will assist you in strengthening your business.
As far as the four vehicle manufacturers in Australia go, each of us has a very different business model.
Each model reflects the core strategies and strengths of the respective manufacturer.
The success of the automotive manufacturing base in Australia indicates these different approaches can be successful.
But fundamental to the ongoing success of each company will be itsability to offer high quality, high value and high performing products.
There is no choice here given that our marketplace is crowded with avast array of imported brands and models from a host of differentcountries.
We are a contemporary global market, and that means each of us has aresponsibility to ensure our domestic vehicles are among the very best.
In the main, the four vehicle manufacturers will continue to achieve this in partnership with a strong domestic supply base.
This means a continued strong focus on quality, timely,uninterrupted delivery, competitive cost, and of course an ability toinnovate.
I acknowledge sourcing patterns have been a topic of recent discussion for some.
All things equal, I'd buy local any day. And I'm sure my colleagues would do the same.
However, from time to time, all things may not be equal, and there may be change.
Some components or services may be resourced to alternative domesticsuppliers, or in some cases, alternative suppliers outside Australia.
But in recent times, we have also seen our broader industry benefit immensely from many new investments in Australia.
GM-Holden has built a new V6 engine plant in Melbourne; Ford haslaunched the award-winning Ford Territory - which I might add, isdirectly substituting for what would have been imported growth.
Toyota has built a new R & D Centre in Melbourne, and Mitsubishi will soon launch its new 380 model.
I don't know anyone who would not acknowledge these examples as significant votes of confidence in our domestic industry.
To me, the clear message here is that we in the Australian industrymust always do everything we can to protect and enhance thecompetitiveness of our products and services.
We must ensure our vehicles, and therefore our components and systems, are among the very best.
We cannot afford any other option because to do so would risk the business of everyone in this room.
We've all shown we can produce great product.
We must all ensure we continue to do so.
Thank you - and I would now be happy to accept any questions from the floor.