Heather Ridout, the Ai Group’s Chief Executive, describes the government’s new car plan as a strong package to drive the future of the automotive industry.
“It will be welcomed by the industry and will provide much needed support,” she said.
“It creates an opportunity for the industry to reinvent itself in a spirit of mutual obligation,” Ridout said.
“The package will enable the industry, as it transitions to lower levels of tariff assistance, to continue its important role in the manufacturing sector and in the broader economy including through its contributions to Australia’s business innovation system.
“The reciprocal commitments by the car and component companies to co-invest and to put in place green investment plans will ensure that the $6.2bn of industry assistance is associated with around $16bn in new investment by the industry itself.
“The Government has not only accepted the recommendations of the Bracks Review, but has acted sensibly in bringing forward its implementation and boosting funding for the Green Car Fund and the industry restructuring package.
“Implementation from the start of next year will help the industry to restructure operations for tougher times. With car sales down both in Australia and globally, reflecting the global credit crunch, weaker consumer confidence and the slowing in economic growth, the car plan will boost investment in the industry and help reposition Australia’s automotive sector into a new growth segment of the car market.
“The Government’s decision to reform the Automotive Competitiveness and Investment Scheme (ACIS), to be renamed the Automotive Transformation Scheme, to focus more on local innovation, design, exports and supply chain improvements, will also deliver better economic outcomes and inject much needed flexibility into the scheme. This is consistent with the position put forward by Ai Group in our submission to the Bracks review,” Ridout said.
“While the package announced will ensure that the three multinational car manufacturers can strengthen their operations in Australia, the industry recognises the need to make further improvements to productivity to remain globally competitive.
“A critical structural issue currently causing huge concern for the industry is how the industry is going to obtain secure sources of finance following the withdrawal of a number of financers from the Australian market. This issue needs to be resolved as a matter of urgency and will require close cooperation between Government and industry. We are encouraged by assurances that the Government understands that this issue is a priority,” Ridout said.