Bracks releases car industry reports

Australian car makers could be encouraged to further develop their large-vehicle niche in order to survive, the head of an industry review says.

But they should be looking to innovative technology to produce cars with lower emissions, lower weight and improved fuel economy, using alternative fuels, former Victorian premier Steve Bracks said on Monday.

Releasing two preliminary reports on a review of Australia's automotive industry, Mr Bracks said challenges facing the industry include the rising Australian dollar, overseas competition, a reliance on exporting, environmental concerns and running costs.

But it would be wrong, he said, to assume his final report would call for more assistance to the industry. "That is an open question which will need to be determined by the evidence," he said. 

The federal government has asked the review panel to examine, among other things, how it can best apply its $500 million green car fund to the industry from 2010 onwards.

"It would be very difficult to simply replicate and compete with another country that's already built a small-car platform and has sunk that investment and are having a return on their investment already," Mr Bracks said.

"In essence, we need to look at the niche, what is Australia good at?"

Despite a trend toward small cars, Mr Bracks said there would remain a demand for large vehicles and Australia already had that niche.

"There's always going to be a demand for large cars, around the world," Mr Bracks said.

"There is the potential to look at larger cars having low emissions and having more sustainability as a result and there will be demand for that.

"We need to look at issues such as innovation in less weight on cars, innovation in lower emissions in better technology, whether that's transmission systems or looking at better fuel economy and alternative fuels of course."

The Australian industry employs 61,000 people and earns an export income of $4.7 billion, Mr Bracks said.

On Monday he called for public submissions to the review. The final report is due be presented to the government on July 31.

Among the questions in the preliminary reports is whether the Australian automotive industry is sustainable in the long term.

Mr Bracks said the industry had met challenges in the past and he believed a growth in exports would help it in the future.

The automotive industry has praised two federal government-funded discussion papers that suggest hope is not lost for the struggling sector.

Federal Chamber of Automotive Industries chief executive Andrew McKellar said the manufacture of cars brought more benefits than were immediately obvious.

"We think that this review provided an important opportunity for us to assess the contribution that the automotive industry makes to the Australian economy," Mr McKellar told reporters in Canberra.

"The automotive industry does make a significant contribution to the Australian economy.

"It's a major source of research and development, design and engineering expertise (and) it is a major exporter.

"It is also a significant employer and a major investment, in terms of capital equipment, in the economy."

The automotive industry was dealt a major blow earlier this year when Mitsubishi decided to shut its Adelaide plant and retrench almost 1000 workers.

Source: AAP 2008

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