Government funding crucial to local car makers

The decision on who will lead the country is still in limbo, but the head of Holden, Mike Devereux (pictured), has questioned the announcement by both sides of federal politics that they will slash taxpayer assistance to the local automotive industry.

In the lead up to the election the Labor government quietly slashed $200 million from the Green Car Innovation Fund (GCIF), while the Liberal opposition proposed to remove a further $278 million from the scheme.

The original plan was to see $1 billion in government assistance spread over 10 years to help car makers and suppliers develop more fuel-efficient technology – and the government would contribute $1 for every $3 contributed by the grantee.

"I can't comment on why they have done that," Devereux said at the launch of the Series II Commodore in Melbourne this week. "I would like to see more applications being made for GCIF funds. The entire ecosystem of the supply community depends on it ... they need to get busy.

"In fact, we're going to be applying for more technologies to come into our future vehicles."

He said local car makers were not abusing the GCIF and pointed out that the new Commodore -- which can run on a blend of 85 per cent ethanol and 15 per cent unleaded petrol -- did not use GCIF money to develop its latest fuel-saving technology. "That was all our investment, the taxpayer did not pick up the tab on that."

Devereux was also asked to respond to last week's comments from the boss of Suzuki Australia, Tony Devers.

Devers questioned whether Australia needed an automotive manufacturing industry and accused local car makers of being out of touch -- even though Holden has built Australia's favourite car for the past 14 years and is on track to notch up a 15th straight win.

"I'm all for a strong industry. I agree we've got to maintain jobs, but at what cost? I just don't believe we can afford to prop it up to the extent that we are," Devers told the media last week.

"Look at what Nissan has done after they pulled out [of local manufacturing]. Nissan has become stronger, they have a better model range. Mitsubishi will do the same. There is an overriding idealism that we need an industry, but the facts indicate that we don't."

Devers also called for an urgent review into the level of government subsidies which, he said, unfairly advantaged the three local makers Holden, Ford and Toyota.

However, for the record, Suzuki receives assistance from governments in Japan and India for its manufacturing operations there -- and the Japanese car maker currently has a proposal with the Thailand Government to get a subsidy to build a new small car in that country.

Holden's Devereux initially declined to respond to the Suzuki Australia boss's comments, but later said: "Everybody is entitled to their opinion. But let me tell you, there isn't a place on the planet where a manufacturer of automobiles -- whether it's General Motors, Toyota, Mercedes-Benz, whoever -- that there isn't a public-private partnership to get massive, huge scale investments in a country.

"Nowhere on the planet does that happen, and it's happening here and I applaud the country for figuring out that a developed market needs to make things. You can't be an importer of everything that you do.

"You have to be able to make things, you have to have a basic research base in this country at the ... university level, for basic research in battery technologies, and biofuels, whatever it may be. That's what this country needs to stake its future on.

"I think the governments that get it -- whichever government that might be -- are governments that understand that's the way it is. You've got to make stuff.

"I don't want to comment on the political process but I think it is very good thing to support making things in Australia and having technology be something that Australia stakes its future on.

"We're not going to be the cheapest labour force on the planet, and we're not going to be the world's largest car market ... but you can be very green and very high tech."

Devereux said Australia was one of only seven countries that can design, engineer and build a vehicle -- and one of only three countries in the General Motors world that can design and build futuristic concept cars. Holden in Melbourne has made show cars for General Motors affiliates in China and Korea as well as North America, the most notable being the modern version of the Chevrolet Camaro.

The industry minister for the Victoria Government, Jacinta Allan, the Member for Bendigo East, said the automotive industry was responsible for 30,000 jobs in Victoria alone (61,000 nationally), and represented $3 billion in exports annually.

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