One more manufacturer gone by 2020?

Automotive manufacturing will be the sector of industry struggling hardest in 2020, according to a carbon price modelling report from the federal Treasury.

The report, released by Treasury late last month, is an update now based on carbon pricing of $23 a tonne. In a table on page eight, a table calculates the slump in output from the automotive manufacturing sector in Australia to be 39 per cent, come 2020.

That percentage is for the total industry, including component makers as well as the three vehicle manufacturers, so a slump of over a third doesn't necessarily mean Ford, Holden or Toyota will sell up its manufacturing assets and turn to full-line importation, but nor does it look especially positive.

At the very least a number of component makers (both OE and aftermarket) are expected to be numbered within that 39 per cent set.

Curiously though, the federal government department predicts the output of the local automotive manufacturing industry picking up 25 per cent by 2050. That's 25 per cent beyond 2010 levels, versus 39 per cent below 2010 levels in 2020. So a big dip in manufacturing output by the end of this decade will be followed by a smaller rise in output over the following 30 years — both changes relative to last year's output.

To put the automotive manufacturing sector's prospects in context however, agriculture will grow by 12 per cent as at 2020 and a whopping 131 per cent by 2050. Mining output is predicted to rise 77 per cent by 2020 and an even more amazing 201 per cent by 2050. Manufacturing as a whole — held back by the automotive sector — will still grow five per cent by 2020 and 69 per cent by 2050. Construction will be up 51 per cent by 2020 and 195 per cent by 2050; services will show improvement of 38 per cent by 2020 and 242 per cent by 2050.

In the manufacturing class, categories other than automotive include: textiles, clothing and footwear; paper products; refinery; chemicals; rubber and plastic products; cement; iron and steel.

Asked by motoring.com.au to respond to the implications of the report, Holden's Director of External Communications, Emily Perry offered a statement as follows:

"We've sought clarification on the Treasury modelling data and assumptions behind the projected impact of the carbon pricing in the 2010-2020 and 2020-2050 time frames.

"Without this information we can't really comment on their predictions in any detail. The position of the local manufacturers has been communicated by the FCAI. The FCAI modelling shows pricing carbon would negatively impact local manufacturers to the tune of around $30 million a year.

"We've also continued to highlight the need for Australia to be an attractive place to invest over the long-term. And for Australia to provide adequate co-investment support to ensure we retain our high-tech auto manufacturing industry so we can compete on a level playing field with our countries that also have this capability."

All three manufacturers were asked to comment on the treasury modelling. Toyota directed motoring.com.au to the FCAI for a response, but neither the FCAI nor Ford provided an official statement prior to the deadline for publication of this article.

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