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NEWS
Productivity Commission misses aftermarket exit strategy
Charity by name, not by nature: AAAA chief dismisses position paper as 'superficial' and 'aggressively negative'Stuart Charity, the executive director of the Australian Automotive Aftermarket Association (AAAA), has fired off both barrels, point blank, in the direction of the Productivity Commission and its position paper released last week.
“Once again, the opportunities in the innovative and growing independent aftermarket sector were given only superficial consideration, including the robust $ 5.2 billion a year aftermarket manufacturing segment that employs 21,000 people and earns $800 million a year in export sales,” Charity was quoted saying in press release issued yesterday.
“These 260 parts and accessories manufacturers operate across Australia in metropolitan and regional centres. They produce over 36 per cent of all Australian automotive output, yet receive no government industry assistance and minimal export support, and they are not constrained by inflexible union driven enterprise agreements.
“It is time for government to understand that these businesses are expanding through high technology innovation with exports to Asia, Europe, Middle East and the USA.
“The AAAA submission to the Productivity Commission highlighted that recent Government policy actually had negative impact on the aftermarket. We submitted that effective policy specific to the aftermarket could facilitate an immediate additional $1.36 billion value to make it a $6.56 billion sector.”
The AAAA's statement was issued just days after a similar assault from the FCAI, the peak body representing car companies... including those manufacturing cars locally.
According to Charity (pictured here in happier times), as vehicle manufacturing winds down in Australia, the members of the AAAA could pick up some of the excess capacity from original equipment parts suppliers to those car manufacturers... with the right government policy in place.
“If the full growth potential of the aftermarket segment is realised, it can absorb some of the excess capacity, skills and knowledge that become available as the decline of local vehicle production plays out.
“The aftermarket segment has performed successfully under intense import pressure. Aftermarket manufacturers have been forced to move up the value chain, from service parts to high value specialty products with a technological advantage.
“This competition has created an Australian aftermarket manufacturing industry that has the right pre-conditions to be a globally competitive sector. These businesses have been successful because they made significant investments in R&D and capital, and have strong export focus.
“We need policy that promotes such investment, but at present we have an environment of disincentive. Holden’s announcement in December to cease production in Australia only adds weight to the urgency for the component industry to transition away from the vehicle maker supply chain to more sustainable sectors,” he said.
If Charity was unremittingly critical of the position paper, he reserved particularly stinging words for the Abbott government.
“The AAAA believes that Australian manufacturing industry as a whole desperately needs visionary policy settings from this Federal Government. We don’t need more inquiries or lectures about ‘entitlement,” he said.
“We do need long term policy based on independent research and advice that is designed to foster economic growth across a range of industries. We need trade agreements that deliver fair outcomes for consumers as well as Australian manufacturers.
“Such policy will enhance Australian manufacturing competitiveness and innovation, and will facilitate access to new export markets with real and sustainable growth prospects” Charity concluded.
The AAAA is the organisation representing replacement parts suppliers (including local manufacturers of parts) – an industry worth $34 billion and employing over 30,000 staff. Exports from Australia by the 1700 member companies are worth $800 million a year, the association estimates.
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