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Car manufacturing gets tough for Australia -

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(generated from captions) is now talking about an issue that once would have

taboo. Of all the cars sold in

Australia in the past year Australia in the past year just

under 1 in 5 were under 1 in 5 were Australian made. The Government's trying

to keep the industry viable to keep the industry viable and pumped almost $750 million pumped almost $750 million into it last year. Australia has it last year. Australia has 3 multinational car manufacturers but there are but there are real questions about how long they can keep

designing cars for the local market or whether they might abandon it all together. abandon it all together. Greg Hoy reports. Want car, then come to Australia.

With tiny tariffs and a

sky-high dollar there's now 65 brands to choose from here as a

posed to just 35 in the US.

Australia is actually one of

the most open markets on the

entire planet. And last year 81% of Australians chose imported

imported cars over bigger and

thirstier home grown passenger vehicles. Regardless, taxpayers

subsidised the car industry to

the tune of $721 million

raising an obvious question. Can the Australian economy survive without a

domestic car industry? I whilst there's a mining whilst there's a mining boom

the answer is clearly yes but,

you know, there will come a

time when that tide will

turn. Well, my attitude is it's not particularly important,

that sounds like a terribly hard-hearted thing to say. Dr

Nicholas Gruen was a key player in the radical reorganisation of the

car plan. We should be making

jobs in the car industry as

productive as other jobs or get rid of it. This get rid of it. This country is

1 of only 13 in the entire

world that has the capability

to not only design but engineer

and manufacture vehicles and it's a very sought after

capability and it's one I think the country should fight

for. Spinning the wheels of the

economy but for all 60,000 jobs

and high-tech skills it produces with assistance there's another big

question hanging over the Australian car industry. Can

we assume the

we assume the 3 manufacturers still standing will survive? I

don't think you can ever assume

that. I certainly think that every effort will be made every effort will be made to make sure that happens. But one

of the problems we do have in

our car industry is that we

don't own it. No, we certainly shouldn't assume that. I shouldn't assume that. I think

it's quite likely that Ford

will not be here in 10 years time. It's the biggest car

race. Once upon a race. Once upon a time Australia had 7 car manufacturers sharing manufacturers sharing 80% of

car sales protected by 57%

tariffs on imports. tariffs on imports. Today

tariffs are 5% and local

products of Toyota, Holden and

Ford must fight it out for just 19% of local sales or less. So

who is most vulnerable? All 3

car makers are doing it tough.

Production down, profits once

taxpayer funding is deducted,

are neg negligible. Holden has

been doing its best to hose

down engineers claims but the

next all Australian next all Australian Commodore

will be the last to be designed

here. The notion of here. The notion of engineering

a Commodore in this country or

in another place certainly is a

competitive thing that we

wouldn't disclose at this point

in time. But why deny in time. But why deny that you're planning to switch to a global

accepted view throughout the

industry? The world has changed

over the last decade or so and generally is moving towards global platforms. Whether that happens to be the case in this

country decisions have not country decisions have not been made. Making 66,000 Commodores

last year, a third for export

including police cars for the US, Holden's production US, Holden's production five

years ago was double years ago was double that. Holden has, however, heavily invested to begin invested to begin building alongside alongside its big and thirstyier Commodores the

popular and previously imported compact car, compact car, the Chevrolet

Cruze. We have a plant that supreme flexibility. We are

able to then adjust what we

build, the big one or the small

one, and then our ability to

opportunistically go after the export markets when they

present themselves to us. And with alternative fuel with alternative fuel versions

available, analysts approve

Holden's strategy. The same for Toyota which last year made 120,000-odd Camries and Orions,

two thirds for export, down two thirds for export, down by

a quarter on five years ago but well positioned for growth when the global economy

recovers. For every Camry recovers. For every Camry and

Orion they sold in Australia

that they made in Australia,

they were selling another 2 they were selling another 2 in the Middle East. That the Middle East. That was a huge achievement. And that

brings us to Ford. Unavailable

for interview to discuss its future. It is Ford's future in

Australia that most concerns

the analysts. Gee, you know,

getting down to, I would have

thought, some of the dangerous territory in terms territory in terms of low volumes. Production of Ford's

big flagship, the Australian-designed Falcon,

fell to 44,000 vehicles last

year, the Tuer Territory -

newer ter ter toir 13,000. Ford

is pinning hosts of a recovery

on the fuel savings of gas and diesel versions diesel versions of its large vehicles, or fitting the big

Falcon with a small engine. Analysts are underwhelmed. Ford

over the years should have done

a lot more on

and joined Toyota and Holden in

finding export markets. We

should be saying to Ford, as in my opinion we should have my opinion we should have said

some time ago, if you want to

get all this assistance that

we're handing out we want to

see some serious sign that this is developing a strategic

asset. Industry insiders

believe Ford will soon need to strategy in order to secure strategy in order to secure its manufacturing future here. And

that like Holden, this that like Holden, this time

that's unlikely to include an Australian

But the auto industry argues in

order to secure such investment further government funding further government funding will be required and not just for Ford. It's time to put together

a solid, credible proposal that

is competitive to the rest of the

the world if we want to ensure the survival of the automotive

sector into the decades to come. Some say with import competition only set to

increase and fuel prices sure

to rise as the world economy

recovers, Australia recovers, Australia should consider courting consider courting other car makers. I would have held makers. I would have held a beauty contest. I would have

said we want to have bids said we want to have bids from

that manufacturers, we want to hear what they're going to hear what they're going to do

with these assets to make them

really good, strategic parts of

the global automotive industry. We're going to see a

lot more Chinese into the

market here. We're going to market here. We're going to see their very rapidly. The Chinese will

certainly come in. We are a massive manufacturer in China

as well. So I wouldn't rule out at some future date General Motors' operations in China shipping something to

Australia. If that sounds Australia. If that sounds bleak for local manufacturing, for local manufacturing, there are rays of hope and inspiration on our own

doorstep. Despite fierce global competition the all-Australian engineered auto parts

manufacturer Futuris is flush

yiring in Thailand, France

and even North and even North America. We should double our revenue streams. This sector in streams. This sector in my mind

is a bit like New York. If you

can make it here you can make

it anywhere. It's all about