The Australian government’s approval for a summit mapping out the future of the car industry is not just a matter of more financial support, or a response to a call by South Australian MP Nick Champion to “impose tariffs”. The government knows that unless the local car industry implements global standards and practices, Ford’s closure will be the beginning of the end.
Most countries that build cars have mandated fuel efficiency and carbon emission targets for the purpose of making the car industry invest in fuel-efficient and alternative vehicles. This has created a global shift in the future of the car industry. Tony Weber of the Federal Chamber of Automotive Industry told The Australian Financial Review:
“Australia needs to beat down non tariff barriers across South-East Asia for the domestic car manufacturing to remain viable.”
But such charges are not “tariffs”. Countries like Thailand are imposing high excise taxes to discourage the acquisition of high-emitting vehicles. As a result, petrol guzzlers like the Ford Territory had a “retail price of $99,000, twice the Australian price”. But for a vehicle with emissions of no more than 120g of CO2/km, Thailand’s excise taxes would have been cut from 30% to 17%.
Opposition Leader Tony Abbott wants the Australian car industry to server the export market. To reach this target, it has no choice but to meet international global emissions or fuel efficiency standards.
The government will need to kick in some more cash to incentivise the industry. Industry Minister Greg Combet has pointed out Australia’s subsidies to its auto industry are among the lowest in the world: $18 per capita compared with $90 in Germany, $265 in the US and $334 in Sweden. This is true, but all those countries are investing in the most technologically advanced fuel efficient or alternative fuelled vehicles that will meet stringent mandatory emission targets.
Many of them are now competing to manufacture the most fuel-efficient car. Ford knows it, and is making great strides in efficiency — in other countries. For example, the Ford Focus was rated as the world’s best-selling car in 2012, and the multinational company is advertising that it offers “more choices of fuel efficient vehicles that any other car manufacturer, such as the 2013 Focus electric, 2013 Fusion hybrid, and the fully electric C-MAX Energi”.
GM Holden is also facing decline in new vehicle sales. In 2012, VFACTS recorded a decline of 7%, but in the month of December 2012 it recorded a fall of 25.3%, mostly from a 24.8% decline in Holden Commodore sales. Holden Cruze sales also fell 13.6%.
It is definitely time to call a “car summit”. If Australia is serious about manufacturing a car that can be exported overseas, it must raise its car emission and fuel efficiency standards to international levels or be left behind.
*Anna Mortimer is a lecturer in revenue law, income tax law and taxation planning at the Griffith Business School
Yes!
The Ford workers were in close down mode for the past decade while they continued to make the old gas guzzling models. No news there.
The interesting thing is that the 800 plus workers in their design team are remaining. Presumably they will be contributing to the team designing the Ford cars of the future. I thought this is what we should expect to happen: In a developed country with highly skilled workers the jobs move up from low to high skills and other developing countries get the low skill, soon to robotised, jobs.
To me the real question here is :what have Ford and the unions been doing for the past decades and what have they planned to do to increase the literacy, numeracy and skills of their production workforce? They should have been doing that anyway and not need taxpayers money when they have not invested in high tech facilities and staff.
I agree with this. I would also prohibit selling cars in Australia that can go faster than the highest speed limit.
Gavin, I’m not sure if that would have much of an impact on the road toll (assuming that’s your concern). Firstly, it would still allow people to potentially speed at up to 130km/hr through school crossing; these electonic limiters are easily able to be modified and there are already 20 million plus cars in Australia without such limits which will take time to age and die (and will be the usual only cars that the young and inexperienced can afford). Also, I believe NT are considering removing restrictions on their main highways again (currently at 130km/hr). Maybe we should all just putt around in golf karts wearing helmets and cotton ball suits?
Gavin, every car and motorbike and many scooters are capable of going faster than 110km/h! What a foolish thing to say.
I thought most deaths were on country roads, where ‘speed is a factor’, as the cops are often quoted as saying.
I wouldn’t accept limiters, precisely cos they can be readily circumvented. I mean prohibiting the sale of cars that have the capacity to go > 130 kph, even without a limiter.