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New era for FCAI
Incoming CEO Andrew McKellar faces the burning issues facing Aussie auto sector
25 May 2007
By ANDREW ELLIS
INCUMBENT Federal Chamber of Automotive Industries (FCAI) chief executive Andrew McKellar faces a number of difficult challenges when he begins his new post on June 1, despite new-vehicle sales being widely tipped to top the magical million mark for the first time this year.
Replacing long-serving CEO Peter Sturrock as the head of Australia’s peak motoring industry body, Mr McKellar last week listed an upcoming automotive industry review, which will include a critical examination of proposed tariff reductions, as a key priority.
Other challenges Mr McKellar must face include growing discontent from some commentators about ongoing levels of government support for a manufacturing industry providing vehicles in a dwindling sector.
There is also increased demand from government and non-government organisations for the automotive industry to become cleaner and greener, and anxiety from some importers over a perceived lack of urgency on new fuel standards that would give Australian customers access to new, high-technology engines.
New Free Trade Agreement (FTA) discussions, involving the burgeoning industries in China and ASEAN, are also looming.
“We need to present a strong, clearly articulated argument to the government to maintain the levels of investment in the local industry,” Mr McKellar said.
“The policy environment is much more challenging today than when the last review was undertaken in 2002, and includes issues such as the increasing importance of environmental issues and discussions on FTAs with countries such as China.
“It’s critical we work in alignment with state governments as well to maintain a consistent approach to issues confronting the automotive industry,” he said.
Currently the FCAI’s government policy director, Mr McKellar said he did not foresee any issues with the prospect of working with a Federal Labor government led by Kevin Rudd.
Andrew McKellar (left) and Peter Sturrock.
“I’ve met with Opposition deputy leader Julia Gillard to discuss the ALP’s industrial relations policy and it’s our opinion they don’t fundamentally undermine the current arrangement,” he said.
“The crucial issue for the local automotive manufacturers is a security of parts supply, and to minimise the risk of disruption further down the line.
“It’s imperative we maintain a mechanism for a quick resolution of any potential risk to supplying parts.”
Mr McKellar said he also welcomed the recent announcement by Mr Rudd for a $500 million “green car” plan.
However, Mr McKellar hinted the FCAI would take a strong line in any government discussions over proposed FTAs with China and ASEAN.
“If TAFTA (Thailand-Australia Free Trade Agreement) was put up as the ASEAN FTA, we wouldn’t support it,” he said.
Mr McKellar argued that while importers with Thai plants had benefited from the agreement, excises on car size under TAFTA had hindered reciprocity. While some importers had benefited greatly from sourcing product manufactured in Thai-based plants, the acceptance of Australian vehicles in Bangkok had been almost zero, he said.
Crippling excises on vehicles exported to Thailand, such as the Ford Territory SUV, had resulted in sales that could be counted on one hand.
“We will have to address those issues when we’re looking at an ASEAN FTA,” he said.
Mr McKellar was more cautious when questioned on the possibility of following the US in regulating mandatory stability control in locally produced cars.
“Our view is that regulation is not the correct approach. Indeed, Australia is on track to voluntarily achieve the targets mandated in the US.”
He explained Australia was party to the United Nations Economic Commission for Europe (UNECE) and its harmonisation of vehicle regulations.
“It’s not like the early days of Australian design regulations when there was no leadership on issues such as seatbelts,” he said.
“There is an international regime in place now, and this is another example of maintaining a consistent approach rather than have state-by-state approaches.”
Mr McKellar, 40, joined the FCAI five years ago. His curriculum vitae boasts policy experience in government, including serving as a senior adviser for two successive Federal industry ministers. He has also worked in the private sector with the Australian Industry Group and PriceWaterhouseCoopers.
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