Don't give in now, FCAI tells suppliers

GM HOLDEN chairman and Federal Chamber of Automotive Industries (FCAI) president Mark Reuss has urged the Australian components sector to look past the immediate challenges of survival in the current climate and consider “a long-term future of shared success” on the back of the federal government’s $6.2 billion car plan.

Addressing the FCAI’s 2008 Supplier of the Year awards last Wednesday, after holding high-level talks with the Federation of Automotive Products Manufacturers (FAPM) and representatives of fellow local manufacturers Ford and Toyota, Mr Reuss said too much had been invested in the automotive sector “for it to be thrown away because of a short-term challenge”.

He acknowledged that more regular dialogue was needed between the FCAI and FAPM, but described the talks as a positive move forward in a climate that was not as bad as some have suggested.

“Turmoil has a strange way of bringing people together, but the fact that the FCAI and FAPM have renewed their working relationship is certainly a positive step,” he said. “And despite all the gloomy talk about the current environment, the global factors have potential upside as well as downside in the medium-term.

“In the next few months, stronger yen will make local OEMs and suppliers much more competitive. Importers will probably need to take price, giving preference to locally built products. There’s plenty of talk about the possibility of a Chinese car invasion but the RMB has appreciated against the US dollar and more against the Australian dollar.

“That’s going to make that proposition much harder at the bottom end of the price ladder. Currency stabilisation, not only the yen, but the Chinese renminbi and Korean won, could offer greater opportunity for component exporters.

“Australia’s ability to ride out the global situation as a robust economy could enable us to move quicker when recovery kicks in.” Mr Reuss emphasised that the long-term future was positive and that components manufacturers should use the federal government’s promised funding “to break new ground”.

Left: GM Holden chairman and FCAI president Mark Reuss and FCAI chief executive Andrew McKellar.



“This is not the time to give in,” he said.

“We have been given clear direction from the Rudd government to innovate more and offer Australians greener cars. We have been given $6.2 billion to share as an industry, stimulating what we have called a ‘decade of innovation’. It’s a major redirection for the government and the most tangible guidance yet to redefine what we are as an industry.

“We need to look past the immediate challenges of survival and into a longer-term future of shared success.” FCAI chief executive Andrew McKellar told GoAuto this week that the meeting with FAPM covered a range of short- and long-term issues and could lead to more co-operative approach between the two bodies.

“There was a desire to put forward with some co-operative approaches on a number of things. There is concern about the current state of the market and the impact that is having on the prospects for the local manufacturers,” Mr McKellar said.

“We’re all aware that steps … need to be looked at in terms of stabilising the supply side of the market and particularly as a function of what’s occurring on the dealer finance, so that’s one aspect of it. But there were also discussions in relation to some of the ideas that FAPM has proposed in terms of possible ideas for demand stimulus.

“So I think there was agreement that we need to look at those things in more detail to help each other on those issues and to contemplate whether or not there are viable ideas that can be put forward. There were discussions that still need to be taken forward on that point.”

Denso named Supplier of the Year

DENSO Australia Group has again been named the Federal Chamber of Automotive Industries (FCAI) Supplier of the Year, taking out Australian component sector’s most prestigious award for the second year in a row.

FCAI president and GM Holden chairman Mark Reuss presented the award at a ceremony in Melbourne last Wednesday, November 26, to Denso managing directors Neil Kitamiya and Russell Pettis.

The company, which designs and supplies a wide range of components including air-conditioning and engine cooling systems, diesel fuel injection systems and instrument clusters, was chosen ahead of finalists Australian Arrow, Autoliv Australia, Continental and Mett.

The judging panel includes purchasing and supply directors from Ford Australia, GM Holden and Toyota Australia.

“The FCAI Supplier of the Year awards are about recognising excellence among the supplier community,” said Mr Reuss. “Winning these awards demonstrate a benchmark of supplier excellence for the rest of the industry to follow.

It certainly gets the attention of government decision makers, but most importantly, it’s a major morale boost for employees.

“And confidence is what it’s all about right now. Confidence among consumers, component-makers, manufacturers, banks and the government. Confidence among us as industry leaders.

“We’ve been here before – the 1970s, the 1980s, even the 1990s depending on which car company you represent. The twin oil shocks of the ‘70s had us clamouring to make investment decisions which could have stopped this all 30 years ago.

“So we’re there again – and how we react in the next few months will define us as an industry.”

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