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Support grows for new Carr inquiry

Ready for review: The Senate inquiry will review all aspects of the local automotive industry, including retail.

Plan to look at all aspects of the auto sector hits right note for the motor trades

2 Dec 2014

SUPPORT is growing for the new Senate inquiry into the entire automotive sector that has been forced on the Abbott Government by a Labor-led majority of senators.

Parts-makers, peak automotive trades bodies, new car distributors and unions have all thrown their weight behind the new inquiry, which will be the first Parliamentary inquiry to examine the whole sector, from manufacturing to retail and repair.

Outgoing chief executive of the Victorian Automobile Chamber of Commerce (VACC) David Purchase said news of the inquiry was positive and that the chamber welcomed the review of the sector.

“Confirmation in the Senate of a far-reaching inquiry into all elements of the automotive industry is music to our ears,” he said.

“There have been plenty of reviews and reports in the past, but they have mainly focused on manufacturing and overlooked the significant role the retail sector plays.”

The new inquiry was launched after former industry minister Senator Kim Carr marshaled sufficient support from the cross benches to stymie the government’s plan to cancel the Automotive Transformation Scheme (ATS), the core of the former Government’s New Car Industry Plan.

In the face of this concerted opposition, the Government has not yet listed the ATS legislation for consideration by the Senate, even though it has been passed by the House of Representatives.

The legislation, if passed, would cancel the ATS and withdraw the $900 million in funds that are still available to provide assistance in the form of co-investment with car- and parts-makers out to 2021.

While all three local car-makers – Ford, Holden and Toyota – have signalled their intention to shut their manufacturing operations by 2017, the 2014 Budget Papers released last May showed that, before the November election, the industry in total had proposed to invest $3.8 billion over the five years to 2018.

Helped by Victorian Australian Motoring Enthusiasts Party senator Ricky Muir, who brought the Palmer United Party senate votes with him, Senator Carr then used the Senate majority to commission the new inquiry by the Senate Standing Committee on Economics.

Independent senators Nick Xenophon (Independent, South Australia) and John Madigan (Independent, Victoria) also lined up against the ATS legislation and voted for the inquiry.

The Australian Motor Industry Federation (AMIF) chief executive Richard Dudley said he was particularly pleased about the new inquiry, which will have to report by November 2015.

“There is no cohesive policy framework for the entire industry and, in fact, there is none for manufacturing at the moment either,” he said.

“This will allow all sectors of the industry to come together and plot out what are the critical issues facing each of the sectors, and which of those issues may be common to all.”

Mr Dudley said AMIF, which represents all state and territory motor trades associations and chambers of commerce, was not looking for a handout from the government.

“What we do need from government is clarity, and future clarity, about where their policy settings are going to be, what they are going to get involved in, what they are not going to get involved in, and to have a plan.

“At the moment, that is completely lacking for the entire automotive industry, yet the nation still relies on it heavily.”

An inquiry that looks at the whole of the automotive sector at the one time will help eliminate the piece-meal legislation that has blighted the sector in the past, he said.

“It is not widely understood that panel repair shops are going through fundamental change. It’s not widely known that independent mechanical repairers are going through fundamental and generational change and so, too, is retailing – new car dealing and used car dealing.

“Our history has been hallmarked with a litany of ad hoc policy making by both the previous government and now this one.”

He said there had been too many “thought bubbles” in the past, like the Productivity Commission recommendation that the importing of used cars should be de-restricted or that following the demise of the local manufacturing operations and that road-user pricing be introduced.

“The PC’s suggestion on road-user pricing should be looked at. AMIF is not opposed to the road-user pricing mechanism being looked at but, for goodness’ sakes, don’t just simply make a decision that you are going to come up with some new methodology without actually examining all the implications of what that might mean.”

Mr Dudley said AMIF was concerned that the skills and expertise built up in 60 years of car manufacture were not lost to the nation and that provision is made for the creation of the expertise needed for the future.

“We’ve got independent mechanical repairers who are looking at their business models now and realising it’s no longer possible, as it once was, to be able to service anything that rolls in off the driveway.

“The technology that’s involved, the cross-pollination of operating systems within a single motor vehicle is quite extraordinary now.

“They’re mobile computer platforms. How does an independent mechanical repairer handle that.”

Mr Dudley was also dismissive of analysts and politicians who have been prepared to write off the vehicle industry just because the three current manufacturers were planning to leave.

“We have to start looking at where the industry is going.

“You’ve got issues such as Google spending billions of dollars on driverless car technology and the convergence of information technology into mobility.

Have we seriously looked into that? “A lot of pundits and naysayers will say ‘Well, we’ve got no control over that, it’ll happen overseas and we’ll just have to put up with it’.

“Is that really true? We have quite a lot of skills and quite a lot of expertise in terms of high-tech and technology application. Are there opportunities for automotive in that space.”

Another who believes the industry has a future is Richard Reilly of the Federation of Automotive Products Manufacturers (FAPM), the peak body for the car components industry.

“The whole car industry is in a total state of transition and will be for the next couple of years from a manufacturing perspective, so I think we need to look at the whole industry and where can there be opportunities for manufacturers,” he said.

“That might mean a whole range of things, the aftermarket, different industries and different sectors, and that’s where there could be opportunities going forward.”

Mr Reilly said Australia had built up a repository of skills and expertise in the automotive sector and that it should be treated as a strategic asset.

“The FAPM and the car companies have been talking about the skills and expertise in the automotive sector for quite a long period of time now and those skills are part of vehicle manufacturing and we need to look at other ways of utilising those skills for the benefit of the nation going forward.”

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