Mike Stevens | Jun 25, 2009

THE FEDERAL GOVERNMENT is developing a scheme to help build a greener, more efficient car industry in Australia.

First announced by Prime Minister Rudd in November last year, the Automotive Transformation Scheme replaces the Howard Government's Automotive Competitiveness and Investment Scheme (ACIS), bringing a greater focus to innovation, with increased Federal support for research and development.

The scheme will cost $3.4 billion, and forms the centrepiece of the Rudd Government's $6.2 billion new car plan.

"Stimulating additional R&D, a major contributor to innovation, will improve productivity and build competitive advantage," Small Business Minister Craig Emerson said.

"The new scheme also requires participants to demonstrate a commitment to improving environmental outcomes.

"This will lead to the development of vehicles with lower fuel consumption and lower greenhouse gas emissions."

The Automotive Transformation Scheme will run from 2011 to 2020.

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