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Senate Launches Inquiry Into Australian Auto Industry, VACC Approves Photo:

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Trevor Collett | Dec, 01 2014 | 1 Comment

Uncertainty surrounding the future of Australia’s automotive industry has prompted a new Senate inquiry, which has now been referred to the Senate Economics References Committee and to report by the first sitting day in November 2015.

Titled ‘The Future Of Australia’s Automotive Industry’, the inquiry is designed to be an all-encompassing review of where the industry might stand in the lead up to 2017.

Ford will exit the local manufacturing scene in around two years from now, with Holden and Toyota to follow a year later.

But the recent departure of Holden’s local boss after just seven months in the top job - and operating losses from all three local carmakers this year - has prompted fear that one or more of the carmakers won’t go the distance.

Rumours of an ‘early departure’ for Holden began almost as soon as the carmaker announced its plans to continue until 2017, but the carmaker insists it will continue until then with or without Federal Government support.

A report from the Productivity Commission earlier this year recommended a virtual ‘end’ to the local industry for carmakers, saying the Automotive Transformation Scheme (ATS) should not continue beyond 2017.

The Federal Government’s May budget sought to adopt some of the Commission’s recommendations with proposed savings from assistance schemes and grants to total nearly $900 million.

But Labor, Greens and crossbench Senators are now set to block the proposed cuts to the ATS in the Senate, and have instead supported the new inquiry.

Two weeks earlier, Labor's Senator Carr said that the viability of 128 automotive parts supplier companies still registered for industry participation funding would be threatened without transitional funding.

“It’s vital that these companies are given the opportunity to transition to something new and to ensure that we’re able to attract investment into what will be a rebirthed automotive industry in this country,” Senator Carr said.

Australia's automotive manufacturing industry is much more than just Holden, Ford and Toyota.

There is a large aftermarket and specialist parts supplier industry - bullbars, 4WD parts and accessories, specialist transmissions and diffs, suspensions, glass, and many more - that supplies product to a global market, as well as to the Australian market.

Many in this industry, who also supply 'the big three' car manufacturers, are watching closely to ensure that they do not become 'collateral damage' in any shakeout in the sector with the departure of Holden, Ford and Toyota.

The inquiry has been met with approval from the Victorian Automobile Chamber of Commerce (VACC), and the national motor trades body, AMIF.

“Confirmation in the Senate of a far reaching inquiry into all elements of the automotive industry is music to our ears,” former VACC Executive Director, David Purchase, said.

“We have called for a whole-of-industry inquiry for many years. 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 inquiry is open for submissions until May 29 next year, with the report due to be handed down on the Senate’s first sitting day in November, 2015.

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