An Australian car industry ?

The Federal government has decided to invest $ 6.2 billion to bring the Australian car manufacturing industry into the twenty-first century.

$ 1.3 billion of this goes to a fund to promote the design and manufacture of " environmentally sustainable vehicles " - in other words - " Green " cars that use non oil based fuels and do not contribute to carbon emissions.

Perhaps this might be a good time to have a long, hard look at the whole concept of car manufacturing in Australia.

This industry has always been a dream of Australian governments from two perspectives - prestige -and the fact that cars are labour intensive - and employ a lot of people.

The history of the car industry in Australia leaves a chain of wrecked dreams in it's wake. Manufacturers have come and gone - Leyland, Nissan and more recently Mitsubishi come to mind - leaving Ford, Holden and Toyota still in operation.

Manufacturing has contracted to each producing a single model in this country - and importing the others in their product range.

We have been through the failed concept of model sharing - where rebadged cars purported to offer competition without the manufacturing cost of individual production.

The world has changed - and is about to change some more. The dynamic South Koreans are actively competing at the lower price end of the market - and Germany has a firm hold on the prestige marques.

Within the next few years we will see imports from both China and India doing battle for export dollars - and this at a time when our car tariffs are about to drop from ten percent to a low of five percent.

We seem to be chancing our luck on developing a car that will attract ecological demand in this country - and it would be a big ask for the existing three manufacturers to all be equally successful.

Is there room for three car manufacturers in Australia in the twenty-first century ?

Or should we bite the bullet and accept that the end of car manufacturing here will mean a sharp drop in available jobs - but that the cars we import will keep getting cheaper ?

And would that $ 6.2 billion be better spent developing some other industry that is sustainable - given our high wage structure and small domestic market ?

Perhaps circumstances will dictate the future of car manufacturing in Australia whatever direction we choose !