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The Australian government today pledged a new A$200 million (RM576 million) bailout package for the auto industry as it looks to boost struggling sectors to help the economy transition away from mining, according to various reports. Mining, a major contributor to the Australian economy, is facing low market prices, writedowns by big players and layoffs.

Industry Minister Kim Carr said the funds would ensure the “automotive manufacturing sector has a strong future and continues to provide high-skill, high-wage jobs for Australians.”

“The motor vehicle manufacturing industry in this country provides thousands of jobs, billions of dollars in export income and investment and benefits in research and development. Our actions will provide crucial ongoing support for an industry that has been under considerable pressure with a high Australian dollar over an extended period and an increasingly competitive global market,” Carr added.


The announcement came on the opening day of a five-week election campaign that will culminate in national polls on September 7, with the ruling Labour party (now led by ex-PM Kevin Rudd, after he ousted Julia Gillard in a party vote), facing an uphill battle against the conservative opposition.

To be pushed along with the bailout is a new regulation mandating the purchase of Australian-made Commonwealth vehicles, which are part of the government fleet. “If the 100% Australian-made passenger motor vehicle fleet target the Australia government has committed to today was adopted at all levels of government, sales of Australian-made vehicles could increase by over 18,000 units per year. This represents an 8% increase on 2012 production volumes,” Carr reasoned.

According to The Australian, 86% of cars that joined the federal government fleet last year were made in Australia. Overall, 64% of the 7,046 passenger vehicles in the commonwealth fleet are Australian made.

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The auto manufacturing sector employs more than 50,000 people in Australia, with another 250,000 jobs in the ecosystem. But it has struggled, until very recently, with the Australian dollar trading near or above parity with the greenback for almost two years, squeezing exports and compounding rising production costs.

Canberra extended a A$3.2 billion (RM9.2 billion) bailout to the embattled sector at the height of the global economic downturn and provided additional lifelines to Ford and Holden last year. But it was not enough to prevent the Blue Oval from announcing in May that it will stop making vehicles in the country by 2016. On a much smaller scale, last week, we saw GM brand Opel cease operations Down Under after less than a year in the country.

GM subsidiary and “national car” Holden, which in April announced a plan to slash 500 jobs, and Toyota (Aurion sedan pictured above) are the two remaining big players in the Aussie auto industry.