Car industry head predicts dire future

A "perfectstorm" is about to hit the car industry, Australian Motor Industry Federation chair Richard Dudley has warned.

The next federal government must act within 100 days to save it, he said yesterday. Mr Dudley said it was not just car manufacturers at risk but all the businesses that repair, sell and service the nation's cars.

He said the automotive workforce dwindled by 16,000 people last year. "Unless a more strategic, whole-of-industry approach is taken, then the resulting deluge may impact our ongoing reliance on road transport and the social and economic wellbeing of the nation," he said at the National Press Club yesterday.

His comments follow a turbulent time in the industry after Ford declared it would be forced to shut down its Australian operations. Holden is also wobbling, with boss Mike Devereux saying the cost of making cars in this country is unsustainable. Holden is asking its workers to take pay cuts and is offering redundancies.

Mr Dudley said the industry needed a "clear pathway" for government intervention, assistance and support. He called for an increased awareness of the changes affecting the industry, the need for better industry self-regulation and better partnerships with government to develop a longer-term plan for the industry through a White Paper and a Green Paper.

"So critical are the issues facing the entire industry that AMIF demands that within the first 100 days of the 44th Australian Parliament, the Government engages with industry and starts the development of a Green Paper (a preliminary report) and, ultimately, a White Paper, on the future of the automotive industry to be delivered within 12 months," he said.

The Federal Coalition, which is likely to be in power after the September election, has pledged to start a Productivity Commission review of car industry subsidies as soon as possible after the election.

They say they are committed to creating a viable future for the car industry and that repealing the Carbon Tax will lower manufacturing costs. The Government says it will maintain the existing level of funding for the industry and says the Coalition's policy of reducing that funding by $500 million would "kill" the industry.