Global cars will replace locals

... an industry executive this week said "global cars'' will replace indigenous low-volume vehicles. Mazda Australia managing director Doug Dickson said Australia was in an increasingly difficult position as a manufacturing base, partly caused by its strong currency. 

But he said government subsidies - as high as $100 million a year for each of the three car makers Holden, Ford and Toyota - were keeping carmakers in Australia. 

"If the car makers continue to get subsidies, they will remain here,'' he said. "It guarantees them dominance and gives them a competitive edge with fleets, government and private buyers who like the fact that they are here.''

"The big issue is the uniquely Australian cars. No one will do a unique car just for Australia anymore.'' 

Mr Dickson, who runs the Australian arm of one of the country's most successful vehicle importers, was talking in Canberra at the launch of Mazda's new mid-size CX-5 SUV - a car he said will sell at the rate of about 1000 units a month.

"Most of us (in the car industry) worry that the three Australian car manufacturers will leave the country,'' he said. "This has been discussed for years - it's just that this time, people are openly talking about it. 

"But we accept that there will be global cars - cars made for numerous markets. "I don't believe any country will, in the future, be making an indigenous car.'' 

Mr Dickson said the high value of the Australian dollar made it very expensive for products made in Australia to compete in export markets. "The exchange rate and the small population of Australia makes for a very difficult business model,'' he said.

"Car manufacturing relies on volume and factories are ideally at the centre of a large population of buyers. That's not the case in Australia. Mazda, for example, could not and would not build a car in Australia.'' 

Mr Dickson's comments echo those of Ford Motor Company president Alan Mulally last month who indicated the Ford Falcon may be replaced within four years by a global car from Ford's stables. It led to questions being asked about the future of the Holden Commodoe which, while having an export program was severely affected by the high value of the Australian dollar.

A high dollar makes the cars expensive - and sometimes uncompetitive - in other countries. But while Mr Dickson indicated we may be looking at the end of a unique Australian car, he doesn't see it as the end of the local car industry. 

"Innovation is a key. We can still be an international centre of excellence in the car industry in the fields of, for example, design and engineering, which could receive government support,'' he said. 

"The cars that are designed and engineered here may be for global markets other than Australia. By the same token the cars that are made here don't necessarily have to be designed here.''  "The future is - and I think the government gets this - is to remove the nexus between what's designed here and what's made here.'' Mr Dickson said a prime example was the Mazda BT-50 and Ford Ranger utes. 

"These are designed here - Ford and Mazda together - but not manufactured here. There may also be a parallel with the Holden Cruze,'' he said. Mr Dickson said he "desperately'' wanted an Australian motor industry.  "As an Australian, I don't care what they make as long as they provide the infrastructure for young Australians to become good at making things,'' he said. 

"As a industry figure I want the industry to be strong because we become a whole lot more important as an industry. Without manufacturing here we would just stand in a long line waiting for attention.''  The Federal Government gives subsidies to a range of industries - including the automotive industry - to ensure businesses remain competitive and continue employment opportunities. 

The three car makers - Holden, Ford and Toyota - can annually receive grants of up to $100 million each to introduce new models, such as a grant given to Holden to bring the Cruze small car to local production in Adelaide.