Car mak­ers ham­mered

NT News - Motoring - - CARS GUIDE - By NEIL DOWLING

AUS­TRALIA’S car­bon tax — which doesn’t ap­ply to im­ported goods — is ‘‘adding pres­sure’’ to lo­cal man­u­fac­tur­ers, Holden says.

The car maker says car­bon pric­ing ‘‘adds a fur­ther cost to our busi­ness at a time when the Aus­tralian dol­lar is ex­tremely high, tar­iffs are at an all time low and we’re com­pet­ing with im­porters that are able to of­fer very ag­gres­sive pric­ing as a re­sult of the strong cur­rency’’.

Holden spokesman Craig Cheetham says while his com­pany sup­ports the need to re­duce the car­bon foot­print, it has an af­fect on its op­er­a­tions.

‘‘The tax only ap­plies to locally made cars and there­fore gives im­ported ve­hi­cles an ad­van­tage,’’ he says.

‘‘This places an ad­di­tional pres­sure on our lo­cal man­u­fac­tur­ing op­er­a­tions.’’

The car­bon tax is a fur­ther blow to Holden, which on Fri­day an­nounced it would re­duce pro­duc­tion at its Ade­laide plant be­cause of the high ex­change rate of the Aus­tralian dol­lar.

The high rate makes im­ported prod­ucts cheaper and ex­ported prod­ucts — Holden next year will ex­port about 8000 Com­modores to the US — far more ex­pen­sive.

Mr Cheetham, speak­ing on be­half of Holden manag­ing di­rec­tor Mike Dev­ereux who is over­seas on hol­i­day, says the Aus­tralian car in­dus­try has never been more open and com­pet­i­tive.

‘‘Our con­tin­ued fo­cus is on im­prov­ing our qual­ity and pro­duc­tiv­ity to en­sure we re­main glob­ally com­pet­i­tive,’’ he says.

Aus­tralian car mak­ers have been hit this year by five blows:

The in­tro­duc­tion of the car­bon tax;

Clo­sures of com­po­nent sup­pli­ers;

The can­cel­la­tion of the Fed­eral Gov­ern­ment’s $800 mil­lion green fund that sparked the de­ci­sion for

Lo­cal man­u­fac­tur­ers are not able to pass the cost of the car­bon price on to cus­tomers and have to ab­sorb it into their al­ready tight mar­gins

Holden to build its small car, Cruze, here;

A de­cline in sales of its main prod­uct line of large cars; and

A strong Aus­tralian dol­lar that is mak­ing im­ported cars cheaper.

In July, Mr Dev­ereux said the car­bon tax would cost Aus­tralian car mak­ers and com­po­nent sup­pli­ers about $30 mil­lion a year.

But in a re­port com­mis­sioned by the Fed­eral Cham­ber of Au­to­mo­tive In­dus­tries, ac­coun­tancy firm Price­wa­ter­house­Coop­ers put the fig­ure higher. It says the three car mak­ers oper­at­ing in Aus­tralia would share an an­nual im­post of up to $84 mil­lion.

The re­port cal­cu­lates that that would in­crease the price of each Aus­tralian­made car by at least $400.

Tony We­ber, the chief ex­ec­u­tive of the Fed­eral Cham­ber of Au­to­mo­tive In­dus­try, has said sub­se­quently that he is now ‘‘re­assess­ing’’ the ef­fect of the car­bon tax.

‘‘Due to the highly com­pet­i­tive na­ture of the Aus­tralian au­to­mo­tive mar­ket, lo­cal man­u­fac­tur­ers are not able to pass the cost of the car­bon price on to cus- tomers and have to ab­sorb it into their al­ready tight mar­gins,’’ he says.

The PwC re­port, com­piled be­fore the car­bon tax was in­tro­duced, warns that ve­hi­cle im­ports are on the rise and lo­cal jobs un­der threat.

It says im­ported ve­hi­cles ac­counted for al­most 85 per cent of sales in 2011 com­pared with 60 per cent in 2002, and the num­ber of ve­hi­cles from Thai­land has dou­bled in two years.

Lo­cal man­u­fac­tur­ers have turned to im­port­ing com­po­nents rather than sourc­ing from lo­cal sup­pli­ers: 43.6 per cent of com­po­nents were im­ported in 2010-11, up from 34.8 per cent in 2005-06, ac­cord­ing to the re­port.

‘‘These chal­lenges have re­sulted in a re­duc­tion in the sales vol­ume of locally man­u­fac­tured ve­hi­cles and a re­duc­tion in lo­cal con­tent of do­mes­tic-man­u­fac­tured ve­hi­cles as the ve­hi­cle as­sem­blers have in­creas­ingly sourced com­po­nents from over­seas sup­pli­ers.

‘‘This has re­sulted in as­so­ci­ated job losses within the Aus­tralian in­dus­try.’’

Com­po­nent sup­plier CMI In­dus­trial is set to close af­ter its re­ceiver an­nounced a prospec­tive buyer had with­drawn. Sixty jobs will be lost when the Bal­larat busi­ness closes on Novem­ber 30.

A Com­modore SV6, like all Aus­tralian-made cars, is more ex­pen­sive to build be­cause of the car­bon tax, Holden says

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