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AAAA Calls for Action to Support Automotive Exports

In collaboration with Austrade, the Australian Automotive Aftermarket Association (AAAA) is using successful trade missions to create export opportunities for local automotive component and aftermarket parts manufacturers.

In August the AAAA led a five day mission to Indonesia and Thailand focused on collecting market data, researching the local supply chains and building links with key decision makers. Conducted under the auspices of the Asian Aftermarket Pathway Program, the mission was supported by a Federal Government Asian Business Engagement Grant.

AAAA Executive Director Stuart Charity said that AAAA has for many years organised overseas missions promoting Australian skills and capabilities in the automotive aftermarket parts sector. “The results are annual exports valued at $800 million,” said Stuart Charity.

“AAAA experience promoting exports of aftermarket parts will equally apply to promoting the original equipment component sector. Local businesses now supplying Australian car makers – which will close by the end of 2017 – must urgently diversify and engage with the international market.

“On the August trade mission to Jakarta and Bangkok, nine local parts makers servicing both the original equipment and aftermarket segments participated in carefully researched business itineraries. The Australian delegations attended industry briefings, visited local company operations, participated in business matching and networking sessions, and met senior government trade officials.

“Thailand and Indonesia are important markets for original equipment and aftermarket parts, with a rising number of 4WD vehicles and a high demand for quality parts that Australia can supply.

“AAAA welcomes Austrade’s forward looking approach to promoting the automotive industry. They recognise the need for Australian components and parts makers to gain international exposure and have supported previous trade missions.

“Austrade provides essential industry intelligence for the missions. Their international teams know their local markets and can identify suitable companies for site visits, business matching and networking meetings.

“However, to capitalise on these valuable services, most small businesses need some assistance to afford the associated costs,” said Stuart Charity.

Jobs, Skills and Capability Will be Lost
Australia’s automotive aftermarket parts sector has established an international reputation for design innovation and high quality. AAAA believes strategies it used to build aftermarket parts exports can be applied to establish markets for original equipment components among international vehicle manufacturers.

The closure of Australia’s car manufacturing plants will cost about 12,500 jobs. Their component suppliers will also close – costing a further 33,000 jobs – unless they diversify and find new markets.

“To this must be added job losses among the small businesses that support the component suppliers. The Bracks report estimated there is a six-to-one multiplier effect for employment related directly and indirectly to the automotive industry.

“Without strategies and action plans dedicated to redirecting those skilled people and their sophisticated engineering and production assets, there could be very significant manufacturing closures with job losses totalling hundreds of thousands by 2017.

Export – the Solution for Australia’s Automotive Industry
“Given that Victoria faces the largest number of automotive business closures and job losses of all the states, the AAAA wants the Victorian Government to contribute to the solution,” said Stuart Charity.

“Does the Victorian Government have an action plan in place to cushion the economic and social impact of this pending catastrophe? If so, we are not aware of it.

“Persistent approaches to the Victorian Government have produced limited response. We would welcome some focused strategies designed to support the work being done to ensure that this manufacturing sector is not lost.

“AAAA and its member companies would be happy to work with the Victorian Government to help develop an action plan focused on export. Strategies such as trade missions build international partnerships. In turn, this boosts trade, drives growth and creates jobs,” said Stuart Charity.

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