Senate Inquiry into the future of Australia’s Auto Industry

In its submission to the recently announced Senate inquiry into the future of the Australian automotive industry, the Australian Automotive Aftermarket Association (AAAA) will deliver the message that the automotive aftermarket can play a key role in absorbing some of the excess capacity, skills and knowledge that become available as the shutdown of the Australian domestic passenger vehicle sector plays out.

AAAA Executive Director Stuart Charity said the aftermarket has always been independent of vehicle manufacturing. “For decades, governments considered only the car makers when designing automotive industry policy. Australia’s aftermarket parts, service and repair sectors have been left in a policy vacuum,” said Stuart Charity.

“This means about one third of Australia’s $108 billion automotive industry has been neglected. We see this new Senate inquiry as an opportunity to ensure that policy makers understand the value that Australia’s automotive aftermarket adds to the community and to the economy.

“The automotive aftermarket is expanding internationally and Australia is part of that growth story. We will tell the inquiry that Australian aftermarket manufacturing has taken the initiative by creating innovative products and generating export sales in highly competitive international markets.

“For example, Australian aftermarket manufacturers have built a strong reputation for high quality performance, racing and four wheel drive parts and accessories. These and other Australian aftermarket products are generating almost a billion dollars of export sales a year.

Cutting ATS is a lost opportunity
“The Federal Government proposal to cut $500 million from Automotive Transformation Scheme (ATS) funding over the 2015 to 2018 period, and terminating all automotive industry assistance on 1 January 2018, would be a lost opportunity to assist the remaining original equipment (OE) auto parts manufacturers to transition and to thrive in new fields, and for aftermarket manufacturers to take advantage of strong global demand for Australian products.

“Currently the ATS excludes the manufacturers of automotive aftermarket parts from accessing the Scheme. We will advocate that the ATS funding should be maintained and the scheme’s intent and eligibility should be re-examined and re-designed.

We will argue that ATS eligibility is too narrow and has led to market distortion and competition inequity. It effectively paid the OE sector to compete against the aftermarket, which is nonsense. We want to make sure that any new initiatives coming from this Inquiry treat auto parts manufacturers equally, because both the aftermarket and the OE parts manufacturers make meaningful contributions to our economy.

“With appropriate government policy, our energetic aftermarket will further expand innovation, manufacturing and exports, while continuing to employ – rather than waste – critical existing automotive capital and labour.

Maintaining the skills and technology
“Australian aftermarket and OE parts manufacturers have successfully proven they can meet international quality standards. It is vital that we support Australian auto component producers as a method of retaining our skills in creating high quality manufactured products and delivering them on time in complex production environments.

“These skills are required to continue growing our automotive aftermarket and to feed into other high technology industries.

“The AAAA applauds the efforts of Shadow Minister for Higher Education, Research, Innovation and Industry, Senator Kim Carr, Australian Motoring Enthusiast Party Senator Ricky Muir and Independent Senators Nick Xenophon and John Madigan. These Senators appreciate that if appropriate policy settings are in place, Australia can maintain a robust automotive industry into the future.

“Their work offers a new chance for an industry that has served Australia well. AAAA looks forward to contributing to this whole of industry inquiry,” said Stuart Charity.

CLICK HERE to view the Inquiry terms of reference.

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