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Shut Holden, Ford and Toyota, says Suzuki

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Shut Holden, Ford and Toyota, says Suzuki

Steve Colquhoun

August 26, 2010 - 2:01PM

Suzuki has called for local car manufacturers Ford, Holden and Toyota to close their factories.

Japanese brand says local car makers are unviable and out of touch with consumers.

Holden, Ford and Toyota's car manufacturing operations in Australia are unviable and should be shut down, Suzuki Australia says.

Suzuki general manager Tony Devers, whose company imports a range of light and medium cars and compact SUVs from Japan, says it makes no sense for the federal government to continue to spend hundreds of millions of dollars propping up local manufacturing operations.

"From the point of what the consumer wants, quite obviously they're not buying locally manufactured cars which represent around 14 per cent of total sales now," he says.

"Consumers prefer the imported cars, not just because they're imported, but because the other manufacturers have read the consumer trends and built cars for those trends.

"Management after management of the local factories haven't read those trends properly, and there's no accountability for that. Holden got a grant to bring in a small car from Korea, the Cruze. Is that fair? What about the previous management? Why didn't they understand that and build a (small) car?

"They keep pumping out big cars to rental companies and governments. There's no accountability for these managers that come over here and stay for two or three years, go back, and someone has to come over to try to fix it but they don't. The large car segment has been diminishing for 15 years. It's no secret, it hasn't happened overnight."

Mr Devers says the three local manufacturers would actually be more profitable by abandoning Australian-built cars and importing their entire range, and could even send iconic local cars such as the Commodore and Falcon to be built elsewhere.

"I'm all for a strong industry. I just don't believe we can afford to prop it up to the extent that we are. Look at what Nissan has done after they pulled out (of local manufacturing) in 1996, or thereabouts. Nissan has become stronger, they have a better model range. Mitsubishi will do the same thing," he says.

"I agree we've got to maintain jobs, but at what cost?

"In reality, perhaps the government should be spending money in supporting cars that are emissions-friendly, fuel efficient and safe. There's none of that. They have this green plan, but the cars are over-priced relative to the normal consumer.

"Where's the benefit to driving an (Hyundai) i20 or an (Suzuki) Alto? If they're fair dinkum about the environment and fuel efficiency, they'd be doing something to support those cars."

Mr Devers says the entire local industry needed an urgent review to justify the continued government subsidies that he believes unfairly advantage Holdern, Ford and Toyota.

"I don't know the figures for how many people are directly employed in automotive manfacturing, I'd guess about 10,000, and we don't know exactly how much the grants and kick-backs from the federal and state governments are, but if it's around one billion dollars a year, you just have to do the maths to come up with $100,000 per employee. Is that fair? Is that viable?

"I just think that somebody's got to look at the whole scheme and figure out what's best. Someone who is independent and apolitical.

"Both political parties are going to take the line we need a car industry because there's 10,000 jobs at risk. But what if someone comes in says that 3000 can be absorbed because the volume is not going to drop? Because of a better model range and access to other cars, then those 3000 people get absorbed. What happens to the rest? I don't know."

He says Australia could continue to provide research and development skills to the global automotive industry, such as recent projects where Holden employees designed and engineered the Chevrolet Camaro and Ford similarly contributed to the T6 global pick-up truck project.

"There is an over-riding idealism that we need an industry, but the facts indicate that we don't," he says.

"You can say that we need to develop engineering. Do that. Have an institute of automotive engineers that can do projects for the (importing) car companies that will still be here. If we can develop that professionalism and that edge, to do that you've got to be the most efficient and the best. And if you're the best, the BMWs, the Mercedes, the Mazdas, Hondas and Suzukis will use you.

"If we're good enough, we could be the centre point for research, development and engineering for the Asia/Oceania region."

Mr Devers says a shutdown of local manufacturing would need to be carefully planned and executed. "I'm not saying you close the gates tomorrow. Let's say, in five years' time, they get their product line-up planned and ready, and ADR's approved, so it's a seamless introduction of new cars," he says.

"I have a philosophy. You can do more of the same, which means you go backwards, you can do more and better, which means you're standing still, or you can do something different."

Federal Chamber of Automotive Industry chairman Andrew McKellar has, not surprisingly, taken issue with Devers' comments.

While he admits support for Devers' push for incentives for fuel efficient vehicles like the Alto, McKellar is a firm believer in the importance of local manufacturing.

"We've got to be careful not to confuse the different objectives here," McKellar says. "Reducing fuel consumption and CO2 emissions is everyone's objective... The industry has said it will support a reduced emissions standard."

He cites the introduction Toyota Camry Hybrid production, Holden's SIDI and FlexFuel technologies, Ford's work on EcoBoost and liquid gas injection (LPI) Falcon and diesel Territory and the plan for local Holden Cruze production as signs the local manufacturers are listening to market demands.

"I think there is a very valuable role and contribution that the local manufacturing industry plays in the overall industry," he says. "I think we'd be poorer as an industry and a nation without it."



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