-~ AUSTRALIA
PR~ IME NJMSR
FOR PRESS 11 MARCH 1979
ELECTORATE TALK
One of the most exciting industrial projects of the present
time is the development of the world car. The world
automotive industry is going through a period of dramatic
change which will intensify throughout the 1980' s.
Increasing costs, together with demand for more fuel
efficient vehicles, are encouraging integration of operations
and the use of common vehicle components on a world basis.
The world car concept involves production by related companies
in different countries of cars with common design factors.
Over the next decade, the industry will be putting a huge
effort into the design and production of smaller, lighter
and more fuel efficient cars.
Front wheel drive, transverse engines, together with electronic
parts will become common. Production of component modules
such as trans-axles, engines and ignition equipment will
take place in specialised facilities. They will be produced
on a scale designed to minimise costs. These facilities will
be located throughout the world, where the best comparative
advantages can be obtained.
With five manufacturers operating in a small market the
Australian industry has lacked access to scale economies
and opportunities for specialisation. This has inhibited
productivity and quality improvements and has limited the
ability of Australian manufacturers to compete in both domestic
and export markets.
The Australian vehicle industry needs to respond to the new
chal;-lenge. Their product must be attractive to the Australian
market compared with imports, less costly to produce in
Australia, and have greater export potential.
The best way the industry can ensure its future prosperity
is -o reduce costs and increase competitiveness through large
scs Ie export activities. Australia is responding to these
challenges with its entry into the world car scheme. General
Motors-Holden, for example, is planning a $ 210 million fourcylinrder
engine complex in Victoria. This new plant will be
one of four such plants throughout the world producing engines
for a world car. / 2
-2
It is great news for Australia that two-thirds of the output
of the Australian plant will be exported to Europe. I am
confident that this is only the first stage and that other
sec-tors of the Australian -motor vehicle industry will follow
in this export drive.
Today, there is a high standard of design and craftsmanship
in our motor vehicle industry. We are building world-class
qrcucts and for that Australian workmen and Australian
enQa-. e: ers can -talke a good deal of pride.
Some changes have been made to the Government's motor vehicle
plail zo encourage these new developments. The Government
has approved these changes because it believes the longer-term
viah41ity and competitiveness of the local industry will be
enh-anced and cheaper cars offered to consumers. On top of
tha. t it will result in greater work security for more employees
than would otherwise be the case.
The Government has made many other moves in the past few years
to assist Australian firms to get into export. We have
introduced a new Export Expansion Grant Scheme, improved
the Export Market Development Grant Scheme, extended the
service offered by the Export Finance Insurance Corporation,
established an Overseas Projects Corporation, and up-graded
the general services provided by the Department of Trade
and Resources to individual exporters. But the greatest
incentive the Government has given exporters has been to
reduce inflation.
Australian firms are now competing successfully in some of
t~ he world's -toughest markets. They are exporting to markets
that would have been nothing more -than a dot on the map
a few years ago. We are now more competitive than at any
time~ during the last seven years. This export activity
will benefit every Australian. It builds on confidence,
assists general economic recovery and provides a basis for
creation of new Job opportunities. Our involvement in
the' world car scheme deserves the strongest community support.
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