'TEAM Australia'
strategy to boost automotive sector

In August 2005, Australia's Industry Minister Ian Macfarlane took initiative to create an interactive group of motor vehicle manufacturers and auto component producers. This Auto Industry Strategic Group is expected to establish effective communication between the major motor vehicle manufacturers and auto component producers. This group has adopted a “TEAM Australia” strategy to promote the country's automotive industry as a whole. Following are excerpts of Macfarlane's speech delivered at the annual convention of the Federation of Automotive Products Manufacturers (FAPM) held recently on Gold Coast.

The strategy group is a leadership group intended to assess and find ways to enhance the Australian automotive sector to help it respond to the changing face of global manufacturing. Barriers are being broken-down. Doors have been opened. And vehicle and component producers are working more closely than they could have imagined even a few years ago even one year ago and that has to be a good thing,
The "TEAM Australia" strategy is aimed at promoting the Australian automotive industry as a centre for high quality, innovative manufacturing. It's not good enough for us to know that the message has to be taken to the corporate headquarters of the vehicle manufacturers. The industry has openly embraced the “Team Australia” approach but urge you draw on this new purpose to look beyond Australia.
If it helps, I'm happy to open doors as we did for delegations of component producers when travelling to head offices of motor vehicle producers (MVPs) in Japan and Detroit. We have had some good outcomes. FAPM members obtained unprecedented access to key global decision-makers during these visits. In Japan, Toyota announced that it would review the strategic position of its Australian operations with a view to increasing its production capacity. Nissan is also showing great interest in the capabilities of the Australian component sector. In Detroit, Ford and GM reaffirmed their commitment to Australian operations and offered assistance to ensure the continued success of the components industry. There are very few reasons to go to Detroit in the heart of winter. In fact ensuring manufacturers keep and grow their place in the Ford and GM supply chains is about the only reason I can think of.
These delegations showed that Government and industry can work together to create opportunities but the Government can only do so much. To follow up and exploit the opportunities will require a concerted effort from you a challenge that I want to be sure you will rise to. This is not a time to sit back and wait for the MVPs to come to you or to just cross your fingers that global supply opportunities come your way.

Supplier Development Program
Export capability is critical to the automotive components sector, in fact any manufacturing sector in a market as small as Australia. We are a small and relatively mature market in terms of domestic sales growth so export growth represents the only way ahead for industry.
To boost that export capacity, I'm announcing today a $7.2 million Supplier Development Program. The Program is designed to bring vehicle and component producers together to jointly pursue export markets within large-scale global supply chains. Because of the importance of fostering this combined effort, the Supplier Development Program will stand as a separate initiative within the ACIS Motor Vehicle Producers R&D Scheme.
Initially, it will focus on supplier development initiatives to be implemented by motor vehicle producers. The MVPs will work with component suppliers to identify priority areas for capability development, beyond your existing development activities, and nominate projects for funding.
The sorts of activities that could be eligible for support include cost estimating, project management, quality control and production readiness all critical areas in a just-in-time, on-budget environment.
Proposals will be assessed by a committee which would include a representative from FAPM most probably Peter Upton (for his sins). The details of the Program are being finalised and will be announced formally in the near future. But let me assure you that in line with the Howard Government's commitment to red-tape and regulation reduction, the Program will be user-friendly and transparent my office and my Department will see to that.

Ford grant / ACIS assistance
Speaking candidly, I don't think anyone can question the commitment of the Howard Government to the sustainability of the automotive industry in Australia. The Prime Minister made some very telling and direct remarks about the importance of the auto sectors when he announced $52.5 million grant for Ford Australia. This grant will enable Ford to develop the next generation Falcon and design and engineer a pick up truck platform for the global market.
The Ford grant was a clear demonstration of our determination to give your sector every chance to evolve and seal its place in the global vehicle market. And I know the components sector will be given full, fair and reasonable opportunity to participate in Ford's future. This grant can be seen in the context of the transitional support the Government is providing to the industry support that I announced as part of the decade of certainty package for the industry back in 2002. No one should forget that ACIS will continue to deliver in excess of $7 billion in assistance from 2001 to 2015.



Industry Statement
On the subject of manufacturing as a whole, just over a week ago I announced a landmark development in setting the future policy direction for Australian industry. The Government's new Industry Statement, to be finalized by early next year, will set policy directions to maintain the country's present economic momentum over the next two to three decades. This will be a very significant policy statement arguably the most important to the sector in this term of government.
At the moment the Australian Government's industry policy is quite correctly built on sound macroeconomic policies that foster a stable economic environment in which industry can invest with certainty and confidence. Microeconomic reforms have also contributed to a positive business setting by making product and labour markets more competitive. This framework is complemented by specific funding programs which foster innovation, develop export markets and encourage investment.
However we have now stepped into a new era of true globalisation. Communications advances have redefined "business without borders" and all industry sectors have to become regular contributors to global supply chains and export networks. To formulate responses to those new challenges and expectations, I am holding a series of state-based business roundtables with key business and industry representatives to draw out company and industry association opinions and views.
An issues paper has been circulated that covers export directions; development of global linkages; support for innovation; new industry sector emergency and better creating value.

Many New Challenges
There are now many new challenges facing our industries. One of these is the rise of lower-cost competitors like China and India something the automotive industry has been aware of for some time. The Statement will be a considered plan to tackle the challenges while also highlighting opportunity.
The next decade will be a pivotal one for Australian industry. Now is the time to consolidate all that has been achieved in recent times and adjust to powerful new trends in the global market. The first business roundtable will be in Sydney next week. In addition to this, there will be a broader consultative process through public submissions and I'm relying on many of you to make your views known through this process.
The Industry Statement is about positioning your companies to dive into new export markets and then to have the innovation, communication, product and service skills to swim for many years to come.
In conclusion, none of us are likely to pretend there are any magic bullets or instant cures. The door to my office is always open to the Australian automotive industry and I will continue to do whatever I can to advocate the industry to cabinet, my colleagues, my state counterparts and to the rest of the world. The Government has shown it can, and will, work with industry to open new opportunities. However, it is you who will exploit and harness these opportunities with the right or innovative products and services.
I know your sector is re-positioning itself and responding to the global waves we are all surfing. The new models are here or coming through the VE Commodore, the new Camry and Aurion.



While Ford has announced an export program for the Territory to South Africa and an exciting turbo version of the Territory. These new models and the export initiative will reinvigorate the larger car market and provide new opportunities for the components sector.
The challenges facing the auto sector will not be easy to overcome. But I hope you will be able to use these local opportunities to forge new alliances and springboard into overseas markets.
And remain confident that through specific initiatives like the new Supplier Development Program the government will always support your efforts to fulfil the industry's export potential.