Governments abandon local manufacturing

AUSTRALIAN governments are buying half the number of locally manufactured vehicles that they did 10 years ago.

Following Ford Australia president Tom Gorman’s warning last week that stocking government fleets with imported vehicles could put local car-makers out of business, GoAuto has obtained evidence that underscores these concerns and shows a stunning slump in government purchases over the past decade.

According to the Federal Chamber of Automotive Industries’ VFACTS statisticians, Australian governments – federal, state and local – purchased 67,440 Australian-made passenger vehicles in 1996 … but bought just 33,786 in 2006.

This sharp drop in government purchases of locally-built vehicles has come during a decade of unprecedented growth that has seen new-car sales in Australia rise from 650,049 to 962,666.

While they have ordered fewer Australian-made cars, government purchases of imported vehicles has risen from 3398 in 1996 to 14,186 in 2006.

Australian-built large cars have been hit hardest by the sales shift, with government purchases dropping from 53,908 in 1996 to 28,592 in 2006. Most of that reduction has occurred in the past five years, with governments purchasing 21,949 fewer locally-made large cars in 2006 than they did in 2001.

At the announcement of the Ford Fairlane’s discontinuation last week, Mr Gorman spoke of his concerns for the Australian car industry’s future following federal Labor leader Kevin Rudd’s support for a move to redirect government vehicle purchasing to petrol-electric hybrid cars.

“It (the effect) would be enormous and it would be negative,” Mr Gorman said. “If you don’t shop locally, the stores go away.”

Mr Rudd told ABC Radio last month that he supported Melbourne City Council’s move to replace petrol-powered vehicles with hybrids.

“I think that’s a very good way to go and that’s what we’d do with the entire car fleet,” Mr Rudd told Melbourne presenter John Faine.

No Australian manufacturers produce hybrid cars, and are still years away from doing so.

A Labor spokesman subsequently claimed Mr Rudd did not mean he would replace Australian cars with imported hybrids, but wanted Australian manufacturers to build hybrid vehicles under his proposed Green Car Innovation Fund.

Government fleets are still largely made up of locally-produced vehicles, although some ministers have begun purchasing smaller imported cars such as the Toyota Prius hybrid.

Mr Gorman, who stressed he had not heard the original Rudd interview that triggered the furore, said local manufacturers could go out of business if governments switched to imported vehicles.

Left: Toyota Prius and Ford Territory (below).



“If you choose to buy a certain level of product, no matter what the product is, and it doesn’t come from your local manufacturers, and it substitutes for what your local manufacturers are building, the local manufacturers will either find another alternative or they will have to go out of business,” Mr Gorman said. “It’s that simple.

“Just think about it yourselves. If you don’t go to the local milk bar, because you are going to some shopping mall, then eventually the milk bar goes away.

“Now maybe that’s the best thing for the community, I don’t know, but I will tell you that the role that automotive manufacturing plays in this country is big and it is positive.”

While Mr Rudd was criticised for his comment about planning to stock government fleets with hybrid models, it was his admission that his government-supplied vehicle was a petrol-powered Ford Territory that saw him attacked in the mainstream media for driving a “gas-guzzler” while calling for action to counter climate change.

Mr Gorman said the description of the Territory as a “gas-guzzler” was inaccurate. “You have to put the facts out there. It is not as fuel efficient as a Fiesta, that’s a fact, but to say that it is gas-guzzling and irresponsible, I don’t think that is accurate,” he said.

“The vehicle provides flexibility, it provides (for) lifestyle, it provides carrying, a safety package, it provides a whole raft of things that consumers choose to buy. I think those who want to point to the government and say that you are irresponsible for doing this, frankly I think that’s irresponsible, because, I agree, the facts don’t get represented properly.”

Mr Gorman said Ford Australia was living up to its responsibility to work on ways to improve the fuel efficiency of all its locally-made vehicles.

“Within its segment we make very, very competitive vehicles, we are continuing to work on fuel improvements, we are continuing to work on reducing our CO2, we are continuing to work on new technologies and you will see a raft of new technologies in the coming years that are going to reduce the environmental impact of our products,” Mr Gorman said.

“We take this up with the government publicly and privately as the government is a strong customer for us.

“We do two things: one, we do the best we can to publicly point out what the facts are, and then privately we continue to work obviously with our customers to make sure they are aware of the facts and are making the right choice.”

Australian sales of locally-made models have taken a battering since 1996.

VFACTS figures show 74,556 fewer locally-made vehicles were sold in Australia in 2006 compared to 1996. Almost half of that reduction can be attributed to the cut in government purchasing of Australian vehicles, which dropped by 33,654.

Some reduction in government purchasing is to be expected given that some models that were produced here in 1996 are now fully imported. Government purchases of locally-made small cars, including the Toyota Corolla, stood at 6420 in 1996, but fell to zero by 2001 when supply was switched to Japan and South Africa.

Not all Australian-made models are suffering. Governments purchased 4230 locally-made light commercial vehicles in 1996, including the Ford Falcon and Holden Commodore utes, in 1996 and that figure increased to 5078 in 2006. Government sales of locally-made SUVs have also risen from 150 in 1996 to 2244 in 2006 thanks to the introduction of the Ford Territory and Holden Adventra.