Market for car parts in jeopardy

Press, Volume CXVI, Issue 34041, 3 January 1976, Page 2

Market for car parts in jeopardy

f.Vew? Zealand Press Association—Copyright/ SYDNEY, January 2. Further talks between Australian and Japanese interests on a plan to manufacture four-cylinder car engines in South Australia will be held in Tokyo next week, amid rumours that the new .Australian Government is keen to scrap the idea.

The plan would have ramifications for New Zealand, since New Zealand would be asked to buy Australian - made smaller cars, and in return would be offered greater opportunities than exist at present to supply components for Australian-made cars. Originally proposed by the Labour Government, the scheme envisages a consortium of the Chrysler, Nissan (Datsun), and Toyota companies, and the Australian Government. The consortium would manufacture four-cylinder car engines, which at present are not made in Australia. The two Japanese companies have never been keen on the idea, but have gone along with it to preserve their hold on the small-car market in Australia.

Examination Australia’s new Minister for Industry and Commerce (Senator Robert Cotton) yesterday denied suggestions that the Government has already abandoned the SAustlOO million scheme. He said that a final decision would not be made until a "critical examination” had been made of the project.

The talks will be held in Tokyo next week, and both Chrysler and Senator Cotton’s department will be represented. The talks will help the Australian Government to decide whether it can afford its share of the establishment costs of the project — through the Australian Industry Development Corporation—when the new Government is trying to reduce State spending. The meeting will also help the Japanese companies to decide how best to approach the Australian ruling that the Australian component proportion of 60 per cent must be increased to about 85 per cent.

N.Z. talks Australian car makers have had a difficult year but, imports being cut heavily in 1975, they appear to have survived it, and will look for advice from the new Government on the future. Talks between Australia and New Zealand on trade in cars and components are likely to resume within a few months.

The talks, held up for many months because of uncertainty in the Australian industry, had made some progress late last year when they were delayed again by the two General Elections, and the appointment of new Ministers.