Car parts firms fear -destruction’

Press, 25 November 1982, Page 10

Car parts firms fear -destruction’

PA . Wellington Automotive component manufacturers say that. the industry would be destroyed by the Industries Development Commission’s motor industry restructuring plans. They told the commission that its draft recommendations would not be conducive to the continued development of an efficient motorassembly and componentmanufacturing industry. The Component Manufacturers’ Federation senior vice-president, Mr Bruce Gibbs, said the implementation of the commission’s

draft report would ultimately lead to the destruction of the industry. The recommendations which would lead to that were the volume proposed for local assembly, and the method of price comparison between overseas and locally sourced components. “The 70,000 units proposed to be sequestered for c.k.d. (completely knocked down) assembly will effectively act as the maximum level of c.k.d. production in New Zealand. “This arrangement will leave no scope for growth of ikn trahi/ola ocoamhhr end

associated component manufacturing industry in New Zealand,” said Mr Gibbs. He told the commission, which was hearing submissions on its draft industry plan, that the proposed method of price comparison was not a fair basis'for the assessment of the component manufacturing industry. A federation proposal for market sharing between locally assembled and builtup cars was one of shared market growth, he said. The proposal provided for a minimum number of 3000 built-up car imports. Above iknf QF»d tho 7fi nnn QAflllPC-

tered for local assembly, annual growth would be shared on an 80:20 basis between c.k.d. and c.b.u. (completely built up) cats. A second federation proposal required that there be a fair validation of overseas component prices. “We do not support the concept of averaging of component prices. The federation proposes that any price comparison must be made directly, and individually,” he said. Any protection based on tariffs would also ultimately dostrnv fhA iniilistrv.

The proposed plan did not give time for component manufacturers to adjust to new circumstances. The commission’s proposals did not cope with the method of redeploying industry resources, particularly at a time of recession in the motor industry, said the federation. Nordic Motors, Ltd, which is to take over the Volvo truck and bus franchise from Dalhoff and King (New Zealand), Ltd, which went into receivership earlier this year, told the commission that its draft report had concentrated on the car in-

dustry. Little individual consideration had been given to the heavy truck and bus industry in its development of the commercial vehicle plan. “This industry is very specialised and constitutes a small, though important, segment of the total New Zealand vehicle industry,” said the company. The company disagreed with the recommendation for a revised customs tariff rate structure.

Tariff rate changes would lead to a virtual monopoly for Japanese importers. Sudden changes, as recommended by the commission, would lead to confusion in the industry, a lack of confidence, and would have an extremely deterimental effect on the efficiency and profitability of many companies, it said.