Cheaper Aust.-made cars likely in New Zealand

Press, 2 June 1984, Page 12

Cheaper Aust.-made cars likely in New Zealand

NZPA staff correspondent Sydney New Zealanders should ultimately get cheaper Aus-tralian-made cars and parts under Australia’s big car industry restructuring plan, according to industry and trade sources. The reorganisation could also see some big orders for parts going across the Tasman from Australian car builders battling to compete with cheaper imports. Australia’s five manufacturers are still working their way through the implications of the Government plan. But it has been generally welcomed and is expected to mean cheaper cars. Industry and trade sources agreed that whatever was good for the Australian buyer would eventually be good for New Zealand buyers—particularly with the introduction of free trade under closer economic

relations. The New Zealand Government has been wrestling with the Industry Development Commission plan for its own vehicle industry for more than a year. What New Zealand does with its industry is of vital concern across the Tasman because New Zealanders buy ?AlOO million worth of Australian vehicles and components each year. It also plays a key role because of the system of export credits which allow Australian manufacturers to include more foreign-made gadgetry if they export. The system is on a dollar-for-dollar basis and will be kept in the new package largely at the insistence of the ailing General Motors-Hol-den group, by far Australia’s biggest exporter. Talks have already been held between the two governments on how both industries will cope with

C.E.R., and the Australians are edgy in case New Zealand tightens up imports before the Australian industry has had a chance to sort itself out. The deadline for settling the matter is 1995. On the other hand, the Ford company in Australia has until now exported little. But it has recently announced plans for two new plants which will push it further into the export business. The three Japanese manufacturers in Australia, Toyota, Nissan, and Mitsubishi, are expected to be the victims of the Government’s plan to crunch the five car builders down to a maximum of three. However, spokesmen for each company declared they would not be the ones to go. None of the Australianbased Japanese trio export cars to New Zealand, with vehicles for that market coming direct from Japan.

If the worst happened, none considered shifting to New Zealand and exporting back. The most likely result of the Australian restructuring will be the merging of interests. In the United States, General Motors and Toyota are already discussing common productions, and in Australia Nissan is about to launch a variant of the Pulsar for GM-H. Several manufacturers saw the rationalisation meaning more orders for short-run speciality items going to New Zealand while a spokesman for Nissan held out the possibility of an even bigger role. He said that Nissan’s Japanese headquarters had been looking at rationalising company operations in the Pacific Basin, and this could see bigger production runs for some components from New Zealand, particularly aluminium goods. Under the restructuring

and C.E.R., such goods could quickly find thenselves in Australian-built vehicles. The Australian Trade Minister, Senator John Button, said the basis of the plan was that Australia was too small to support five car makers, and that left alone the car industry would eventually strangle itself. The Government wants the five manufacturers cut to three and the present 13 models made cut to six at the most. It is setting up an Automotive Industry Authority to oversee the restructuring, is providing design and research grants, and threatening penalties if the manufacturers do not comply. Apart from combining models, suppliers will also be encouraged to standardise components and aim for longer production runs.