MOTOR TRADE

Evening Post, Volume CXXX, Issue 76, 26 September 1940, Page 13

MOTOR TRADE

IMPORT LICENCES

FEDERATION'S PROTEST

"PLANTS WILL CLOSE"

Import restrictions on motor parts and vehicles during 1941, revealed in the import schedule for the fifth licensing period, would lead to the complete cessation of work in the assembly plants in the Dominion, the president of the New Zealand Motor Trade Federation, Mr. C. R. Edmond, stated today. Mr. Edmond also pointed out that the motor industry would be placed in a position where it would have difficulty in meeting the requirements of the War Purposes Loan, because that loan was based on earnings during 1939, which had been a good year in the motor industry. "On behalf of the motor Industry, the New Zealand Motor Trade Federation wishes to make an emphatic protest against the treatment meted out to the motor industry as revealed in the new import schedules which have just been published for the fifth period—l94l," Mr. Edmond said. "It might appear that the motor industry has received some consideration in that there has been a slight easing of the position in regard to spare parts and tyres for motorvehicles. The motor industry has consistently maintained that there should be no restriction on the importation of parts of motor vehicles, because people do not buy parts of motor vehicles for the sake of buying them —they only purchase them if and when necessary to keep their motor vehicles on the road. In times of restricted sale of new vehicles it is more essential than ever that the existing vehicles which are on the road should be kept in good running condition and this can only be done if there is an ample supply of parts available right throughout the Dominion. The same applies to tyres for motor vehicles. People do not buy tyres until they are necessary for the purpose of safety in keeping the vehicles on the road. THE MAIN ISSUE. "But we wish to draw attention to the main issue and that is the total prohibition on the importation of motor-cars for the fifth period, which' covers the whole year 1941. This will mean the complete cessation of work in the assembly, plants which have been established throughout the Dominion. In the statement made by Mr. Nash in explanation of the new import schedules he says that 'secondary industries had also to be provided for.' This evidently does not apply to the motor vehicle assembly plants. It should be remembered that these assembly plants were established for the purpose of creating and maintaining a really worth-while secondary industry in the Dominion. This policy was instituted . under the . previous Government and has been intensified under the present Government until today it is impossible to import a motor vehicle unless it be either in shell form or completely knocked down. Under this policy three big plants were established in the Hutt Valley by General Motors, the Ford Company of New Zealand, Ltd., and Todd Motor Industries, Ltd. Dominion Motors, Ltd., established a big plant in Auckland, and Motor Assemblies, Ltd., and Stevens Motors established plants in Christchurch. In addition to these a number of smaller importers established small plants in various towns in the Dominion. In doing this it was understood that this policy was in accord with the Government's policy of establishing secondary industries and a very large amount of capital has been invested in plant and equipment. "In the three main plants in the I Hutt Valley there were at the commencement of the war about 1500 employees. "This number has dwindled and it would seem now that the plants will have to close down completely. "It is admitted that in the import schedules provision is made for licences to be granted for the importation of commercial vehicle chassis in unassembled or completely knocked down condition. However, the quantity to be admitted is still obscure and in any case this type of assembly is not sufficient to keep the assembly plants in continuous operation. MANUFACTURERS READY. '•The position would be more understandable were it not for the fact that recent special appeals have been issued by at least two of the 'big three' motor manufacturers in England asking their New Zealand distributors to do their very best to assist them by sending orders for cars to England, so as to help keep the export market going. The following is an extract from a let-

ter received from one o£ these big motor manufacturers: Once you can get licences we can supply. I would like to see you tackling this business in your, usual wholehearted fashion. Our capacity to produce has been lifted to such a vast extent that the time will come when we must have a healthy flow of orders to start with. Everyone is working extremely hard and all efforts are concentrated on production. "Following on the publication of the schedule of import licences, we have today the publication of the terms of the compulsory loan which is based on income earned for the year ended March 31, 1939. This was a good year in the motor industry and it would be fair to state that a large amount of income tax was paid, by the industry for that year. Seeing that no licences for the importation of motor vehicles were granted for the period JulyDecember, 1940, and now that the decision has been made that no motor-cars can be imported for the whole of 1941, it is extremely difficult to see how the motor industry can pay its share of the compulsory loan on the basis of income earned during a period when such restrictions did not apply. The capacity to pay is an issue, but there is also the question as to whether it is fair of the Government to ask the industry to pay when it is prevented from earning by total restriction imposed by the Government.

"It is surely a tragedy when a big secondary industry such as the motor assembly industry in New Zealand can be completely put out of business by the arbitrary action of the Minister of Customs."