Future of Australia's Automotive Industry
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The Senate Economics References Committee Future of Australia's automotive industry Driving jobs and investment December 2015 © Commonwealth of Australia 2015 ISBN 978-1-76010-332-3 This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/ Printed by the Senate Printing Unit, Parliament House, Canberra. Senate Economics References Committee Members Senator Chris Ketter (Chair from 22 October 2015) Queensland, ALP Senator Sean Edwards (Deputy Chair) South Australia, LP Senator Sam Dastyari (Chair until 22 October 2015) New South Wales, ALP Senator Matthew Canavan Queensland, NATS Senator the Hon. Kim Carr (until 14 May 2015) Victoria, ALP Senator Jenny McAllister (from 14 May 2015) New South Wales, ALP Senator Nick Xenophon South Australia, IND Substitute Members Senator the Hon. Kim Carr (from 14 May 2015) Victoria, ALP Senators participating in this inquiry Senator David Busby Tasmania, LP Senator Jacqui Lambie Tasmania, IND Senator John Madigan Victoria, IND Senator Ricky Muir Victoria, AMEP Senator Janet Rice Victoria, AG Senator Zed Seselja Australian Capital Territory, LP Senator Penny Wright (until 10 September 2015) South Australia, AG Secretariat Dr Kathleen Dermody, Secretary Mr Alan Raine, Principal Research Officer Ms Morana Kavgic, Administrative Officer (until 27 February 2015) Ms Ashlee Hill, Administrative Officer (23 February to 24 September 2015) Ms Sarah Batts, Administrative Officer (from 25 September 2015) Mr Michael Perks, Acting Administrative Officer (6 November to 27 November 2015) PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3540 Fax: 02 6277 5719 E-mail: [email protected] Internet: www.aph.gov.au/senate_economics iii TABLE OF CONTENTS Membership of Committee iii Executive summary ............................................................................................. 1 Interim report ........................................................................................................... 1 Policy development ............................................................................................. 1 Reforming the Automotive Transformation Scheme .......................................... 1 Final report ............................................................................................................... 3 Policy framework revisited.................................................................................. 3 Sales, service and repair sectors .......................................................................... 4 Automotive manufacturing .................................................................................. 5 Motor sport and motoring enthusiasts ................................................................. 6 Chapter 1.............................................................................................................. 7 Background to the inquiry ....................................................................................... 7 Conduct of inquiry .................................................................................................. 8 Submissions and public hearings............................................................................ 8 Background to inquiry ............................................................................................ 8 Scope of this inquiry ............................................................................................... 9 Interim report on the future of the Automotive Transformation Scheme ......... 10 Final report on the broader automotive industry ............................................... 11 Structure of this report .......................................................................................... 11 Chapter 2............................................................................................................ 13 Future trends affecting the automotive industry ................................................. 13 Australia will continue to depend on automotive transport ................................. 13 Industry undergoing unprecedented change ......................................................... 13 Coordinated policy approach required ................................................................. 17 Chapter 3............................................................................................................ 21 Sales, service and repair sectors ............................................................................ 21 Background ........................................................................................................... 21 Sales ...................................................................................................................... 22 Franchising ........................................................................................................ 22 Parallel imports .................................................................................................. 23 Servicing and repairs ............................................................................................ 26 Access to information ........................................................................................ 27 Service and repair warranties ............................................................................ 29 Smash repairs ..................................................................................................... 30 Automotive skills and training ............................................................................. 32 Formal training mechanisms ............................................................................. 33 Committee view ................................................................................................. 35 Chapter 4............................................................................................................ 37 Automotive manufacturing .................................................................................... 37 Future of automotive manufacturing .................................................................... 37 Policy settings are important ............................................................................. 39 Policy options to support automotive manufacturing........................................... 42 Automotive Transformation Scheme (ATS) ..................................................... 42 Automotive Diversification Programme (ADP)................................................ 42 Retaining engineering and development skills .................................................. 44 Affected regions may need additional support .................................................. 45 Aftermarket testing facility ............................................................................... 45 Enhancing truck manufacturing ........................................................................ 46 Chapter 5............................................................................................................ 49 Motorsport and motoring enthusiasts .................................................................. 49 Importance of motorsport and motoring enthusiasts ............................................ 49 Challenges facing the expansion of this sector .................................................... 49 Investment in motorsport infrastructure ............................................................ 50 3 Importation of specialist and enthusiast vehicles .............................................. 51 National harmonisation of vehicle standards .................................................... 52 Government Senators' Dissenting Report ...................................................... 57 Additional comments from the Australian Greens ........................................ 59 Additional Comments by Senator Nick Xenophon ........................................ 63 There is still petrol in the tank of Australian automotive manufacturing ........ 63 Additional comments by the Australian Motoring Enthusiast Party .......... 65 Appendix 1 ......................................................................................................... 69 Submissions and additional information received .............................................. 69 Answers to questions on notice .............................................................................. 70 Appendix 2 ......................................................................................................... 73 Public hearings and witnesses ............................................................................... 73 Executive summary Australia is a country that relies heavily on the automotive industry to overcome the tyranny of distance and achieve its potential through connecting people and places. With a growing population and aspirations of increasing economic growth and prosperity, there is no doubt that Australia's automotive industry will remain critically important. Australia has a long history of excellence in automotive manufacturing, industrial engineering and design. While automotive manufacturing is declining due to announced closures in motor vehicle production in 2016 and 2017, the future of automotive engineering and manufacturing is not in the hands of the car makers alone. Australia will have an automotive industry