The car assistance program instituted by Minister Button in the early 90s was misguided because it guaranteed taxpayers dollars for an industry which was labour intensive and played to our weaknesses rather than our strengths.
At that time when we should have been investing in processing our iron ore and bauxite to supply the world auto market rather than trying to compete with low wage countries of South East Asia or the high volume auto producres of Japan, Germany and the USA.
In the early 0s Ford was offered a deal to fit diesel engines in 3 test Falcons . This would have cost the company less than a $million to prove the concept but Ford flatley rejected the offer.
At the time Ford owned some of Mazda and fuel efficient Mazda diesel engines and adapted O/D transmissions could have been fitted to the Falcon at minimal cost.
Rural Australia and those who opted for diesel commercial vehicles due to the lack of large diesel cars would have picked up Falcon sales to a level that the model would have retained an economy of scale and extra value added.
Today's Ford announcement attributed low volume to the shrinkage of the big petrol car segment and this shrinkage has been obvious since the GFC and even earlier.
Today's Ford announcement has to cast a shadow over the two remaining manufacturers but in fairness to them they have taken some action to provide the market with cars that meet market needs:
-Toyota with its hybrids and Holden with the Cruze.
The general discussion , however, should be around lost opportunity of developing our strengths-our resources- and not pandering to our weaknesses which are high wages and a small market size which, in order to be economically viable, Ford had to produce premium cars at a competitive price and export at least 100,000 units/p/a to maintain an economy of scale.
Ford failed to do this. They went for a variation on the petrol Falcon in petrol Territory and petrol Falcon ute rather than a diesel models. Just look at our ute and 4x4 market......diesels are preferred and command a price premium.
The Government has to now go back to basics. We simply need a long term industrial development plan which is is realistic and based on our strengths; not our weaknesses.
Our traditional strengths have been to dig up minerals and coal efficiently. So it logically follows that we should be processing our iron ore, bauxite and copper to meet world secondary markets which would add Aussie labour and diversify trade.
