What is it about the Australian motor vehicle industry? Why do its spruikers seem to think a bit of government input will solve everything, so long as a fat, no-questions-asked cheque is enclosed in the mail?

Oil surges past $US138 a barrel and Kev sledges OPEC. Next he’ll be blaming “speculators and big oil”, rather than the cynical posturing of an ambitious Israeli minister, the deepening US slowdown and no let up in rising demand from emerging economies like China or India.

As well, there are production problems in all but three of OPEC’s members: Only Saudi Arabia, Kuwait and the UAE have the necessary flexibility to boost output. Iran, Mexico and Venezuela can’t because their state-run industries haven’t invested; Indonesia has fallen so far behind that it is now leaving OPEC. Iran imports more than half its petrol and sells it at subsidised prices!

Just look at what’s happening with the real world of the American car industry: Chrysler is a basket case and may not survive for its private equity owners and General Motors and Ford are busily reshaping their businesses before US consumers kill them off. The smarter Toyota will be forced to follow suit by cutting production of the Tundra, the SUV gas chewer that it designed expressly for the US market.

And why? Survival! No need for a government report or plan. And to think, it was only a few months ago that the US car industry — and its paid mates in Washington and friends in the US Congress — killed off a government plan to try and force them to improve the fuel efficiency of their cars.

No lobbying now: it’s every rat for him/herself.

And yet, there’s the timid Rudd Government and all the mouthpieces for the car industry (such as the Federated Chamber of Automotive Industries) moaning and groaning because some dared to voice a rational opinion about a very irrational idea: Labor’s idea for a green Australian hybrid.

Why don’t they import a lot of Toyota hybrids and paint them green at Toyota in Melbourne and call them Australian?

And guess what, that’s what they are doing andwhat will be announced later today in Japan. Some hybrids to be produced here as a sop — around 20,000 — but more importantly, Toyota will be producing the same model from a plant in Thailand to feed Asian and other markets, oh, and Australia too, because there’s that Free Trade Agreement between Thailand and Australia and no nasty tariffs. That’s a legacy of the Howard Government’s gutless stance on multi-lateral trade negotiations and its eagerness for easy wins on a bi-lateral basis.

No-one seems looking at what is an obvious question: does government policy hinder or help the over-consumption of petrol in this country?

This lack of interest in researching difficult stories was underlined by the reception given to a Productivity Commission report on hybrid cars.

The SMH reported late last week: “Lower import tariffs on four-wheel drive guzzlers are discouraging Australian car makers from building more fuel-efficient vehicles, a government report argues.”

“As petrol prices to continue to soar above $1.60 a litre, the Productivity Commission says heftier tariffs on passenger cars are skewing domestic car production towards larger, family-sized models even though consumers want more fuel-efficiency.”

“(This is) blunting the incentive for the industry to respond to changes in buyer preferences … environmentally-conscious buyers of the Toyota Prius petrol-electric hybrid car are slapped with a 10 per cent import tax.”

But it didn’t need the Productivity Commssion to tell us that there’s a discrepancy in tariffs and has been for years: it was originally put in place to help farmers and the rural sector (Range Rovers qualified for years). It’s how the Toorak tractors are imported and why Toyota imported and sold 42,000 Hi Lux four wheel drive (mostly diesel) pick-ups last year. It’s a lurk and the Howard Government did nothing to shut it off and it seems Rudd and no-one else will change it.

The screams might be too loud, especially from the Petrol Party leaders, Brendan Nelson and Malcolm Turnbull.

The most predictable reaction came from the car industry lobby group, the Federal Chamber of Automotive Industries and its chief executive Andrew McKellar who said the Productivity Commission’s argument that higher tariffs for passenger vehicles had discouraged domestic small car production was flawed.

He pointed to Ford’s decision to manufacture the small-medium Focus model in Australia from 2011, and argued that Toyota’s locally-produced four-cylinder Camry was not a large car. “I just don’t accept what the commission is suggesting there … it’s a purely speculative argument,” Mr McKellar said.

Tell that to GM and Ford in the US: no plans or government help, just the reluctant realisation that years of business strategy and lobbying against fuel efficiency were being undermined in the market place by consumers ditching their gas guzzlers. So some brutal change was ordered.

That’s what’s missing here: Holden is closing its Melbourne engine plant because of a change in government policy. Why should the Federal Government want to adopt a plan (especially when the Victorian left wing planner Senator Kim Carr is involved) when at least two companies that would benefit are making huge changes to policy in their home market?

And where are the motoring journalists in the daily and weekly papers and in the car magazines? Shouldn’t they be reporting on the lurks the car companies get up to and the flaws in Government policies? Or do the car ads and junkets mean too much to them and their employers?

Australian consumers are being dudded by the Government, the car industry, oil companies and much of the media.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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