Australian government announces $4.3 billion auto industry aid package

The Australian government has announced today a US$4.3 billion rescue package to bailout the country’s struggling automotive industry. The package will be distributed over a period of 13 years, between now and 2021, and is designed to allow the industry to breathe during the current financial crisis.

The main instrument of the package is the ‘Green Car Plan’, which is similar in nature to rescue package about to be given to the U.S. auto industry. Australian Industry Minister Kim Carr justified the bailout package in line with these international similarities, and argued that the automotive industry in Australia indirectly employs around 200,000 workers - 1/50th of the local labor force.

The injection of funds is expected to increase investment in new technologies, with the goal of the program being to get new technologies introduced rapidly and more fuel-efficient vehicles on Australian roads – and export markets - within the next 18 months.

However, along with the additional aid, the government also confirmed it would halve car tariffs to 5% from 10% in 2010.

The Australian auto industry produced 327,984 vehicles in 2007, 5% fewer than in 2000. The three major vehicle producers, General Motors Holden, Toyota, and Ford, also generated net losses of $449 million last year.