Optimism: VACC executive director Geoff Gwilym believes Australia could become a hub for low-volume, hi-tech vehicles but must act within the next decade while there is still a wealth of expertise and skill available.

THE $100 million federal assistance package for advanced manufacturing announced this week has prompted the Victorian Automobile Chamber of Commerce (VACC) to predict that Australia could become a hub for low-volume, hi-tech vehicles.

The new funding was also welcomed by a long-established parts-maker MtM Automotive, which has recently won six new contracts in China for its door checks, but chief executive Mark Albert stressed that entering new markets costs as much as developing new products.

Industry minister Arthur Sinodinos unveiled the new package ahead of Tuesday night’s federal budget, saying the aim was to help the manufacturing sector create jobs, grow businesses, improve productivity and become globally competitive.

VACC executive director Geoff Gwilym, whose industry body has assisted parts-makers since the demise of the Federation of Automotive Products Manufacturers (FAPM) in 2015, said Australia had to stop mourning the death of high-volume car manufacture and start looking at how it can utilise its design and materials expertise to get back into car-making.

He said the country should aim to start manufacturing hi-tech and new-tech vehicles within the next decade while there was still a wealth of expertise and skill available.

“The emergence of electric vehicles and new vehicle body materials may make it viable to build low-volume, high-quality passenger vehicles again, and possibly within the decade,” he said.

“We understand high-volume vehicle manufacturing is leaving our shores and we are very disappointed in that outcome.

“We should, however, stop talking about the closure of the automotive manufacturing industry and, instead, focus on the vibrant specialist and commercial vehicle industry, which is still here and doing very well.”

Mr Gwilym said developments in electric drivetrains and lightweight materials, both areas where Australia had demonstrated expertise, could allow Australia to become a viable source of advanced vehicles.

He was particularly pleased about the $5 million that will be directed towards university technology courses to ensure a continued flow of automotive design and engineering graduates.

“VACC supports funding for automotive engineering and design students as this is one of the key strengths that Australia has brought to the global manufacturing space,” he said.

“It’s not just current manufacturers who will need to modernise many aspects of Australia’s manufacturing industry – it is new entrants and young graduates who will leave their studies with a different view of the manufacturing space, and consequently will need to work with a global mindset.”

MtM Automotive chief executive Mark Albert

MtM Automotive, which supplies door checks to GM Holden and Toyota, welcomed the funding assistance for manufacturing but pointed out that developing innovative new products was just half the battle.

“Any funding that allows manufacturing to be more innovative and curb the additional costs of early risks has to be a good thing,” said MtM Automotive chief executive Mark Albert.

“Where organisations already have a toehold in another market these recommendations will allow Australian companies to become more competitive and hopefully achieve a greater market share: all positive outcomes.

“Unfortunately, being innovative does not automatically mean being more successful. More assistance needs to be provided to support companies enter new markets. The world is not level.”

Mr Albert said the cost of entering a new market was often as expensive as the research and development that goes into an innovative product.

“If you have a new product or improved widget it does not mean success automatically follows,” he said.

“There are a range of improvements needed across a wide array of areas including the government’s ability to be less risk averse. Hopefully this is the first announcement of many to come.”

By Ian Porter