Holden has warned Federal Government policies and proposals have cast doubt over the sustainability of Australia’s car industry in the long term.
- shares

Holden CEO Mike Devereux said the abolishment of the Green Car Innovation Fund (GCIF) and an impending carbon tax will put Australia – already an expensive country to manufacturer cars – on even shakier ground from a long-term manufacturing perspective.

"It also is a country with virtually zero import tariffs, so you've got relatively high costs, zero barriers to entry," Mr Devereux told ABC News."In order for it to make sense to make things here there needs to be some, what I consider, some smart industry policy, which there was just a few years ago."

Mr Devereux said a carbon tax could increase the price of doing business in Australia by as much as $40 million to$50 million every year, and suggested there might need to be a “co-investment scheme” to offset some of those costs.

"We're raising the cost of doing business in this country whilst other countries around Australia might not be doing the same thing,” he said."There's no question that we have to reduce emissions ... but there has to be some public-private partnership to negotiate what are fairly rocky shoals here."

Holden endured $579 million in losses between 2005 and 2009. In 2010, it recorded a $138 million before-tax profit, although with almost $160 million of government funding and foreign exchange windfalls included in this figure, the actual result without taxpayer funding and currency movements was more like a $20 million plus loss.

You can read all about the future of the Australian new car manufacturing industry in our recent editorial, as well as the state of Toyota Australia – our country’s largest vehicle seller, manufacturer and exporter.

What do you make of Mr Devereux’s comments? Do you agree that there needs to be more support for the three local manufacturers, or do they need to be able to fend for themselves in the long-term?

Feel free to share your thoughts in the comments section below.