The Australian Financial Review quotes senior government sources that claim Holden has told the government the business case for an expanded export program is not economically viable.
Last month, Prime Minister Tony Abbott said his government would continue to offer a “high level of assistance to the motor industry” but said the car makers would in turn need to reveal plans for increasing export volumes.
Industry Minister Ian Macfarlane toured Holden’s Elizabeth assembly plant last week and met with the manufacturer’s chairman and managing director, Mike Devereux, to begin discussions about its manufacturing plans beyond the current government co-investment deal that ends in 2016.
Macfarlane (above) reportedly set Holden a 30 per cent export target – roughly double its current rate – but yesterday admitted he was not sure what level the car maker could realistically achieve.
“I don’t know what’s unrealistic and what’s not,” Macfarlane said.
“We want to see Australia have an internationally competitive car industry. We want to see Australia exporting cars all over the world.”
One government source told the AFR the decision on financial assistance for the car industry may now need to be made by the Prime Minister, with Macfarlane and Treasurer Joe Hockey butting heads over the issue.
“Joe will push back against Macca,” the source said.
“This is going to be one for Tony to decide. Either he’ll come up with a deal or he doesn’t.”
Macfarlane has asked for the Productivity Commission to prepare an interim report before the end of the year to help the government make informed decisions about the industry ahead of the release of the full report due later next year.