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Association seeks support for local automotive aftermarket component manufacturers

The Australian Automotive Aftermarket Association (AAAA) is calling on the Federal Government to recognise and support Australian automotive aftermarket component manufacturers.

AAAA Executive Director Stuart Charity (pictured alongside) said his Australian based manufacturing members that supply the automotive aftermarket are not eligible for any support under Federal Government programs designed to promote innovation, green initiatives and export opportunities in the automotive industry.

"It seems Canberra only includes the aftermarket in the automotive industry when it spruiks total employment and export figures. But the Federal Government knows the aftermarket makes a huge contribution to Australia's economy. Our 1,700 members turn over $11 billion a year, export $800 million worth of product and give 30,000 'working Australians' a job," said Charity.

More than 300 AAAA members manufacture automotive products in Australia. The AAAA has requested support for its manufacturing members through the Federal Government's new heavily promoted $35 million Automotive New Markets Initiative. The response was that only manufacturers selling to Australia’s three vehicle producers and their direct suppliers can apply.

The AAAA believes the Federal Government is defining the "automotive industry" according to who the customer is. "It seems that if you don’t sell your Australian manufactured car parts to a multi-national car company, the Australian Government does not consider your business to be part of the automotive industry," said Charity.

"When the AAAA challenged the Federal Government, we were advised that it is 'long standing government policy' to support only those supplying local vehicle manufacturers.

“Australian aftermarket manufacturers are delivering globally competitive, innovative products as well as employment, exports and economic wealth to Australia with limited assistance from Government. There is however no doubt that the pressures on our highly trade exposed manufacturers are significant and we need to act quickly and decisively to secure our manufacturing base in the longer term.

"If we lose these manufacturing jobs off-shore due to a lack of Government support they will be gone forever,” said Stuart Charity.

Locally made vehicles are now only about 14% of the one million new cars sold annually in Australia. Local vehicle production volumes continue to shrink and so far this year two of the three local vehicle manufacturers announced workforce reductions by a combined 790 people. The production cuts will also have direct impact on local suppliers and their employees.

Against this scenario, the estimated 2.3% annual growth in Australia's car parc will result in a total of about 17.1 million cars by 2015. By then, the age of Australia's car parc will increase from an average of 10 years to 10.7 years. These aging vehicles provide a growing market for aftermarket replacement parts. In addition to local market growth, aftermarket exporters are creating new overseas opportunities.

"The Australian automotive aftermarket is creative, hard working, technically sophisticated and effective in developing high value niche products in the global market. Australian aftermarket manufacturers are proven players in local and export markets, including Asia, Europe, Middle East and the USA,” said Charity.

"In contrast to the Federal Government, the Victorian and New South Wales Governments have consistently supported aftermarket manufacturers' export endeavours. In the past year, more than 80 AAAA member companies participated in trade missions to five countries. With sold out AAAA trade missions to the Middle East, Europe and the USA planned this year, the number of participants will be significantly higher.

"It is clear that the Australian Government is not in tune with the nation's automotive industry. During the 1980s and 1990s supply of components to Australian based vehicle builders was the main game. Now the economy has changed, consumers have changed, cars have changed, and this is forcing the industry in Australia to change. One sad result is that the vehicle manufacturing channel has narrowed.

"This massive industry change must be accepted. And the Federal Government must also accept the Australian automotive aftermarket as part of a new and different Australian automotive manufacturing industry. It must be an industry focused on innovation and export," said Charity.

"The AAAA is not seeking special subsidies or co-investment funding from the Australian Government. Aftermarket manufacturers simply want equal access to Federal Government automotive industry programs that support innovation and export," said Stuart Charity.

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