Australian car makers need change, not more of the same

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The Australian auto industry has been asleep at the wheel. And until it wakes up to the changing climate, the job losses will continue.

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Australian-based motor vehicle manufacturing will continue to decline as long as the industry’s own advocates insist Australian vehicles remain uncompetitive in the emissions and fuel efficiency stakes – a reality illustrated by the the loss of 440 jobs, announced by Ford Australia on Tuesday.

The Sustainable Energy Association of Australia (SEA) has long argued for stronger measures on National Average Fuel Consumption numbers for new passenger vehicles. SEA has previously suggested three-year rolling targets on maximum fuel consumption, but successive federal governments have dragged their feet on setting mandated energy efficiency targets for the national vehicle fleet, and contained their aspirations to less than modest gains, and this has no doubt impacted negatively on the competitiveness of local manufacturers.

The Australian car industry has been asleep at the wheel of its V8 cars, and not noticing the changing climate. Five years ago to the month in July 2007, the headlines were screaming the closure of the Ford plant building six cylinder engines; of Mitsubishi trying to make its big cars float in an ailing market. At the same time, GM Australia trumpeted that it was “pinning its export hopes” on the 8 cylinder Pontiac – a move that was described as the “Australian automotive manufacturing sector … being transformed into an outward looking, internationally competitive … industry” – a move that was financially supported by the then Howard government.

Market commentators commonly say Australians are only interested in large cars, but Holden Commodore, which was Australia’s top seller for 15 consecutive years between 1996 and 2010, is now in fifth place.

Resistance to change from the automotive industry has come with claims that increased fuel efficiency in vehicles will come at a higher vehicle cost. But the sales data from Europe says otherwise – CO2 emissions from the average new car sold in Europe dropped to the milestone figure of 140g CO2/km in 2010, and is likely to hit 130 g/km CO2 target several years in advance of the 2015 target, while retail prices of motor vehicles have fallen every year in real terms.

In Australia, small and city cars now dominate the largest proportion of sales, filling nine of the top 15 places; the Ford Falcon is now in 20th place.

Others argue that the move to SUV’s is not about fuel efficiency, but even in the four-wheel-drive market, sales of small and medium off-roaders are now more than half of the SUV market, compared to only one third in 2004, and with an increasing share of these being high-efficiency diesel engines.

But there are also other potential game-changers coming. The adoption of EVs will, in reality, have more rapid transitions favoured by government policy measures and regulation, buoyed by consumer sentiment, targeted by corporate and government fleet managers, and soon to see increased demand as reduced vehicle costs will combine with a high oil price bring real price advantages to electric motorists.

If the adoption rate of electric vehicles follows that of other motor vehicle technologies, electric vehicles – even at a modest cumulative adoption rate of 5 per cent per annum from 2015 – could well exceed 25 per cent of new car sales by 2020, and more than 50 per cent of new car sales by the mid 2020s. Meanwhile, the Australian car industry apparently has no plans to build electric vehicles in Australia.

Not just cars:

Separate targets should impact on commercial transport vehicles – measures such as this will reduce running costs of Australian vehicles on imported fuels and reduce inflationary pressure on transported goods.

Not just vehicles:

Australia must also tighten fuel quality standards to catch up with the implementation schedule Euro Standard, to ensure we have cleaner burning fuels and that higher efficiency vehicles are not compromised by lower Australian fuel standards.

Greater enforcement of road rules and operating standards is needed in all states to remove unroadworthy vehicles by regulatory action, and also should be aided by measures that prevent re-licensing of unsuitable expired-licence vehicles.

Sustainability takes into account many factors – fuel efficiency and lower emissions is an important part of the equation, and so too is road safety.

There have been significant gains in the design of vehicles in the past decade, driven primarily by innovations from the European market. Vehicle safety has changed substantially in the last 10 years, following the adoption of new safety standards in Europe (European New Car Assessment Programme, or Euro NCAP) with the emergence of dual airbags becoming standard equipment for many passenger cars, and vehicle emissions for vehicles in the European market have also been substantially reduced.

People should not be surprised to hear that car accidents and the injuries they can cause are not a sustainable outcome.

Action to actively remove polluting vehicles from Australian roads has the potential to reduce air pollution (higher standard engines in vehicles); carbon emissions (fuel efficiency in vehicles); out of pocket expenditure (fuel efficiency in vehicles); motor vehicle accident occurrences (safer vehicles); motor vehicle accident injuries (safer vehicles); hospital queues (safer vehicles), and lung diseases (cleaner city air).

A study from the from The University of Western Australia and Telethon Institute of Child Health Research has highlighted, in particular, the effects of vehicle-sourced pollutants on the growth of unborn babies, and adds to older studies that show impacts on the developing lungs of infants and children.

According to the World Health Organisation (WHO), diesel engine exhaust fumes from commercial vehicles and industrial generation, and from older passenger vehicles, can cause cancer in humans and belong in the same potentially deadly category as asbestos, arsenic and mustard gas. The latest technology diesel engines meeting European emissions standards are making use of ultra-low sulphur diesel fuel, advanced engines and emissions control systems, and are near-zero emissions for nitrogen oxides, hydrocarbons and particulate matter – however these standards are not applied to commercial vehicles.

Top 15 Best-selling Australian Vehicles – 2012 6 months to June 30

• Mazda3 – 21,813

• Toyota HiLux – 19,412

• Toyota Corolla – 19,026

• Holden Cruze – 16,437

• Holden Commodore – 15,860

• Hyundai i30 – 14,000

• Nissan Navara – 13,180

• Toyota Camry – 10,948

• Toyota Yaris – 9836

• Mitsubishi Triton – 9686

• Toyota Prado – 9320

• Mazda2 – 9043

• Ford Focus – 9000

• Volkswagen Golf – 8697

• Mitsubishi Lancer – 8405

Top 10 Best-selling Australian Brands – 2012 6 months to June 30

• Toyota – 106,035

• Holden – 56,183

• Mazda – 52,133

• Hyundai – 45,306

• Ford – 43,430

• Nissan – 39,879

• Mitsubishi – 31,139

• Volkswagen – 26,966

• Subaru – 21,341

• Honda – 16,153

Professor Ray Wills is a Board Member of and chief adviser to the Sustainable Energy Association of Australia, an Adjunct Professor at The University of Western Australia, and a Director of advisory firm Smith&Duda

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