With the withdrawal of Toyota, the Productivity Commission will now focus on parts suppliers.
The Productivity Commission will turn its attention to salvaging Australia’s languishing component supply sector in the wake of Toyota announcing its manufacturing exit in 2017.
Federal industry minister Ian Macfarlane has asked the Commission to channel its energy on the last remaining facet of the industry beyond 2017, which currently comprises about 150 individual companies and more than 30,000 immediate jobs.
Component suppliers have expressed fears they may not survive the next two years – ahead of the respective closures of Ford, Holden and Toyota - unless the Abbott government intervenes with constructive assistance measures.
The risk of losing further scale because of dwindling local car sales could force many parts suppliers to close early, with little scope for production outside of the domestic market.
Mr Macfarlane said the Commission would focus primarily on parts makers ahead of its final report due to be handed down on March 31, with an increased emphasis on the potential for exporting.
"There are some very world class component suppliers, both to Toyota and of course to Ford and Holden, but also who are already exporters," Mr Macfarlane told the ABC.
"So we need to see what we need to do to position them to be able to continue that export and to grow the component obviously of export to 100 per cent."
A pre-election promise from the Coalition, the Productivity Commission report has been forced to significantly change its direction since the first terms of reference were released last year, first because of Holden’s closure in December and then by Toyota’s announcement.
Earlier this week, the Federation of Automotive Products Manufacturers said the government needed to help parts suppliers by “buying them some time” with considered assistance packages.
Mr Macfarlane said he wouldn’t be rushed into producing a jobs plan for the ailing auto industry, and would first allow the Commission to recommend the best options for parts makers.
It’s likely the Commission will also pay attention to the high wages of car makers and parts suppliers, a factor in Toyota’s recent announcement that it would cease manufacturing.
On Wednesday, Toyota released a statement refuting suggestions that unions and high wages were the primary cause of the closure of its Altona factory in 2017.
“Toyota Australia has never blamed the union for its decision to close its manufacturing operations by the end of 2017, neither publicly or in private discussions with any stakeholders,” the company said.
“As stated at the time of the announcement, there is no single reason that led to this decision.
“The market and economic factors contributing to the decision include the unfavourable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base.”