Green cars a cornerstone in Government $3.4 billion aid package to car industry

The government is to inject an extra A$3.4 billion ($2.3 billion) into the ailing car industry to offset tariff cuts and a global economic slowdown, Prime Minister Kevin Rudd said today.

Rudd said his government would proceed with long-standing plans to halve tariffs on imported cars to 5 percent in 2010 from 10 percent, while offering aid to help the A$7.7 billion industry cope with slowing sales amid global economic gloom.

“Some might say it’s not worth trying to have a car industry,” Rudd told reporters in Melbourne, where much of Australia’s automotive industry is based. “That is not my view, it is not the view of the Australian government.”

Rudd said Australia would outlay A$3.4 billion from 2011 to 2020 to transform the industry, including money for a “Green Car” fund to help automotive companies design and sell locally-made environmentally friendly cars.

The fund would see the government match industry investment in green cars on a A$1 to A$3 basis over 10 years from 2009.

Other funds would help consolidation in the auto parts sector and help suppliers boost capability.