Australian car makers must shift to greener vehicles - KPMG

Fuel misers like the Civic Hybrid have caught buyers' eyes in Australia.

Global accountancy firm KPMG has said that the Australian federal government should offer Australian car makers tax incentives to build greener vehicles, including hybrid electric cars and clean diesel vehicles. With fuel prices expected to rise again, the firm has warned that consumer trends are shifting permanently towards more fuel-efficient vehicles, a market segment currently best served by imports.

Local vehicle manufactures already receive significant federal government assistance including grants for specific projects such as the AUD$52 million (US$40.6) to Ford Australia to assist in the development of a diesel Falcon. GM Holden have also received a recent grant of AUD$6.7 million (US$5.2) to improve the fuel economy of the recently released VE Commodore.

Traditional Australian vehicles like the six and eight cylinder Holden Commodores and Ford Falcons have struggled in recent times with a massive sales shift towards smaller and cheaper to run vehicles. Sales of SUVs and four wheel drive vehicles in particular have been heavily hit by rising fuel prices. KPMG's global senior vehicle company executive survey overwhelmingly pointed towards hybrids being the growth sector of the auto industry over the next few years.

Analysis: Japanese car manufactures still have the lead in hybrid technology and are catching up quickly on clean diesel technology as well which puts them in a good to capitalise on recent Australian market shifts. Little has been done to bring hybrids or clean diesels to market by the local manufacturers and it looks like that could cost them dearly. Big, comfortable cars with lots of space and power are nice but people's fuel budgets wont expand indefinitely to accommodate the extra convenience.


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