EMBARGO: 6:00 pm

Jj. AUSTRALIA,,.> -

PRIiVIE M IN IS T E R

FOR PRESS :  11 MARCH 1979

ELECTORATE TALK .

One of the most exciting'industrial projects of the present  time is the development of the world car. The world  automotive industry is going through a period of dramatic  change which will intensify throughout the 1980's. Increasing costs, together with demand for more fuel . efficient vehiclesare encouraging integration of operations

and the use of common vehicle components on a world basis.

The world car concept involves production by related companies  in different countries of cars with common design factors. Over the next decade, the industry will be putting a huge  effort into the design and production of smaller, lighter  and more,fuel efficient cars. ,  Ã¢ÂÂ   .  .

Front wheel drive, transverse enginestogether with electronic  parts will become common. "Production of component modules  -- such as traris-axles,  engines and ignition equipment —  will  takeÂ· place in-specialised facilities. ,  They will be produced

on a scale designed to minimise costs.  These facilities will  be located throughout the world, where the best comparative  advantages can be obtained.

With five manufacturers operating in a small market the  Australian industry has lacked access to scale economies  and opportunities for specialisation. This has inhibited  productivity and quality improvements and has limited the

ability of Australian manufacturers to compete in both domestic  .  and export markets.  .

The Australian vehicle industry needs to respond to the new  challenge.  Their product must be attractive to the Australian  market compared with imports, less costly to produce in  Australia, and have greater export potential.

The .best way the industry can ensure its future prosperity  is to reduce costs and increase competitiveness through large  scale export activities. Australia is responding to these  challenges with its entry into the world car scheme. General  Motors-Hoiden, for example, is planning a $210 million four-  cylinder engine complex in Victoria. This new plant will be

one of four such plants throughout the world producing engines  for a world car. .

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It is great news for. Australia that two-thirdsÂ· of the: output  of the Australian plant will be exported: to Europe. .  I am  confident that this is only the first stage and that other  sectors of the Australian motor vehicle industry will follow  in this export drive. .  .

Today, there is a high standard of design and craftsmanship  in our motor Vehicle industry.  We are building world-class  products —  and for that Australian workmen and Australian  engineers can take a good deal of pride.

Some changes have been made to the Government's motor vehicle,  plan to encourage these new developmentsÂ·. TheÂ· Government  has approved these changes because it believes the longer-term  viability and competitiveness of the local industry will be

enhanced and cheaper cars offered to consumers. On top of  that it will result in greater work security for more employees  than would otherwise be the case. .  ....Â·Â·

The Government has: made many other moves in the past few years  to assist Australian firms to get into export. We have . introduced a new Export Expansion Grant Scheme, improved  the Export Market Development Grant Scheme,  extended the

service offered by the Export Finance Insurance Corporation,  established an Overseas Projects Corporation, .  and up-graded  the general services provided b y  the Department ofÂ·Trade

and Resources to individual exporters. But the. greatest .  Â· incentive the Government has given exporters has been to  reduce inflation. Ã¢ÂÂ   .

Australian firms are now competing successfully in some of  the world's toughest markets. They are exporting to markets  that would have been nothing more than, a dot on the map  a few years agoÃ¢ÂÂ  We are now more competitive than at any

time during the last seven years. This export activity  will benefit every Australian. It builds on confidence,   assists general economic recovery and provides, a basis for .   creation of new job opportunities. Our involvement in '

the world car scheme deserves the strongest community support.

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