Australia Pours Funding Into 'Green' Autos

By SUSAN MURDOCH and RACHEL PANNETT

The Australian government unveiled a multibillion-dollar plan for the country's auto industry in an effort to boost its international competitiveness and help auto makers adjust to declining global demand for fuel-guzzling vehicles.
Under the New Car Plan for a Greener Future, the government will provide net new funding for the auto industry of 3.2 billion Australian dollars (US$2.16 billion), taking total assistance to A$6.2 billion over a 13-year period.
The plan will more than double government assistance for environmentally friendly auto manufacturing to A$1.3 billion and bring forward the expanded 10-year program to 2009 from 2011.
The government will match industry investment in green cars on the basis of A$1 for every A$3 invested by industry in a move it expects to generate A$16 billion in auto-industry funding over the plan's life.
Australian Prime Minister Kevin Rudd called the plan "forward-looking," but said "it's not a blank check ... we expect a significant commitment back from the industry as well."
Monday's policy measures were welcomed by industry, although none of the auto makers that manufacture in Australia immediately committed any funding to environmentally friendly vehicles.
Toyota Motor Corp. is already a beneficiary of the Australian government's green initiatives. In June it received A$35 million in federal government funding to build 10,000 hybrid Camry vehicles annually in the state of Victoria by 2010.
Australia's A$7.7 billion auto industry has faltered in recent times as a rising Australian dollar exchange rate made imports more attractive.
Only three auto companies make vehicles in Australia -- Holden, the Australian unit of General Motors Corp., Ford Motor Co. and Toyota. Mitsubishi Corp. closed its plant in South Australia state in March.
Write to Susan Murdoch at susan.murdoch@dowjones.net and Rachel Pannett at rachel.pannett@dowjones.com