Austrailia Pumping Up Exports Of Vehicles

SYDNEY, Feb 21 Reuters is reporting that Australian car manufacturers are revving up their export plans this year, running against the trend of relatively flat export growth for many Australian goods during the global slowdown.

Exports of cars and components, including engines, have doubled over the past five years to nearly A$5 billion in 2001, figures this week showed, led by big increases into the top two markets, Saudi Arabia and the United States.

And the industry is eyeing 10 percent annual export growth going forward.

Executives from General Motors Corp visted the group's Holden facilities this week to look at exporting the new Monaro to the United States. If the deal goes ahead, up to 20,000 a year could be sold to the U.S., doubling current production.

``That's like selling coal back into Newcastle,'' said Trade Minister Mark Vaile.

And Mitsubishi has its first large orders from the Middle East, to be delivered this year.

Manufactured goods and services such as tourism now account for around 52 percent of Australian exports, compared with around 48 percent for rural and resource commodities.

That compares with a rough 50-50 balance in the early 1990s, and much of the shift has been due to growth in automotive exports, said Westpac economist Huw McKay.

``Partly it's an Aussie dollar story,'' he said, with a super-competitive currency one of the keys that unlocked foreign markets. The dollar has fallen steadily from above 70 U.S. cents in 1997 to a little over 51 U.S. cents today.

Auto exports now rank sixth overall, after resources of coal, aluminium, petroleum, gold and iron ore, and are the largest value-added export. They outrank agricultural staples such as wheat, beef and wool exports.

EXPORT AND PROSPER

The chief executive of industry body the Federal Chamber of Automotive Industries, Peter Sturrock, said manufacturers have long recognised that the domestic market was limited.

``To grow and prosper we had to achieve higher volumes through export orders,'' he told Reuters, adding efficiency improvements and investment in new technology helped manufacturers get ahead.

Automotive exports rose 18 percent in 2001, even as total Australian exports stalled when major trading partners went into recession.

For car and parts makers, exports help create an economy of scale that a small domestic market alone cannot hope to provide. Over 2001, exports accounted for 30 percent of production.

``From an export point of view, everything is stacked against Australia,'' said McKay, citing the distance from markets that lifts transport costs and competition from cheaper labour markets in neighbouring Asian countries.

``We have that initial cost base that works against us, so really the way to compete is to get greater economies of scale so that outweighs your fixed costs,'' he said.

Another driver in the surge in car exports has been the flexibility to tailor products for local markets. For instance, exports to Saudi Arabia have been helped by special air conditioners to cope with the local climate.

Over 2001, figures released by the FCAI show Toyota exported 59,200 Camrys, including 42,000 to Saudi Arabia, while Holden exported 28,800 Commodores, mainly to the Middle East. Mitsubishi exported 19,200 Magnas, mainly to the United States.