HOLDEN has called for the tariff on four-wheel-drive vehicles to be doubled to match passenger vehicles, a move that would make them more expensive in the marketplace.
Managing director Peter Hanenberger believes the present 5 per cent rate – effectively a loophole linked to their past rural industry use – is unfair to local passenger vehicles.
Mr Hanenberger told the Committee for Economic Development of Australia on Friday that the tariff on four-wheel-drives should be 10 per cent, the same as for imported passenger vehicles.
He added to his remarks yesterday in an interview with the Nine Network's Business Sunday, where he called for a single car industry union to simplify negotiations.
Sales of four-wheel-drive vehicles have soared over the past decade, especially with the emergence of the so-called "soft roader" category.
The 406,966 FWDs sold in the first half of 2002 is more than were sold in all 1991 and 19 per cent up on the same period last year.
Holden is developing a local FWD derivative of the Commodore and hopes to become General Motors' Asian centre for expertise in FWD development.
On tariff policy generally, Mr Hanenberger said the Australian car industry had emerged from the era of protection stronger and more competitive but warned further cuts to tariffs would damage future prosperity.
Mr Hanenberger said exports like the Monaro had put Australia on the world motoring stage as a flexible and cost-efficient producer but warned more work had to be done to maintain the momentum.
"We can be the healed child and not the sick child," he said.
"Industries cannot expect to be the recipient of a never-ending flow of government funding for their survival.
"Such assistance is akin to industrial life support and the Australian automobile industry is certainly in no such dire condition."
But Mr Hanenberger said it would be foolish to cut tariffs further from the 10 per cent they would reach in 2005 unless other countries lowered their levels of protection.
"We simply do not believe that it is in Australia's best interest to give up our remaining negotiating coin until our trading partners have demonstrated their own willingness to come to the table."
He said Holden was now well on the way to becoming a flexible, low-cost global niche producer of cars.
To achieve that, it would spend $2 billion in the next five years to lift output from 130,000 to 180,000 cars a year.
Part of that growth would come from increasing exports such as the Monaro to fill product line gaps in General Motors affiliates around the world.
Mr Hanenberger said he would have to continue a strong link with the union movement to complete Holden's aims.
He said shared commitment and a mutual understanding of goals between industry and unions was critical to future growth.
"Holden stands ready to engage in meaningful dialogue with the unions about the future of our industry, rather than taking the big stick approach," he said.
"Equally we will not tolerate any action that is illegal.
"Unions have a legitimate role in the industrial process but manufacturers may be forced into using the full extent of the law to defend ourselves if we suffer substantial damage as the result of illegal actions."