KEY POINTS:
Prime Minister Kevin Rudd yesterday moved to boost his Government's green credentials with a A$35 million ($44 million) grant to Japanese car giant Toyota to build petrol-electric hybrid saloons in Australia.
The handout will come from the A$500 million green car innovation fund established in last month's federal Budget to both promote cleaner and more efficient cars, and to help secure a new future for the nation's ailing motor vehicle industry.
Under the moves announced yesterday Toyota will begin producing 10,000 hybrid four-cylinder Camrys a year at its Altona, Melbourne, plant from 2010, with federal and state governments indicating they will progressively introduce more "green" cars into their fleets.
Innovation, Industry Science and Research Minister Senator Kim Carr will also visit Detroit in a bid to talk Ford and General Motors into similar commitments in Australia.
Holden, owned by General Motors, has already said it intends building a hybrid version of its Commodore saloon.
Toyota's acceptance of Rudd's incentive has come at an opportune moment for the PM, who is under severe pressure over soaring petrol prices on one front, and major job losses in the politically sensitive motor vehicle industry on another.
The manufacture of hybrid Camrys that can cut fuel consumption by a claimed one-third, significantly reduce carbon dioxide and shave A$1000 a year off annual fuel costs has won the praise of unions, the motor industry and environmentalists.
There are problems, including a new-car price about A$4000 above those of standard models and reservations among some analysts about the claimed efficiencies.
But with sales of traditional six-cylinder family cars falling as fuel prices rise, criticisms of Australia's heavy dependence on fossil fuels, and a commitment to reduce Australia's greenhouse gas emissions by 60 per cent by 2050, Rudd has won wide approval.
The motor industry, which has lost more than 8000 jobs in the past four years, has welcomed the announcement. "This demonstrates that local car manufacturers are embracing the challenge of producing low emission, more fuel-efficient vehicles in Australia," Chamber of Automotive Industries chief executive Andrew McKellar said.
Monash University managing and manufacturing expert Richard Cooney told ABC radio the move could also boost the development of green technology in Australia as Toyota's hybrid fleet sales increased.
"The kind of response it's going to trigger from other manufacturers is to look at their own products and how they can be made more environmentally friendly," he said.
Rudd also defended the decision to hand Toyota a A$35 million subsidy at a time when it plans to further reduce tariffs. He said there was nothing wrong in funding public investment in private research and development, especially when the nation would benefit from green technologies.
The Victorian State Government will also contribute to the project. "Fuel efficient cars are the future of the automotive industry," Premier John Brumby said.
LESS GAS, MORE MONEY
* Australia's first hybrid car will be in production within 18 months.
* Toyota has committed to building 10,000 petrol-electric Camry models each year in Melbourne from 2010.
* The move is expected to boost the Victorian economy by A$150 million ($188 million) annually.
* Toyota will receive a A$35 million subsidy from the Government's Green Car Fund.
* The hybrid car will use one-third less petrol than a conventional model and save the average motorist A$1000 a year in fuel costs.
- AAP
