The Australian automotive industry has been feeling the strain in recent months with a spate of layoffs and rumours rife that more contract engineers could soon go out of business.

However, the Government has moved to reassure workers that jobs will be saved as it attempts to make the industry greener.

Currently, the Government is attempting to establish a new luxury car tax increase, subject to changes to promote more fuel efficient vehicles – which would be a further blow for car manufacturers. The changes would mean a competitive price advantage to a range of imported cars ahead of locally manufactured products.

However, according to Industry and Innovation Minister Kim Carr, the Government will establish a greener automotive industry which is able to change and adapt more rapidly to market conditions.

The Government will respond to Steve Bracks’ review of the industry next week. In his review, Mr Bracks recommended that the promised $500million green car innovation fund be doubled and that the Automotive Competitiveness and Investment Scheme be replaced with a new Global Automotive Transition Scheme providing $350million in annual subsidies to the industry over a 10 year period to 2020.