The Rudd Government will double its assistance to the ailing car industry to more than $6 billion over the next 13 years in a bid to retain thousands of jobs and valuable exports.



- $6.2b plan to save car industry

- Plan includes $3.4b in fresh funding

- Car tariffs halved to 5% in 2010

- Package urges greener cars



The assistance includes an extra $3.4 billion in funding announced today as part of the Government's strategy to protect jobs and focus the country's car industry on becoming more efficient.



The Government's 'A New Car Plan For A Greener Future' followed a review of the future of car industry assistance headed by former Victorian premier Steve Bracks released earlier in the year.



The added funds bring to $6.2 billion in Federal aid for the industry, a move likely to be welcomed by companies facing reduced demand at home and abroad as the global economic slowdown saps demand.



''In a world now beleaguered by likely recession and financial turmoil, the new policy announcements help provide the proactive influence needed to boost the international competitiveness of our automotive industry," said Zoran Angelkovski, president of the Federation of Automotive Products Manufacturers.



The policy change will also "help us meet the critical challenges of a lower-carbon economy,'' he said.



Less welcomed, though, will be the Government's decision to support recommendation by Bracks to halve car tariffs to 5% from 10% in 2010.



Hundreds of jobs have been axed in the automotive industry, including about 1400 jobs at Ford's Victorian operations to be cut over the next two years.



Demand stalls



"We're very pleased with the announcement," said Australian Manufacturing Workers' Union national secretary Dave Oliver. "We think it will create the right environment to attract investment which will inevitably lead not only to sustaining jobs but increasing jobs."



"We're please we've got a government that is serious about the automotive industry and serious about manufacturing."



Mr Oliver warned that even with the extra government help, there will be further jobs losses in the industry, declining to provide an estimate.



"The ball will now fall in the court of some of the major car manufacturers," he said, downplaying the threat that beleaguered US carmakers Ford and GM may pull out of the Australian market.



In October, sales of locally made cars built by General Motors' Holden, Ford and Toyota fell more than 16% in a market that shrank 11%.



"Part of the future'



Mr Rudd said Australia's car industry was ''part of the future.''



He said shifting the industry towards producing low emission and fuel-efficient cars would ensure its long-term viability despite the current economic "doom and gloom''.

Mr Rudd added that he did not want to be the leader of a country that did not have a manufacturing industry. Even so, the automotive plan was not a blank cheque to the industry or a rescue package.



The way in which this assistance is structured is it's provided in response to actual investments and commitments by the car companies on the ground, all three of them, that's the way we'll be implementing it in the future.''

Cars on the production line at Ford's Broadmeadows operation. Credit:Pat Scala

Under the Green Car Innovation Fund, the Government will match industry investment in green cars on a $1 to $3 basis.

Mr Rudd said the tariff cuts had already been legislated and reflected Australia's commitment to free trade and open markets.