Car parts help fund opens for round one

A $20 MILLION fund created to help car parts suppliers diversify outside the ailing automotive industry opened for business today as part of the first round of the program.

Businesses that successfully apply for the four-year Automotive Diversification Program will receive grants of between $50,000 and $1 million to assist in the payment of equipment that will help them survive beyond the end of local car-making in late 2017.

According to the department of industry, the loans will target research and development activities, retooling, developing new products, prototypes and protecting intellectual property, pre-production development and developing exports.

“The Automotive Diversification Program is a $20 million programme which includes $17 million for competitive merit-based grants,” the department said in a statement announcing the opening of the fund’s application period, which ends on September 11.

“The grant programme will assist Australian automotive supply chain companies to diversify out of the domestic automotive manufacturing sector and thereby retain manufacturing capability in Australia,” it said.

The funds are part of a $155 million Abbott government growth fund established in May’s federal budget to support employees, businesses and regions affected by the closure of Australia’s car manufacturing industry.

Federal industry minister Ian Macfarlane said the federal, Victorian and South Australian governments are maximising opportunities for automotive supply chain firms affected by the closure of local automotive manufacturing.

“Supply chain firms can access the Automotive Diversification Program to shift their focus towards the high growth industries of the future,” he said.

“This initiative will help to ensure that these firms continue to operate in Australia beyond 2017.”

Grants paid under the fund are reimbursement grants paid in arrears, the department said.

“Payment is contingent upon grantees meeting project milestones and demonstration of eligible expenditure being undertaken, where eligible expenditure is limited to new capital equipment,” it said.

The department said individual businesses would be able to access up to $1.5 million in multiple grants over the life of the program, with businesses required to at least match the grant funding dollar-for-dollar.

Victorian manufacturing minister David Hodgett said the program complemented existing initiatives for his state aimed at connecting the automotive supply chain to business opportunities in other markets and industry sectors such as defence, construction, mining and medical technology.

South Australian automotive transformation, manufacturing and innovation minister Susan Close said the program would enable components makers “to take advantage of their considerable capabilities and adapt to different industries”.