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Aussie gov't to invest USD 74M in struggling automotive industry

Australia's struggling automotive industry will be given a 100 million Australian dollars (USD 74 million) boost from the government, with businesses urged to use the funds to expand as carmakers continue to abandon Australian production factories.

Australian Industry Minister Arthur Sinodinis announced the funding on Monday, saying it should be used by businesses to develop the research and development aspect of the automotive industry, with most of the money to be tipped into the states of Victoria and South Australia which were hardest hit when carmakers abandoned their local factories.

Last year, Ford Australia produced its last car in Victoria, while South Australia's Holden (General Motors) plant will officially end production in October, prompting the government to throw a lifeline to the struggling industry.

In a statement released on Monday, Sinodinis said that 47.5 million Australian dollars (USD 35.12 million) will be allocated for an "advanced manufacturing growth fund," about 24 million Australian dollars (USD 17.75 million) will be given to "advanced manufacturing research projects," while 10 million Australian dollars (USD 7.4 million) will be used to establish "innovation labs in South Australia and Victoria to serve as test center facilities and business capability development."

A further 5 million Australian dollars will be set aside for investing in university students to ensure the future of the industry.

"It's likely a lot of it will still find its way to places which have specialized in the past in the auto sector, but which are now seeking to diversify and do new things. But some of it will also make sure our components supplies can be part of global supply chains," Sinodinis told the Australian Broadcasting Corporation (ABC).

Australia has got a great future in advanced manufacturing, including the auto sector, Sinodinis said.

"We love our cars and we love looking after our cars and there is a lot we can do in the future to build on the expertise we have got here."

The measures will officially be announced when the federal budget is handed down by the Treasurer on Tuesday.

Xinhua / PNA