Maybe, just maybe, the Federal government is on to something here, proposing to invest $6.3 billion of our money to protect our indigenous motor industry.

Prescience would of course be a welcome surprise from a government of any political stripe. Normally their eyes are firmly fixed on which section of the community will spear them through the next election campaign and back into office, but Kevin Rudd and his team may actually be in the right place at the right time with the right idea.

The real six billion dollar plan man is The Hon Kim Carr (pictured), Minister for Innovation, Industry, Science and Research, of course. His "New Car Plan for a Greener Future" aims to reinvent the century-old car-making industry in the image of 21st century innovation, and high technology is the way to go. Here's why:

The Government says about 15 countries can conceive of a car from paper to showroom, though why they can't be definite on the actual number of car-creating countries is a mystery.

Is Australia really one of these? Which of our car-makers designs its own engines or gearboxes in Australia or has plans to be doing that in the mid-term?

Let's accept that Aussies can create a car from scratch and take it to the showroom. Today that's not enough. We need to export our cars because there aren't enough of us consumers here to amortise the costs involved in creating a unique model.

That's another problem too. We only build big cars. So when the market for big cars goes soft, our industry goes limp, and out goes the hand straight into the public purse for sustenance.

Another, larger problem, is that the mantra all local manufacturers have been ascribed to since John Button's plan is that size matters and if it's not a big six and rear-wheel drive, it'll never sell.

Australian consumers are past it now. They no longer take a company car that their employer dishes out, purchased on the back of a whacking fleet discount that does nobody any favours.

We're a novated lease society. We have more freedom of choice in what we drive; more working females need their own company car; our family lives are changing as divorce slices and dices transport requirements; and we want cleaner, greener cars. All this has deftly turfed the previously accepted wisdom that a company car is a Ford or Holden with a huge boot, six-cylinder engine (and rear-wheel drive). And that individuality in the corporate car park is a Berlina badge or XR body kit.

The need for a large car or wagon is largely gone for sales staff. Why should they drag boxes of samples around with them, when they can click to a web page in the client's office and show everything on screen on line? In fact they don't need to be in the client's office at all with video calling.

Aussie cars used to need to be tough to cope with our roads and our heat, but car makers around the world now know how to build a car for 40-degree summer's days, we have more bitumen roads, more of us live in metropolitan areas, and we fly to our holiday destinations rather than drive.

Fundamentally, this means the Big Aussie car has reached its use by date.

Ford and Holden know this. Hence the Focus project for 2011 and Holden's public musings for three years on an as yet to be confirmed Torana revival.

Traditionally, Ford and Holden have staked the continued existence of their engineering, production and manufacturing facilities to their parent companies on the unequivocal need to continue the bloodline of Falcon and Commodore.

Take that away and they have to fight on a levelled playing field with other company assets around the world.

Sure Holden secured significant advantage with its rear-wheel drive programme when GM all but abandoned the concept. Sales into the Middle East have been strong for almost a decade and interest in Asia too has been steady.

But Toyota's Camry/Aurion exports to the same Gulf States proves rear-wheel drive isn't the killer USP customers there are after. And in Asia the RWD concept is all but unknown except among the upper echelons of Benz and BMW customers, most of whom are chauffeured around anyway and are buying on brand not chassis layout.

These exports too can be adversely impacted by currency fluctuations, as the past six months have shown quite starkly.

So now the game has really changed. If Ford and Holden have to survive by manufacturing cars designed elsewhere, while at the same time designing cars for manufacture elsewhere, the question becomes, what is their actual USP to their parent company.

Australia is a long way from Detroit. It's in a very different time zone. It's in a very different mentality. So why bother maintaining it when the skilled folk could be shipped out to Detroit or Korea or Cologne to design their products for global markets.

Why does the Ford T6 programme have to be conducted at Broadmeadows? Is it for the people or the physical infrastructure in those buildings?

And instead of setting up a shadow production plant in Australia on extended lines of supply, Toyota could work a half an hour extra each day at its several other Camry making plants to supply cars for Australia in Europe, Asia, or even South Africa where they're up to speed with those pesky right-hand drive layouts.

Now this is all before you factor in the current financial quicksand that is threatening to suck in a huge percentage of the businesses we all know and love.

If there is a possibility of GM or Ford being broken up and sold off, should we really be funding their Australian R&D departments?

Ford Motor Company and General Motors are hog-tied to product their customers now realise they no longer desire.

Ironically at the time of writing, the oil price, which partly sparked their decline, is now back around a highly affordable US$50-US$60 a barrel, returning the Stateside pump price to a far more palatable US$2 a gallon.

The fate of a financially hobbled clutch of Big Three Automakers makes them ripe for being sold off brand by brand or production facility by production facility, and the results of this is unavoidably mass job loses. No one wants that, least of all the politicians. The social costs would be immense, and probably unbearable for the US where much of the cash in the kitty has been spent bailing out the banks, whom some would say are the true rogues behind this entire crisis.

In the UK they are stricken by the threat of a massive recession, which will hurt middle class white-collar workers hardest this time round. This is because the UK has set it self up as a financial centre and service industries have boomed during the past 15 years. Manufacturing has withered, for a variety of reasons. McJobs abound.

Ironically enough, again, their car industry should be better placed in this decade to withstand the downturn because like never before so much of the production of UK car factories is destined for export markets. Trouble is, many of them are in trouble too. Hondas head to the US, Minis ship out all over the world, Toyotas and Nissans swarm over Europe, Jaguars and Land Rovers rush to, er, OK, poor example.

But the problem the UK is facing is mass redundancies in the service sectors of finance and banking.

And this is where the Australian Feds have probably got an advantage. They can see what happens in the US when government policy and the car-makers are so paralysed by fears of union backlashes, that it is impossible for them to take the hard decision that say cut jobs, close factories and rebuild the surviving product portfolio to match the needs of customers.

Our Feds too can see what happens when you go too far and reduce your manufacturing base and rely on service industries to provide so many jobs, that you not only become susceptible to recession, but the people being thrown out of jobs used to have higher average earnings (and thus paid more tax). They also have larger mortgages, which when not being fed by salaries lead to a glut of houses on the market, driving down prices, depressing the economy still further.

So while the Carr industry plan is devoid of too much detail, the thrust of it is that we need to be smarter in the way we perceive the Australian car industry.

We must tackle internal and external issues at once.

It would have been nice to see a co-ordinated plan for the future. A road map for the industry, if you like: "We're here now, we want to be there, and this is how we're going to do it." Nothing too prescriptive but here's the key goals.

Interested parties are invited to apply for government cash that is doled out on a ratio of federal money to private industry investment. If the Feds like your plan, they'll fund you. But how do they know if your idea fits the overall plan when there isn't one? Will we end up with a hundred great ideas but no coordinated, coherent policy?

The Feds, though, are 100 percent right that innovation, technical advancement and skills development are the keys to the future.

Sadly for us, these decisions were not taken 10 years ago, when the first cracks in the large car segment's hold on the market appeared, but hindsight is 20/20 vision.

The correct prescription for the future is not to revive what we have, but to focus instead on the future of mobility, potentially an oil-free mobility.

Many imported modern cars are already achieving impressively reduced CO2 emissions and exceptional fuel consumption. But they still require petrol or diesel and they still emit harmful gases from their tailpipes.

Fundamentally the longer-term future of cars will not be connected to oil-fuelled engines.

The way for Australia to grab its place in the automotive world is not to copy what the rest of the car and component industry is doing and be yet another competitor on the global stage, but it is to take a big breath and leapfrog current generation of technology and head into alternative fuel technologies in a big way.

We have plenty of sunshine. We have a huge coastline. Wave and wind power, and solar energy are our USPs. The cars of the future will need electricity to charge their batteries and we can produce this in renewable, emission free ways. We aren't alone in having coastlines, wind and sunshine, so we can export our technology to others. This technology would also have wide application outside the car industry also.

Our heritage in hosting solar car races may also give us some credibility in the arena of oil-free technologies.

There's no sense in competing against established players in the global economy because if you have no USP you're more vulnerable than the bigger guys when the markets trip up. When you are the leader, replete with skills and technologies that are home grown, you always have that to fall back on.

Propping up Holden and Ford Australia with public money is not the answer. Holden and Ford could be sold off in a parent company fire sale next week, next month or next year.

If we have invested public money in their people developing technologies for our future, that vital know-how suddenly gets exported with no benefit to Australia.

The investment of public money into the car industry needs to be focussed around developing technology we can sell for a profit around the world: Technologies that will make Australia the centre of innovation, and a centre of excellence.

Pouring millions of 'green' dollars into Camry Hybrids makes no sense either. The technology is already available, but up until recently Toyota had taken a market-related decision not to offer anything other than the Prius or Lexus models to Australian consumers.

The fact that the Camry is assembled in Victoria but the hybrid powerplant is imported as a complete unit and inserted in Altona, does not in any way transfer skills or technology know-how to Australia. There is no benefit to us.

If the government wanted to use that money wisely it could provide a $5,000 (for instance) rebate to any customer who buys a car that meets certain low emission criteria. With that benefit available more car companies would look more seriously at making more low emission models available from their international arsenals, and the net effect would be far more Australians keen to buy into the low emission concept.

If you want a four-wheel drive for your lifestyle, you're not going to buy a Camry Hybrid. If you want a sporty car you're not going to buy a Camry Hybrid. If you want a seven-seater you're not going to buy a Camry Hybrid.

But if you could get a $5,000 grant or rebate, or tax deduction from the Feds for buying a low emission model from one of the 50 manufacturers present in Australia, you'd certainly give it some serious thought.

Part of the problem too is that Hybrids perpetuate the petrol/diesel distribution paradigm, where in reality a more forward-thinking programme would be working on delivery systems for alternative fuels, either as replacements or in addition to the existing fuel systems which will be needed for the next 10 – 20 years at least, as the old car parc withers and dies.

Where are the plans for the hydrogen delivery infrastructure? Or for CNG, or expanded LPG, or car battery charging points. It is now time for government to take a leading stance in fostering debate, consideration and devising positive action plans for the implementation of these systems so when the technology finally arrives we are ready to take advantage of them.

Our LPG network is all well and good, but use of the fuel is so narrowly focussed. Government is only now actively promoting LPG but there is little choice for the consumer. Only one car is offered as a dedicated LPG vehicle, all the others require two fuel tanks, compromising their practicality.

Government could encourage more car-makers and importers to sanction LPG conversion kits that do not invalidate warranties, to drive further LPG adoption. Our gas supply position is extremely strong in Australia, and there's an emissions bonus, even CO2 levels are marginally lower as well.

But until consumers can be satisfied they won't be invalidating their new car warranty, and their franchise dealer can carry out the conversion with approved genuine parts, a new car buyer has very little incentive to patronise the LPG conversion network on their own.

At the end of the day, there is a sneaking suspicion that the Fed's 'Car Plan for a Greener Future' is a cunningly disguised plan to slowly decommission the car industry as we know it.

Jobs will be lost across the global car economy as the current economic crisis bites deeper. For some manufacturing entities this will give them the excuse they need to shed labour and shutter plants.

Australia shouldn't be in that position because its plants are relatively efficient, if under-utilised, and our creativity and make-do-with-less philosophy could be copied around the world.

Component manufacturing is truly global today, and life support from the government should not be used to continue commercial enterprises where natural economics suggests they need to go quietly.

Component manufacturing has a huge future if it is directed towards the correct set of components. Can we be competitive with China, when they're turning out millions of pressings or parts each year? Look at how many formerly homegrown components are now imported from Asia for our domestic models. But if we can turn Elizabeth or Broadmeadows into the Silicon Valley of the international car industry, we will have invested wisely, and it will draw in both talent and investment.

Technology exports are less affected by currency fluctuations, too, and every car maker worth its salt will always be focussed on the next competitive advantage, with more fucus on consumer benefit than absolute unit cost.

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