Holden has told the government a plan suggested last week that is would double its exports from Australia to 30% is unrealistic, complicating negotiations over federal assistance for the automotive industry.
The Australian Financial Review reports industry minister Ian Mcfarlane set the 30% target while touring Holden’s Adelaide production plant last week, and that its rejection of the benchmark sets him up for a cabinet tussle with treasurer Joe Hockey.
Car makers are currently negotiating with the Abbott government on taxpayer assistance, and Holden’s parent company General Motors is waiting until a deal is struck before it invests $1 billion from 2016 in developing two new vehicles to be built in Australia to 2022.
According to the report, Hockey is not keen on giving car makers more money if they can’t make a car which can be exported, and Macfarlane is facing pressure to keep production in Australia, saving jobs in the manufacturing sector.
Prime Minister Tony Abbott will be forced to make a decision to settle the disagreement, according to the report.
The Coalition has already cut taxpayer subsidisation of the industry to 2015 by $500 million and has not committed to any help beyond then.
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