GM to Toyota Win A$200 Million in Australia Pre-Poll Funds

General Motors Co. (GM) and Toyota Motor Corp. (7203)’s Australian units will be able to tap a A$200 million ($178 million) state fund as the country’s government heads into a Sept. 7 election amid rising unemployment.

New measures will increase fleet sales to Australian federal and local governments of about 18,000 vehicles a year, industry minister Kim Carr said in an interview today on Sky News. Australia’s Labor government, counting on support from unionized car workers, wants to highlight its differences with an opposition that plans to cut funding for the industry.

“We need to take steps to stimulate demand for Australian-made cars,” Carr said today. “This election is the year in which we decide, ‘Do we want an automotive industry in Australia’.”

Toyota, the country’s largest car exporter, said in a statement it will spend A$123 million on its own plant and suppliers thanks to A$29 million of funding from Australia’s federal government and an unspecified amount from Victoria state. The company and GM’s Holden unit have cut jobs over the past two years amid export pressure from a strong Australian dollar, the reduction of import tariffs and declining demand for the large cars in which local carmakers specialize.

Ford Motor Co. (F), which will also be eligible for the funding along with Toyota, GM and suppliers to the three local car manufacturers, said in May that it would stop making cars in Australia in 2016 after nine decades as it was no longer viable to manufacture in the country.

Industry production numbers were the lowest since 1957, Carr said today, adding that the measures could increase business fleet sales by as many as 66,000 cars over two years.

Sales of locally-produced cars in the first seven months of the year fell 21 percent from a year earlier to 62,825 vehicles, just 9.5 percent of the market, according to data released today by the country’s Federal Chamber of Automotive Industries.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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