Toyota Australia has welcomed the release today of the Federal Government's automotive industry policy.

The announcement by the Prime Minister in Melbourne today represents the formal response to the review of the Australian automotive industry conducted by former Victorian Premier the Hon Steve Bracks. It sets the guidelines for automotive industry policy direction for the next decade.

"Today's announcement closes a year of intense study and review by the Federal Government and the Australian automotive industry into the threats, challenges and opportunities currently facing us," said Toyota Australia President and CEO Max Yasuda.

"Australia continues to be one of the most competitive and open automotive markets in the world. The Government's policy settings will assist the industry to evolve to meet this competition and build a solid base for future development.

"In particular, the introduction of the Green Car Innovation Fund will provide a strong incentive for local manufacturers and component suppliers to introduce new technology and processes that support the production of innovative vehicles, parts and production systems for local and export markets."

Mr Yasuda acknowledged the strong leadership shown by the Minister for Innovation, Industry, Science and Research, Senator the Hon Kim Carr, throughout the review period.

"Throughout this process, Minister Carr emphasised the Government's firm belief that a strong and competitive Australian automotive sector is an important part of this country's economic and social fabric.

"This belief was translated by him into regular consultation with the industry across a broad range of complex issues.

"We look forward to continuing this level of involvement in the years ahead," he said.