Automotive manufacturer Ford has received government funding to improve the fuel efficiency and emissions performance of its Australian produced vehicles.

The Federal Government will provide $34 million as part of the total investment of $103 million from Ford Australia on top of a $232 million sustainability initiative, which will see the Falcon produced in the Hume City Council area until the end of 2016.

The funds will reach Ford’s Geelong plant in Victoria, which also produces the Ford Falcon and the Ford Territory.

Minister for Manufacturing, Kim Carr said the funding will boost the Falcon’s fuel efficiency and emissions performance by more than five per cent by using improved aerodynamics and transmission technology.

Ford Australia president and CEO, Bob Graziano said the investment will provide direct employment for around 300 people during the design and engineering stages as well as supporting jobs and investment across the company’s supply chain.

“Every car manufacturing country in the world receives government support, most far more than Australia receives and there are many other countries that are desperate to develop their own auto industries because they know the flow-on impacts it has on education, R&D, skills and jobs, and revenue,” Mr Grazuiano said.

Victorian Acting Premier, Peter Ryan said the state government will provide financial support to Ford’s 2014 upgrade project that will strengthen Geelong’s position as a “major automotive centre”.

Minister for Manufacturing, Exports and Trade, Richard Dalla-Riva said Geelong’s economy and businesses across Victoria will benefit from the investment.

"The automotive industry is a vital driver of our overall manufacturing sector and the Ford 2014 upgrade represents a significant vote of confidence in Victoria's automotive manufacturing sector," Mr Dalla-Riva said.

City of Greater Geelong Mayor, John Mitchell said the funding gives greater certainty to local Ford workers based in the area and will ensure continued production of the Falcon and Territory models.

He said Ford has withstood many economic pressures by adapting to changing markets and in particular by investing in new technologies and production methods.

“Geelong and Ford are intrinsically linked and whilst the Geelong regional economy has diversified considerably in the last 20 years, Ford remains a major local employer and a key industry hub that supports many peripheral enterprises,” he said.