With all the doom and gloom surrounding the Australian Vehicle Manufacturing industry it is easy to overlook the successes.
Australia has some remarkably successful vehicle manufacturing industry success stories – but they are not the big brands
All the focus has been on the Multi-National Car companies such as Holden, Ford, Nissan, Mitsubshi and Toyota who have closed or are closing their Australian Operations.
These were certainly flagship brands, but they themselves were only part of a value adding chain. Behind each lay a myriad of component manufacturers.
As the following examples show, some either complete manufacture or component, have specialised in niches . Backed themselves and invested heavily in Intellectual Property that stands them out in a global market.
It is worth remembering that around 1980, 80% of all Intellectual Property resided in Corporations, now 80% of IP resides in Small to Medium businesses. And as the three examples below show – it pays off.
Built in Australia, the Australian Bushmaster armoured personnel carrier is receiving orders from around the world, such as Britain, Nederland, Jamaica and with forecast sales to Japan, Indonesia and Libya.
The vehicle has been an amazing success story arising out of Afghanistan where it has saved numerous lives, in fact no soldiers have been killed in it, despite road side bombs being detonated under and beside it.
Combining a V-shaped hull to deflect the blast along with interior design features, this Australian Vehicle is proving Australian innovation can be successfully exported to the World.
Load Restraint Curtains for Transport
Australian Company Polyweld designed and patented a system to secure loads in the increasingly popular Curtained Sided trucks used around the world.
Their unique approach is already being exported throughout Europe and is now making in-roads into the Australian market. The brilliance of the design and patent is that neither gates or load binders are required in addition to the truck curtains!
This has a massive productivity and road safety benefit.
This is a brilliant example of a Vehicle Industry Manufacturing company that looks to the world as its market.
Although only recently established Mammoth Trailers has designed its value chain with the global market in mind. Focusing on design and innovation in Australia, they have structured a brilliant global value adding chain to take their products to the global market.
For example their patented Side slider Trailer Bin Combination owned by Mammoth is used to carry Refuse, Chipping, Grain and Agricultural Product, their market is global. They have structured a global value adding chain for production and late stage value adding. Whispers are that they are already looking at new global market orders in the several hundreds.
Recognising the Change in the Global Market
What these companies demonstrate is a recognition of the fact that Nations are now beginning to compete on the basis of component value adding, not complete product. Take for example the iphone.
Invented in Calfornia. Assembled in China. Components made in Germany, Japan, Korea and elsewhere. In other words, today’s manufacturing production is fragmented by phases of production, with each country specializing in a phase according to its comparative advantage. (source)
So countries add value along the logistics value chain, importing – adding value – then subsequently exporting to another country for the next stage of value adding.
Ultimately countries will compete on the basis of component value adding along the Logistics Chain (Supply chain). Such physical component value adding shall necessitate that countries have the logistics infrastructure, business and individual logistics skill to support competitive advantage. Governments will need to focus on ensuring that inbound and outbound logistic barriers are minimised in order to support a nations competitiveness – see article on National Logistics Policy,
Such a policy helps reduce competitive barriers in a global market by reducing logistics risk (our speciality).
So What is the Future?
The future of the Australian Vehicle Industry Manufacturing is bright, but it will be only for those companies prepared to:
- Invest in real innovation,
- Create global value chains of production
- View the world as the market, or major segments of it (not just Australia)
Having twice held senior executive positions in Australian companies that were number one in the world in their respective markets, I would add a fourth – stay narrowly focused on what you do well.
This is only a sample, beyond that there are more global successful manufacturing companies. Manufacturing is not dead – its just hidden in a myriad of highly focused small to medium enterprises – driven by entrepreneurs prepared to take risks and not seek Government handouts.