Australia still capable of mass car manufacturing, says industry group

Australian industry would still have the capability and expertise to mass produce vehicles should a manufacturer ever decide to return production Down Under.

That’s the opinion of Victoria’s major automotive body, the Victorian Automobile Chamber of Commerce, which has left the door ajar for a new venture despite closures of Ford, Toyota and, most recently, Holden.

David Dowsey, head of marketing at the VACC, told motoring.com.au opportunities still exist for manufacturers, especially those looking to innovate in bourgeoning technology such as electric vehicles. Dowsey’s optimism comes in the face of mounting pressures confronting manufacturers in Australia, which until last week was one of only 13 countries globally capable of designing, engineering and building passenger vehicles from scratch.

“It is not impossible that Australia will one day again build passenger cars. When the conditions are right and when technology evolves, this country could once again be a mass vehicle manufacturer,” Dowsey said.

Car manufacturing and the underlying parts supply businesses have been left heavily depleted in the wake of recent shutdowns, forcing thousands of job losses. According to a recent study, Directions in Australia’s Automotive Industry: An Industry Report 2017, about 6000 jobs within the parts supply sector will be displaced by recent plant closures.

Dowsey said many parts suppliers were able to diversify their businesses outside the automotive space before the closures. Others, such as Carbon Revolution in Geelong, have continued work in the automotive space, supplying components to overseas manufacturers.

“There are still truck and bus and trailer, and specialised vehicle manufacturers that they can supply to, along with some suppliers who have managed to secure overseas contracts. Others still have diversified into other areas; some allied, like marine and aeronautical, some completely different, such as medical supplies,” he said.

“By all accounts the three mass passenger vehicle manufacturers have all behaved incredibly honourably towards their suppliers. The job of the suppliers, however, was to supply parts to OEMs right up until the last cars were made, so this did make it complicated for those who had feet in both camps: supplying to an existing OEM contract, while attempting to diversify and find other sources of income.”

Dowsey noted the success of Precision Plating, a Victorian-based company which has successfully transitioned into plastics plating for gaming machines for a US client, along with Dolphin Products, which now produces plastic mouldings for various industries.

While fiscal and logistic pressures contributing to recent Australian automotive plant closures will remain – including increased domestic competition, lack of scale, lack of government incentives, union pressures – Dowsey said the parts industry would retain and develop its know-how without domestic manufacturing.

“There is still scope for Australian businesses to produce parts in this country,” he said.

“You need to remember that supplying parts to Australia’s mass vehicle manufacturers was only one side of automotive parts manufacture. Many Australian parts manufacturing and importing/export businesses still exist. Manufacturing aftermarket products, such as bull bars and 4X4 products, for example, is still very strong. So yes, there is still an opportunity for Australian businesses here.

“The best opportunities are for advanced manufacturing of high quality parts. That's where Australian businesses can best compete and we do that very well; Carbon Revolution is an example of a niche business supplying parts to Ford in the US for its Mustang cars that are world's best.”

In addition to parts suppliers, the likes of Holden's performance arm, HSV, will continue to supply tailored products for the domestic market.