New Aussie car-maker confident of success

A greenfield Aussie start-up says it can succeed where Ford, Holden and Toyota have failed.

Would-be start-up car company Ethan Automotive insists it knows how to make money building vehicles in Australia even though three multinational auto giants have given up the fight and announced their withdrawal from manufacturing by the end of 2017.

Considering the steady decline of local manufacturing over the years and the failure of some of the world’s biggest multinationals to make it work, Ethan’s newly appointed chief operating officer Matthew Newey acknowledges the scepticism.

That’s further underlined by the fact the business case originates from a couple of property developers, one of whom is a former bankrupt.

“We are going to have a real red hot crack at starting a motor vehicle company when General Motors, Ford and Toyota haven’t been able to make it work,” Newey told motoring.com.au.

“It is going to be a huge challenge, it is going to be massive, but the numbers stack up and the business case is there.”

Ethan’s plan is to build a maximum of 30,000 vehicles per year by 2022 – a medium SUV, a sedan and a sports coupe – all based on a single ‘off the shelf’ platform the company is negotiating to buy.

The plan calls for the vehicles to be fundamentally developed by suppliers and the modular components integrated at a purpose-built plant in the Adelaide suburb of Edinburgh Parks.

The model range will then be marketed direct to the public rather than via a chain of dealerships.

The total investment required to get the range on sale by late 2018 has been put at $1.5 billion, but Newey says the business will be financially self-sustaining from that point on.

As reported previously, he is currently negotiating for the taxpayer funding from state and federal governments vital to getting the project rolling.

“Fundamentally our model is different,” insists Newey.

“We have got the opportunity because it is a green field, it is a start-up, and we are not wearing any of the legacy or the assets that are currently within the business,” he explained.

“The platform that will support three variants is a modular platform, so the infrastructure and cost of that one platform will actually supply three market segments and we will be flexible enough within our manufacturing operation that we will be able to swing toward which one of those segments is on the increase and we need to produce more or less of,” Newey

“And then in terms of the infrastructure, the capital and the plant to support our model [is] again significantly less. We are not putting the infrastructure into South Australia to produce 150,000 vehicles. We are going to have a very flexible manufacturing line that is going to support up to 30,000 vehicles.”

The business case for Ethan was first developed by two property developers – Ashley Fenn and Peter Harris – who have no prior experience in the automotive industry.

While he makes his money primarily in real estate, Melbourne-based Fenn is perhaps best known as a senior player in the Family First political party. Harris, a senior player in the early history of Family First in the mid-2000s, was declared bankrupt in 2011 following the collapse of his private company.

Edinburgh Parks is former crown land that adjoins the RAAF Base at Edinburgh and is a stone's throw from the existing Holden plant at Elizabeth. In theory it can draw on Holden production line workers as a resource after the closure of the Holden facility in 2017 without incurring any legacy costs.

Satellite picture courtesy of Google Maps