Property and pollies: Behind Aussie auto start-up

A former bankrupt property developer and a political hopeful are two of the primary creators of the business case for the Australian start-up car company, Ethan Automotive.

Peter Harris (pictured) was declared bankrupt in January 2011 and discharged in July 2014. The other architect of the Ethan Automotive project is another real estate developer, and Family First party candidate, Ashley Fenn.

Ethan is currently seeking the initial capital to get started on a development program for three new models that are scheduled to start production from late 2018 in a new plant in Adelaide, roughly a year after Holden and Toyota shut up shop as local manufacturers and two years after Ford departs.

Fenn and Harris have appointed automotive industry veteran Matthew Newey as the Chief Operating Officer of Ethan Automotive. He estimates Ethan will need a total investment of $1.5 billion to hit its on-sale date, but insists the business will be financially self-sustaining from that point on.

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

According to an Australian Financial Security Authority extract, Harris was declared bankrupt on January 10, 2011.  Harris was also involved in a high-rise apartment development in the Adelaide suburb of West Lakes which went sour. The issues were reported at the time by the News Limited.

The 51-year old was discharged from bankruptcy on July 26, 2014.

In a statement issued to motoring.com.au on behalf of Ethan Automotive, Peter Harris’ work in creating Ethan Automotive and his previous financial issues were acknowledged.

“The person referred to in the online article is the same Peter Harris employed with the Ethan Group of companies. Peter is an entrepreneur with many successes and some failures as reported in the article. These experiences and history have not negatively impacted the early automotive work undertaken by Peter and his team,” the statement read.

“Peter Harris along with Ashley Fenn, Managing Director of the Ethan Group, identified an opportunity in the automotive manufacturing sector before the announcements of Holden, Ford and Toyota that they would cease manufacturing in Australia. Following these announcements Ashley and Peter developed the business case for a new automotive manufacturer that differentiated itself from the high volume models used in Australia.

“A critical and early acknowledgment of both Ashley and Peter was the recognition that their automotive manufacturing business ideas required relevant industry expertise to implement and operate the new venture. The venture is now at that stage with the appointment of Matthew Newey as Chief Operating Officer, several senior executive appointments currently being negotiated and the engagement of an internationally recognised design and engineering team.

“Ethan Automotive is a legal entity in its own right operating independently to its major equity investor, the Ethan Group of Companies. All Ethan Automotive business decisions of will be made by Matthew Newey and his personally selected team with international automotive and finance experience in conjunction with the Ethan Automotive Board of Directors.”

Newey said he had left the automotive industry and was working for brewer CUB six months ago when Fenn and Harris first approached him with their idea to build cars in Australia.

“At first the conversation was pretty short; ‘guys the auto industry is coming to an end so thanks for the conversation but let’s leave it there’. But over the six months I got more and more involved, I started taking a deeper look at the business case. The point came where I was convinced there was something there,” Newey told motoring.com.au.

“It’s extremely complex, but when you are passionate about the industry it is actually quite enjoyable. To think we can start an automotive company up in Australia when everyone else is leaving. I get a kick out of that,” he said.

“To think we can maintain automotive jobs here and keep those skills here. We are good at designing and developing vehicles in Australia. Every other mature market in the world builds motor cars… This is too important to just let it die with no-one in the country having a crack at doing it.

“Someone has to step up. I am lucky enough that Ashley and Peter were prepared to step up and I feel privileged to be a part of it,” the Ethan Automotive COO stated.

Newey made it clear that Fenn and, particularly, Harris are crucial to development of Ethan’s plan to build vehicles in Australia.

“They are pretty passionate about the industry,” Newey said. “They saw an opportunity in terms of exit of OEMs and started kicking around ideas about whether it was possible to manufacture vehicles in Australia under a completely different model up to a 30,000 volume kind of a level and have a sustainable business and that is basically where it started.

“Peter Harris ran with the concept and started studying models globally on who does produce vehicles at this kind of level on what kind of platforms and came up with a concept of ‘yeah we believe this is possible, we believe this is possible in Australia’,” Newey explained.

“They have got to a point where they produced a business case. They did a lot of research globally on what this thing needs to look like. They have now got to the point where they are well aware they now need to bring the skills in from the automotive industry to actually firm up this business case and activate it.”

Harris has also been covered in the media for his role in the Family First political party, of which he has been credited as the initial driving force and funder.

While Harris now has no formal connection with Family First, Fenn is the Victorian state director and ran for the senate at the last federal election.