Auto manufacturers say manufacturing in Australia is not dead yet despite Toyota pulling the plug on Australia this week.
Tomcar Australia and the Volvo Group both plan to continue manufacturing in Australia by focusing on niche and customised manufacturing.
Tomcar Australia manufactures all-terrain vehicles and chief executive David Brim told SmartCompany the company has been able to thrive by taking advantage of Australia’s great components and supply network.
“Australia is one of the best places in the world to engineer and build product as you have got some of the best suppliers in the world here,” he says.
The company follows a pull rather than push manufacturing approach and produces cars to demand.
It presold 100 cars in the last financial year at $27,500 a car to turn over $2.75 million and is aiming to get production up to 5000 cars a year in the next two to three years.
Tomcar outsources production of its vehicles to Australian manufacturer MTM, a company which previously supplied Holden but “saw the writing on the wall” and diversified to enable it to manufacture Tomcar’s all-terrain vehicles.
“The future of manufacturing is access to the supply chain; it’s not owning your supply chain, it’s having access to it.”
Brim says manufacturing needs to be niche, high quality and highly specialised.
“Australia will naturally attract products like Tomcar which are low volume, high quality which is what Australia is good at, we can’t compete with low labour wages in Asia,” he says.
For the Volvo Group, manufacturing in Australia allows it to specifically tailor its products for the Australian market.
The Volvo Group produced in excess of 2650 Mack and Volvo Trucks at its Wacol, Queensland, assembly plant in 2013 and employs 1460 people across Australia with a turnover of $1.13 billion.
Chief financial officer Tom Conlon told SmartCompany the Volvo Group has been producing vehicles for over 40 years in Australia and is “very committed” to the market.
Many of the parts of the giant trucks such as engines, cabs and transmission are made overseas and shipped to Australia, while items such as tanks, bonnets and tyres are made here.
“By being here in Australia as an assembler – we can be very close to our customers,” Conlon says.
“We build customised trucks to suit the Australian marketplace based off a global platform and architecture – capable to cope with the extreme heat and climatic conditions, high train weights and long distances that typify the Australian market.”
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
