Car making and profits: mutually exclusive?

[Road_Warrior]

I'v often struggled with the idea that it is too expensive to make things here. Now that the domino effect of the death of the car makers is entering its final act, one thing looms large with them: they all make the same sort of car that people arent just into anymore.

Apart from the Territory, Ford, Holden and Toyota are all making sedans. Don't even mention the Cruze, the car is a joke compared to its competitors.

Assuming that you could keep your costs under control, and offered a car that was popular and able to be exported, could you do it profitably?

Given that the rise of the SUV is something that has occurred globally, Australia is not some unique market where everyone is running to SUVs and everyone elsewhere is still in Trabants or whatever.

Could SUV's or a pickup vehicle similar to the Ford Super Duty be profitably made in Australia? You'd need volume, or obscene markups if you didnt have volume. Is there a middle ground?

[XR Martin]

Ford looked quite hard at whether the Ranger would work here, and it probably could have if it wasnt for our Free trade agreement with Thailand.
But they would also had to build the Everest to have made the numbers work.

[Windsor220]

The thing is the Falcon and Commodore were unique to Australia so it made sense to make them here. Yes I think you could build SUVs or small cars here but they are already being built somewhere else and cheaper so there is no point. I dont really see why Toyota ever built the Camry here. Didnt make much sense.

Someone else mentioned it in another thread recently that we have never had our own manufacturer. They are just Aussie divisions from another company in another country. Ford and Holden from America. Toyota, Mitsubishi and Nissan from Japan. If we had an Australian owned car manufacturer then they could have changed to something more suitable as times changed instead of packing up and leaving. They would have been calling the shots themselves.

[GQ_Smooth]

Originally Posted by Windsor220

The thing is the Falcon and Commodore were unique to Australia so it made sense to make them here. Yes I think you could build SUVs or small cars here but they are already being built somewhere else and cheaper so there is no point. I dont really see why Toyota ever built the Camry here. Didnt make much sense.

Someone else mentioned it in another thread recently that we have never had our own manufacturer. They are just Aussie divisions from another company in another country. Ford and Holden from America. Toyota, Mitsubishi and Nissan from Japan. If we had an Australian owned car manufacturer then they could have changed to something more suitable as times changed instead of packing up and leaving. They would have been calling the shots themselves.

Saab has shown how a global but relatively small Auto manufacturer will struggle to remain competitive and up to date, and will eventually be taken over by one of the majors when things get tough. The major players budgets are far to imposing to make a comparable car.


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[PlukaDuck]

ROAD-WARRIOR.......Great post.
Problem is Australians consumers need to set the terms.
If they buy a foreign car rather than say a Locally built ford territory then
sooner or later they will stop making the territory here.
At the end of the day the consumer dictates the market.
Australians are bringing this all on themselves.
Best-selling SUVs in January
1. Holden Captiva - 2155 . ............Foreign
2. Mazda CX-5 - 1625 ............Foreign
3. Hyundai ix35 - 1301 ............Foreign
4. Nissan X-Trail - 1294. ...........Foreign
5. Subaru Forester - 1246 ............Foreign
6. Ford Territory - 1161
7. Honda CR-V - 1117. ...........Foreign
8. Toyota Prado - 1048 ............Foreign
9. Nissan Dualis - 1033. ...........Foreign
10. Toyota Kluger - 960. ...........Foreign

[Spammy]

Car industry is similar to airline industry. Massive over capacity in the global market...some companies work out how to make a (small) profit all the time. others make profits now and then but then get lazy and drop the ball. Some companies have never made a profit and probably never will but they have backing from somebody or a government who is happy to top mpney in to keep it alive. Other companies just disappear.

[simon varley]

can the car industry work here? Absolutely.

but I think only with relatively small volume niche products. There is no way we can ever get the real economies of scale without exports, and the labor costs and FTA's wit the Asian markets mean we will always loose out.

Look at the small successful companies in England though - Caterham, Lotus, Triumph, Morgan - even Rolls, Aston and Jag - they make high profit margin low volume products so I reckon it's still possible here with the right product.

[turbodewd]

I agree with Simon above.

Australians are quite wealthy - on average (at the moment!) - compared to our Nth American or Euro cousins.

If only those damn idiot Captiva buyers bought a Territory! And if the NSW and Qld govts werent traitors too. They didnt have a high enough Aussie % in their fleets.

[MITCHAY]

Originally Posted by simon varley

can the car industry work here? Absolutely.

but I think only with relatively small volume niche products. There is no way we can ever get the real economies of scale without exports, and the labor costs and FTA's wit the Asian markets mean we will always loose out.

Look at the small successful companies in England though - Caterham, Lotus, Triumph, Morgan - even Rolls, Aston and Jag - they make high profit margin low volume products so I reckon it's still possible here with the right product.

Exactly what I was thinking. Niche is the only way forward but of course would still need relevant support.

That way our high labour cost and everything else is irrelevant. People already pay stupid amounts for high end cars here in comparison to the rest of the world.

The only problem would be overcoming the reputation (perceived or actual) that has no doubt played a part in the demise of both Holden and Ford.

[Maka]

Originally Posted by GQ_Smooth

Saab has shown how a global but relatively small Auto manufacturer will struggle to remain competitive and up to date, and will eventually be taken over by one of the majors when things get tough. The major players budgets are far to imposing to make a comparable car.

Saab contributed to their own demise by selling underdone vehicles that were technically bland & not very innovative. An new totally Australian car manufacturer starting from scratch with plenty of $$$ & a niche cleansheet design that targets the needs of its core market with everything the Saab's lacked could be successful if there's enough vision & determination imo.

cheers, Maka

[Spammy]

Originally Posted by simon varley

can the car industry work here?

Look at the small successful companies in England though - Caterham, Lotus, Triumph, Morgan - even Rolls, Aston and Jag - they make high profit margin low volume products so I reckon it's still possible here with the right product.

Lotus lost 167m quid last year
Caterham made a 600,000 quid profit in 2012
Jag appears to making a profit (hard to tell as the Indian owners lump the results togther with Land Rover) but did lose money for 30 years priior
Do Triumph make cars?
TVR appears to be dead forever now
Morgan makes a very modest profit some years
Aston lost 24 m quid in 2011 and 21 in 2012

[PlukaDuck]

Originally Posted by turbodewd

I agree with Simon above.

Australians are quite wealthy - on average (at the moment!) - compared to our Nth American or Euro cousins.

If only those damn idiot Captiva buyers bought a Territory! And if the NSW and Qld govts werent traitors too. They didnt have a high enough Aussie % in their fleets.

YEAH RIGHT . But agree with other


Australia’s Personal Debt Reported As Highest In The World
http://www.creditcardfinder.com.au/a...the-world.html

[Spammy]

Originally Posted by simon varley

can the car industry work here? Absolutely.

but I think only with relatively small volume niche products. There is no way we can ever get the real economies of scale without exports, and the labor costs and FTA's wit the Asian markets mean we will always loose out.

Look at the small successful companies in England though - Caterham, Lotus, Triumph, Morgan - even Rolls, Aston and Jag - they make high profit margin low volume products so I reckon it's still possible here with the right product.

All of those brands have very long and well regarded pedigrees --- name me a few start ups that have managed to survive, be profitable and grow beyond a cottage indurstry in the auto industry.

[Bossxr8]

Yeah you are right Spammy, niche manufacturers rarely survive. Just look how many different owners and how many bankruptcy's Lamborghini has had, Maserati too. Lotus is basically going nowhere, TVR and all the others are already gone. Without the backing of a major manufacturer prepared to put the money in and with the cost sharing involved with sharing parts and platforms from other cars, you are basically dead in the water. The new Lambo Hurrican will share a platform with Audi R8 for example.

[XR Martin]

Bentley and Rolls didnt make money for decades until the krauts bought them.

[Road_Warrior]

Originally Posted by simon varley

can the car industry work here? Absolutely.

but I think only with relatively small volume niche products. There is no way we can ever get the real economies of scale without exports, and the labor costs and FTA's wit the Asian markets mean we will always loose out.

Look at the small successful companies in England though - Caterham, Lotus, Triumph, Morgan - even Rolls, Aston and Jag - they make high profit margin low volume products so I reckon it's still possible here with the right product.

This is what i'm talking about. But not 'niche' as in supercars, niche as in SUV's and commercial vehicles to fill that gap that will be left globally when Toyota retire the 79 series.

[aussie muscle]

Originally Posted by Windsor220

I dont really see why Toyota ever built the Camry here. Didnt make much sense.

You'd be better looking at niche products, like cheap sports car (DRB) or ruggedized offroader. doing a mainstream car is getting too hard without protection or assistance.

[Spammy]

Niche market SUV???

BMW already sell 4 different sizes of SUV with however many different engines/ Mercedes have 4 SUV sizes and loads of engine combos/ Audi have 3 SUV sizes with loads of differnet engines. Toyota, Mazda and Nissan all have god knows how many SUV variants. Jeep sell SUVs in every size...add in Fiat/Renault/PUG/VW/Kia/Huyndia and you get another 20 or so SUVs

What niche in the SUV market is currently not over catered for?

[Road_Warrior]

Originally Posted by Spammy

Niche market SUV???

BMW already sell 4 different sizes of SUV with however many different engines/ Mercedes have 4 SUV sizes and loads of engine combos/ Audi have 3 SUV sizes with loads of differnet engines. Toyota, Mazda and Nissan all have god knows how many SUV variants. Jeep sell SUVs in every size...add in Fiat/Renault/PUG/VW/Kia/Huyndia and you get another 20 or so SUVs

What niche in the SUV market is currently not over catered for?

Originally Posted by Road_Warrior

This is what i'm talking about. But not 'niche' as in supercars, niche as in SUV's and commercial vehicles to fill that gap that will be left globally when Toyota retire the 79 series.

And by way of reference Toyota sells roughly 6500 70 series Landcruisers globally - per month.

[Spammy]

Probably a half decent business case for building a replacement for the 70 series == but not here in OZ given high cost of labour. I think Toyota/GM / Ford all worked that out sometime over the last few months,

[jpblue1000]

we should be building wind turbines, or packaged power generators or trains or ships, flat pack houses, bridges. High value, complex, technological items where the labour cost and vagaries of international currency is partially irrelevant. We should be building things others cant and not giving our secrets away so they can build it after buying one.
Australians can make stuff, just not mass produced cars profitably. we need to think smart about building what others cant or wont.

JP

[DoreSlamR]

[QUOTE=PlukaDuck]
1. Holden Captiva - 2155

Scary.

This is one of the reasons why the Australia car industry is gone to the dogs.

I'd hazard a guess the Craptiva is the cheapest SUV option?

Do people not test drive cars back to back anymore? It is the worst built out of the 10, yet is the best seller.........

I would love to see a survey of new car buyers, see what goes through their heads when purchasing. Not a lot for some I suspect!

[Spammy]

Originally Posted by jpblue1000

we should be building wind turbines, or packaged power generators or trains or ships, flat pack houses, bridges. High value, complex, technological items where the labour cost and vagaries of international currency is partially irrelevant. We should be building things others cant and not giving our secrets away so they can build it after buying one.
Australians can make stuff, just not mass produced cars profitably. we need to think smart about building what others cant or wont.

JP

Manufacturing is 7% of our economy and yes we need to play to our strenghts and concentrate on high value, high tech --- not building cars with a backdrop of a small local market, high labour costs, barriers to export and cars that are past their use by date.

[Spammy]

[QUOTE=DoreSlamR;5018447]

Originally Posted by PlukaDuck

1. Holden Captiva - 2155

Scary.

This is one of the reasons why the Australia car industry is gone to the dogs.

I'd hazard a guess the Craptiva is the cheapest SUV option?

Do people not test drive cars back to back anymore? It is the worst built out of the 10, yet is the best seller.........

I would love to see a survey of new car buyers, see what goes through their heads when purchasing. Not a lot for some I suspect!

Buyers who really care about handling and precision build quality buy a BMW or Merc. Everyone else fights it out on features, cost and percived brand value.

Where does that leave a car that is not a Merc or BMW, has poor brand perception, is not a price leader and has limited features?

[DoreSlamR]

Yeah it's a tough market I know.

It's sad, Holden will be gone in a few years, but we'll still probably be able to buy these "gems" like Captiva and cruize and trax

[Rockape]

How many of those Captiva buyers thought they were getting Australian made ? It is a Holden after all.

[JG33]

Originally Posted by turbodewd

I agree with Simon above.

If only those damn idiot Captiva buyers bought a Territory!

Funny you say that, friends of ours had a Territory sold it and bought a Captiva because it was cheaper to run than the Territory and they're well off.

Go figure.

[Pepscobra]

As a new father, I am petrified for the future of my children... what will people be doing for work in 20-30 years in Australia?
All the iron-ore will be gone...
Coffee will be $28/cup...
Where will our economy be?

[PlukaDuck]

[QUOTE=Spammy;5018449]

Originally Posted by DoreSlamR

Buyers who really care about handling and precision build quality buy a BMW or Merc. Everyone else fights it out on features, cost and percived brand value.

Where does that leave a car that is not a Merc or BMW, has poor brand perception, is not a price leader and has limited features?

Spammy.
Your dreaming if you think a merc and a BMW is ALL THAT.
There taxis in Europe. Just like the falcon and commodore is here.
Another example of a mislead ausrtralian believing he is something special because he drives a car that an advertisement says makes him special if he drives it.
Here is a link to your overpriced EURO TRASH being flogged to death by American muscle
http://www.streetfire.net/video/corv...ago_701287.htm

[PlukaDuck]

Originally Posted by Pepscobra

As a new father, I am petrified for the future of my children... what will people be doing for work in 20-30 years in Australia?
All the iron-ore will be gone...
Coffee will be $28/cup...
Where will our economy be?

I agree with you peps
But don't worry because there is enough iron ore in this country to last 300 years.
Brazil is the biggest iron ore producer in the world
Don't believe all the **** you read in the Australian media
I have worked all over the world in oil and gas and mining and believe me we are just a drop in the ocean here.
But unfortunately we are fast becoming a 2nd world country