Car manufacturing ends; but heavy vehicles roll on.

2016 Nov

It’s the end of the line for automotive manufacturing in Australia this week. The final Holden V6 engine rolled off the production line in Port Melbourne after 80 years of manufacturing.

What remains, however, is a healthy AUD$1.8 billion truck and bus manufacturing industry.

According to IBIS World, Volvo Group Australia, PACCAR Australia and Iveco (manufacturers of Kenworth, Mack and Iveco trucks, respectively) will become the automotive industry’s new major players, alongside numerous small-scale engine manufacturers; and all appear to be committed to local build.

Volvo has recently announced its intention to build a new Australian headquarters at its existing headquarters in Wacol, Queensland. In addition, Iveco has also outlined its local commitment, with continued manufacture of light, medium and heavy commercial vehicles (vans, trucks and buses) at its Dandenong plant.

A recent article from Behind the Wheel, reports, “The popular heavy vehicle brand is happily building trucks and buses in Melbourne and say they are here for the long run.”

IBIS World indicates that activity in the heavy vehicle sector requires a higher level of labour intensity than the passenger vehicle market. This is certainly the truth at Iveco’s manufacturing facility, which has been around since the early 1950’s, as the company focuses on manufacturing bespoke vehicles tailored to their customers’ requirements. Every vehicle that rolls out is unique.

In an interview with Behind the Wheel, Ron Grasso, Head of Corporate Affairs at Iveco, says that keeping manufacturing in Australia is not easy with our high labour cost, and with the departure of the main car manufacturers, costs of procuring inputs locally will rise.

The key will be continued innovation. This is a philosophy adopted by the company at the manufacturing plant level, within its R&D centre which employs 30 engineers, as well as through its university and intern program.

We need to build; not just design

Ron Grasso emphasises how important it is to, “build things, not just design things; that way, your workforce understands the practicalities.” Investment in new technology is really important – to improve productivity without diminishing the ability to be flexible to produce bespoke product. Iveco run a comparatively manual process, which in many ways is quite deliberate, to enable this flexibility.

Understanding the unique requirements of the Australian environment has also helped the company secure a recent supply contract with the Victorian Department of Environment, Land, Water and Planning (DELWP) to supply haulage vehicle designed to haul essential plant and equipment to bushfire zones.

Bus manufacturing

Australian built buses comprise a smaller part of the heavy vehicle sector but are expected to grow, as cities across Australia and Asia look to modernise their public transport fleets. The development of electric vehicle fleets is a key requirement driven by governments worldwide seeking to reduce carbon emissions.

According to Transit Australia Group’s CEO, Michael McGee, in an interview with the Queensland Courier-Mail, “the Global Financial Crisis had slowed bus replacement but cities like Sydney and Melbourne were now modernising their fleets”.

Transit Australia Group’s manufacturing arm, Bustech, featured its next generation, prototype electric bus at the Australasian Bus and Coach Expo in Melbourne in 2015.

The Queensland-based company has just announced that it has won a contract to supply the South Australian Government with low emission and electric buses for trials.

The company plans to employ around 100 workers at its new factory in Adelaide to deliver vehicles to meet this contract, and to supply future contracts both domestically and overseas.

FORM2000 fits in the supply chain

FORM 2000 is a committed supply partner to the transport manufacturing sector and is doing its bit to ensure that the sector remains competitive against imports.

As Simon Mollison, General Manager of FORM2000 explains, “Transport manufacturing looks to suppliers like FORM2000 to supply on a JIT basis, providing consistent high quality components. FORM2000 has invested in people, processes and factory automation to drive down cost, provide consistent quality and develop processes to ensure supply chain requirements are met.”

FORM2000 is committed to Australian manufacturing and its role as a sheet metal component supply chain partner.

“It’s in our best interests; we don’t supply direct to end-users; our customers are themselves manufacturers – without them we wouldn’t have a market” says Simon.

Protecting Australian industry is all about “manufacturing the future".

Further Information

IBIS World - Stats and facts on the manufacturing sector

Behind the Wheels interview with Iveco

Bustech awarded contract to manufacturer electric buses in South Australia

Posted on Wednesday November 30, 2016 Permalink Chapter: Blog Posts

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