Fakta om fordonsindustrin - AUSTRALIA

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Swedish Trade Council in Australia

2006

THE AUTOMOTIVE INDUSTRY

AUSTRALIA

Fact Pack

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CONTENT

Overview Australian Manufacturing Industry

Australian Automotive Industry

Australian Construction Equipment Industry

Recommendations

References

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0 100 200 300 400

Printing andpublishing

Petroleum, coal,chemical

Metal products

Machinery andequipment

Food, beverageand tobacco

THE MANUFACTURING INDUSTRY IN AUSTRALIA IS SOMEWHAT LARGER THAN THE SWEDISH MANUFACTURING INDUSTRY- manufacturing in general is a very fragmented industry

• The total turnover of the Australian manufacturing industry is SEK 1,701 billion

− the Swedish manufacturing industry’s turnover is SEK 1,357 billion

• There are approximately 140,000 companies within the manufacturing industry in Australia

− 1 million employees

• The machine and equipment manufacturing is the second largest industry within manufacturing

• The average cost for an industry worker in Australia is SEK 152 per hour

5 largest manufacturing industries in Australia

Billion SEK

The automotive industry amounts 8% of the total manufacturing industry

Source: Australian Bureau of Statistics

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CONTENT



Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

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THE AUSTRALIAN PRODUCTION OF CARS AND COMMERCIAL VEHICLES TOTALS SEK 150 BILLION- relatively constant over the last 5 years

0

20

40

60

80

100

120

140

160

2000 2001 2002 2003 2004 2005

Domestic Export

Vehicles and engines

SEK 90 billionMotor vehicle body

SEK 13 billion

Components and accessories

SEK 47 billion

billion SEK Production cars and commercial vehicles industry in Australia

Export share of production 15 % in 2005

Source: IBIS industry reports; Key Automotive Statistics 2004 (Dept of Industry Tourism and Resources)

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ALMOST 400,000 VEHICLES ARE PRODUCED IN AUSTRALIA- over 75% of these are passenger cars

VEHICLE MANUFACTURERSVEHICLE MANUFACTURERS

2 manufacturers GM Holden Ford

LIGHT TRUCKS(41 000 vehicles)LIGHT TRUCKS(41 000 vehicles)

8-9 manufacturers Custom Coaches Volgren Australia 6-7 minor body

manufacturers

BUSES(900 vehicles)

BUSES(900 vehicles)

HEAVY TRUCKS(6 800 vehicles*)

HEAVY TRUCKS(6 800 vehicles*)

3 manufacturers Volvo Truck / Mack Kenworth Iveco / International

Trailer manufacturers Maxitrans Barker Krueger Vawdrey SX Trailers Haulmark

COMMERCIAL VEHICLES (48 700 vehicles)COMMERCIAL VEHICLES (48 700 vehicles)

PASSENGER CARS(340 000 vehicles**)

PASSENGER CARS(340 000 vehicles**)

4 manufacturers GM Holden Ford Toyota Mitsubishi

Source: Internet; Interviews

*excl. Trailers (6000)**incl. SUVs, excl. Utes

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Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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AROUND 340 000 CARS ARE PRODUCED IN AUSTRALIA EACH YEAR - Majority are larger cars

The Australian car production is concentrated on larger cars

A strong economy led to an increase in 2003-2004, but recently there has been a slight drop in production due to

Strong Australian dollar favouring import Higher petrol prices favouring smaller imported

cars New free-trade agreements with Thailand and the

US, making import tariff free from these markets General tariffs on imported cars has dropped

from 15 % to 10 % in 2005 and are scheduled to drop from 10 % to 5 % in 2010.

0

100 000

200 000

300 000

400 000

2001 2002 2003 2004 2005

Passenger Car Production in Australia Development the last 5 years

Vehicles

9Source: Internet; Interviews

Manufacturer Employees

Business Purchase decisions

GM Holden 8,200 Passenger cars HQ, Melbourne (VIC), Australia

Ford 5,000 Passenger cars HQ, Melbourne (VIC), Australia

Toyota 4,500 Passenger cars HQ, Melbourne (VIC), Australia

Mitsubishi 2,000 Passenger cars HQ, Adelaide (SA), Australia

THERE ARE FOUR PASSENGER CAR PRODUCERS IN AUSTRALIA- Purchase decisions are dominantly made at country headquarters

Pass

enge

r Car

s

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VICTORIA AND SOUTH AUSTRALIA MAIN HUBS FOR CAR PRODUCTION


Manufacturer Plant Models and focus

Production volume*

GM Holden Elisabeth, (Adelaide, SA)

Port Melbourne, (Melbourne, VIC)

Caprice,Statesman,CommodoreEngines

125,000

315,000 (engines)

Ford Broadmedows, (Melbourne, VIC)

Falcon (incl Fairlane)Territory

85,000

Toyota Melbourne (VIC) Camry 100,000

Mitsubishi Tonsley Park, (Adelaide, SA)

380 30,000

Bold = Country head office

Melbourne (VIC)•Ford•GM Holden•Toyota

*round off real production

Adelaide (SA)•GM Holden•Mitsubishi

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5-7 years ago, the Australian OEMs sourced almost exclusively within Australia Since then, especially Ford and GM-Holden have increased their global sourcing dramatically

Currently 80% of content are sourced locally, this is expected to decrease even further to 55% over the coming five years

Toyota and Mitsubishi are still more focused on working with local suppliers

Strong government

support

Strong government

support

Increased import and

export

Increased import and

export

Increased global

sourcing

Increased global

sourcing

A stronger Australian dollar, free trade agreements as well as general reduction of tariffs on cars (from 15% to 10% in 2005 and down to 5% in 2010) has led to more competition from imported cars

As a response, Australian OEMs have significantly increase its export, from 5 bn SEK in 1996 to almost 20 bn SEK in 2005

To support the domestic industry, the Australian automotive producers has received more than 10 bn SEK of assistance from the government over the past three financial years

THE PASSENGER CAR INDUSTRY IS SUPPORTED BY THE AUSTRALIAN GOVERNMENT

Trends within the Australian passenger car industry


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CONTENT



Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

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STRONG INCREASE IN PRODUCTION OF COMMERCIAL VEHICLES OVER LAST FIVE YEARS

Commercial Vehicle Production in Australia Development the last 5 years

Vehicles The commercial vehicle production in Australia is dominated by light trucks (mainly so called utes)

Often purchased by smaller business owners due to versatility and favorable tax treatment

A strong economy has led to a substantial increase in demand over the last five years for these

Demand for heavy trucks have also increased significantly due to the strong economy and high levels of business investments

All local manufacturers of heavy trucks have increased production as a result0

10000

20000

30000

40000

50000

60000

2001 2002 2003 2004 2005

Light Trucks Heavy Trucks Buses


14Source: Internet; Interviews

PURCHASE DECISIONS ARE MADE AT COUNTRY HEADQUARTERS ALSO FOR COMMERCIAL VEHICLES MANUFACTURERS

Com

mer

cial

veh

icle

s

Manufacturer Employees Business Purchase decisions

Volvo Trucks / Mack 1,300 Heavy Trucks HQ, Brisbane (QLD), Australia

Kenworth 750 Heavy Trucks HQ, Melbourne (VIC), Australia

IVECO / International

450 Heavy Trucks HQ, Melbourne (VIC), Australia

Custom Coaches 480 Busses HQ, Sydney (NSW), Australia

Volgren Australia 250 Busses HQ, Melbourne (VIC), Australia

GM Holden 8,200 Light Trucks/Utes HQ, Melbourne (VIC), Australia

Ford 5,000 Light Trucks/Utes HQ, Melbourne (VIC), Australia

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THERE ARE 10 COMMERCIAL VEHICLE MANUFACTURING PLANTS IN AUSTRALIA-Victoria main hub for commercial vehicle production


Manufacturer Plant Models and focus

Production volume*

Volvo Trucks / Mack

Brisbane (QLD) Heavy Trucks, 11 Volvo models, 11 Mack models

2,650

Kenworth Bayswater, (Melbourne, VIC)

Heavy Trucks, 9 models

2,500

IVECO / International

Dandenong, (Melbourne, VIC)

Heavy Trucks, 5 models

1,650

Custom Coaches Sydney (NSW), Adelaide (SA), Gold Coast (QLD)

Busses, 7 models

230

Volgren Australia Melbourne (VIC), Perth (WA)

Busses, 5 models

200

GM Holden Elisabeth, (Adelaide, SA)

Light Trucks / Utes, 4 models

20,000

Ford Broadmedows, (Melbourne, VIC)

Light Trucks / Utes, 1 main model

21,000

Bold = Country head office

*round off real production

Melbourne (VIC)•Ford•IVECO•Kenwoth•Volgren

Perth (WA)•Volgren

Brisbane (QLD)•Volvo

Gold Coast (QLD)•Custom Coaches

Sydney (NSW)•Custom Coaches

Adelaide (SA)•Custom Coaches•GM Holden

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Australia’s demand for freight is predicted to double over the coming 15 years Road transport expected to account for majority of this increase The domestic production (as well as import) of light and heavy commercial vehicles is expected to see stable volumes as a resultHigh freight

transport demand

High freight transport demand

High level of customizationHigh level of

customization

Commercial vehicles in Australia are subject to high levels of customisation The Australian market has unique applications, and some of the harshest conditions in the world for commercial

vehicles

Increased global

sourcing

Increased global

sourcing

The strong trend of global sourcing is affecting also the commercial vehicle industry in Australia and is significantly reducing local content in these vehicles

COMMERCIAL VEHICLE INDUSTRY IN AUSTRALIA EXPECTED TO CONTINUE TO BE STRONG

Trends within the Australian commercial vehicle industry


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Passenger Cars and Commercial Vehicles

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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THERE ARE ABOUT 200 TIER 1 AND TIER 2 AUTOMOTIVE SUPPLIERS IN AUSTRALIA

There are over 200 companies focusing on supplying the automotive industry in Australia

In addition there are several hundred companies that have automotive companies as customers, but are not focused on this group

There is a very high concentration of automotive suppliers in Victoria, followed by South Australia

Mirroring the location of the OEMs

Most companies have less than 100 employees and are family owned

Low High

Geographical concentration of automotive suppliers

Australian automotive suppliers


Perth Sydney

AdelaideMelbourne

Brisbane

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80% OF THE PARTS IN AN AUSTRALIAN MADE CAR ARE MANUFACTURED LOCALLY

Source: FAPM, IBIS industry report

Cables, bus systems, embedded systems

Australian Arrow Bosch SiemensVDO

Power train, exhaust systems, engine parts

Automotive Components Limited

ION Automotive Nylex

Cockpit, seats, dash-board, air conditioning

Air International Group

Nylex SiemensVDO Autoliv

T1 SUPPLIERST1 SUPPLIERS

Electrical systemsElectrical systems Interior equipmentInterior equipment PropulsionPropulsion BodyBody Running gearRunning gear

Body, glass, lighting Hella Pilkington Schefenacker

Suspension, brakes, axles, steering, tyres

Air International Group

Arrowcrest Group Bridgestone Dana FMP Group ION Automotive PBR Australia

20Source: FAPM

Manufacturer Employees Business Purchase decisionsAir International Group 1,400 Air conditioning, steering systems and seats HQ, Edinburgh (Adelaide, SA)

Arrowcrest Group 800 Steering gear systems and wheels HQ, Woodwille North (Adelaide, SA)

Australian Arrow 715 Electronic components HQ, Carrum Downs (Melbourne, VIC)

Autoliv Australia 450 Seat belts, air bags HQ Campbellfield (Melourne, VIC)

Automotive Components Limited 1,000 Engine components HQ, Dandenong (Melbourne, VIC)

Bosch 1,790 Electrical Eq. HQ, Germany

Bridgestone Australia 1,600 Tyres HQ, Clayton (Adelaide, SA)

Dana 1,400 Running gear Country HQ, Fairfiled (Sydney, NSW)

FMP Group 450 Friction material HQ, Ballarat (Melbourne, VIC)

Hella 600 Lighting eq. and plastic moulding Country HQ, Mentone (Melbourne, VIC)

ION Automotive 2,800 Powertrain and driveline solutions HQ, Richmond (Melbourne, VIC)

Nylex 800 Interior trim and fuel tank manufacturers HQ, Somerton (Melbourne, VIC)

PBR Australia 900 Brake system solutions HQ, East Bentleigh (Melbourne, VIC)

Pilkington 1,600 Glass components HQ, England

Schefenacker 940 Mirrors and lighting systems Country HQ, Lonsdale (Adelaide, SA)

Siemens VDO 350 Electronic and interior components Country HQ, Heidelberg Heights (Melbourne, VIC)

AMONG T1 SUPPLIERS MOST PURCHASE DECISIONS ARE MADE IN AUSTRALIA

Top

15 T

1 Su

pplie

rs

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THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs-main hub in Victoria

Sydney (NSW)•Dana

Melbourne (VIC)• FMP Group • Australian Arrow • Bosch• Automotive

Components Ltd• PBR Australia• Siemens VDO• Hella • Pilkington• ION Automotive• Nylex• Autoliv

Adelaide (SA)•Bridgestone•Air International Group•Schefenacker•Arrowcrest Group

Bold = Head office

Source: FAPM

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RELATIVELY SMALL NUMBER OF LARGER T2 SUPPLIERS IN AUSTRALIA

Source: FAPM

Cables, bus systems, embedded systems

Tyco Electronics Forgecast

Australia

Power train, exhaust systems, engines

Forgecast Australia OneSteel Orrcon Operations Diver Consolidated

Industries GUD Automotive Numetric

Manufacturing Arrowcrest Group

Cockpit, seats, dash-board, air conditioning

Nylex Diver Consolidated

Industries Forgecast Australia RMAX

T2 SUPPLIERST2 SUPPLIERS

Electrical systemsElectrical systems Interior equipmentInterior equipment PropulsionPropulsion BodyBody Running gearRunning gear

Body, roof, glass, doors, lighting etc.

OneSteel BlueScope Steel Nylex Forgecast Australia Orrcon Operations RMAX Diver Consolidated

Industries

Suspension, brakes, axles, steering, tires

OneSteel CMI Operations Numetric

Manufacturing Forgecast Australia Diver Consolidated

Industries

23Source: FAPM

Manufacturer Employees

Business Purchase decisions

Arrowcrest Group 600 Engine component parts HQ, Woodwille North (Adelaide, SA)

BlueScope Steel 2,800 Flat steel products HQ, Port Kembla (Wollongong, NSW)

CMI Operations 650 Suspension and brake components

HQ, Flemington (Melbourne, VIC)

Diver Consolidated Industries n/a Metallic fasteners HQ, Melbourne (VIC)

Forgecast Australia n/a Non-ferrous forgings HQ, Melbourne (VIC)

GUD Automotive n/a Filters HQ, Tottenham (Melbourne, VIC)

Numetric Manufacturing n/a Cast and extruded components

HQ, Adelaide (SA)

Nylex 800 Plastic moulding HQ, Sommerton (Melbourne, VIC)

OneSteel 500 Steel pipe and tube HQ, Sydney (NSW)

Orrcon Operations 500 Steel tube HQ, Salisbury (Brisbane, QLD)

Tyco Electronics n/a Passive electrical and electronics connectors

HQ, Brunnswick (Melbourne, VIC)

RMAX n/a Rigid Cellular Plastics HQ, Maribyrnong (Melbourne, VIC)

ALSO AMONG T2 SUPPLIERS ALMOST ALL PURCHASE DECISIONS ARE MADE IN AUSTRALIA

Top

12 T

2 Su

pplie

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THE T2 SUPPLIERS ARE LOCATED NEAR THE T1 SUPPLIERS- again, main hub is in Victoria

Source: FAPM

Bold = Head office

Adelaide (SA)•Arrowcrest Group•Numetric Manufacturing

Sydney (NSW)•OneSteel

Melbourne (VIC)•CMI Operations •Diver Consolidated Industires •Forgecast Australia•GUD Automotive •Tyco Electronics•RMAX•Nylex

Wollongong (NSW)•BlueScope Steel

Brisbane (QLD)•Orrcon Operations

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OEMs are continually pressuring their suppliers for lower prices, using global suppliers as benchmarks 3-8% annual reduction in prices expected for the coming two years

Increased focus on R&D

and Engineering

Increased focus on R&D

and Engineering

Outsourcing Outsourcing

Price reductions

Price reductions

To maintain profitability, most suppliers are outsourcing production of basic or semi-processed input, mainly overseas to low cost countries

80% of suppliers expect to increase outsourcing in the coming two years

To compete with supplier from low cost countries, Australian suppliers are increasing its focus on value added activities like engineering and R&D to better meet the demand of the OEMs and add additional value to their products

Trends within the Australian automotive supplier industry

THE AUSTRALIAN AUTOMOTIVE SUPPLIERS ARE CHALLENGED BY CONSTANT DEMANDS FOR PRICE REDUCTIONS FROM THE OEMS


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Passenger Cars and Commercial Vehicles

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

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THE AUSTRALIAN PRODUCTION OF MINING AND CONSTRUCTION MACHINERY EQUIPMENT TOTALS ABOUT SEK 10,2 BILLION

0

2

4

6

8

10

12

2001 2002 2003 2004 2005

Domestic Export

Earth engaging eq.

SEK 3,8 billion

Wholesale salesSEK 2,8 billion

Concrete & asphalt mixersSEK 0,64 billion

billion SEK Production Mining and Construction Machinery Equipment in Australia

However, no production of construction equipment vehicles exist in Australia

Source: IBIS industry reports

Other specialised eq.SEK 1,8 billion

Services, repairs, adjustments SEK 1,3 billion

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CONTENT




Recommendations

References

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RECOMMENDATIONS FOR MAKING BUSINESS WITH THE AUSTRALIAN AUTOMOTIVE INDUSTRY

Recommendations for making business with the Australian automotive industry

3.3.

2.2.

1.1.

Country specific

3.3.

2.2.

1.1.

Industry specific

Australia is an easy country to do business in – English is spoken and the business culture is very similar to northern Europe’s

Respect should be have for the geographical distance and time differenceLocal support and/or presence in one form or another often a prerequisite for success

Australia is more hierarchical in it’s decision making than Sweden – establishing contacts on the right level is essential

Although purchasing decisions generally are made locally, global connections with the OEM parent companies are more or less a prerequisite for successfully winning business with them in Australia (e.g. GM in US, Toyota in Japan)

Given Australia’s geographical isolation, although local production is no longer necessary for local success, local engineering and warehousing capabilities is still seen a major advantage from the OEM and T1 suppliers perspective

The geographical isolation also creates a need for efficient supply chain management to be able to compete effectively (e.g. understand long lead time sourcing, operate HUB concepts to reduce transport costs)


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Overview Australian industry

Australian Automotive industry

Recommendations

References

CONTENT

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STC AUSTRALIA CAN SUPPORT SWEDISH AUTOMOTIVE SUPPLIERS IN MANY WAYS

Examples of services STC Australia provides

Tailor made market research to provide answers to the most important questions the Swedish company needs to understand when entering or expanding on the Australian market

Market AnalysisMarket

Analysis

Partner searchPartner search Identification and qualification of potential Australian partners (e.g.an agent or distributor) for the Swedish

supplier, utilising STC’s extensive network and experience from similar assignments

Customer RoadshowCustomer Roadshow

STC identifies the most important customers on the Australian market and contacts these to create an interest for the Swedish supplier. A roadshow is planned where the Swedish suppliers visits the customers with the highest potential to initiate concrete business discussions

Aquisition screeningAquisition screening

Screening of the Australian market to identify potential acquisition candidates and compiles profiles on these. STC also often assists in initial negotiations and operational due diligence.

Company establishment

Company establishment

STC handles all the administrative and legal requirements for setting-up a local subsidiary, including contacts with the authorities. Once the company is up and running, STC can also handle the ongoing administrative and financial issues, as well as provide hands-on business support

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STC HAS HELPED SEVERAL SWEDISH COMPANIES TO DO BUSINESS WITH THE AUSTRALIAN AUTOMOTIVE INDUSTRY

COMPANY PROFILE

One of the world’s leading suppliers of trucks, buses, construction equipment and power systems for marine and industrial use,

One of the world’s leading producers of heavy trucks, buses and industrial and marine engines..

Examples of previous STC Australia clients within the automotive industry

Documents

Fakta om fordonsindustrin - AUSTRALIA