New model of vehicle manufacturing industry to put Adelaide back in spotlight

Car building is returning to Adelaide. A few short years after Holden’s flagship V8s vanished, a new era is generating a whole new buzz.

• READ BELOW: Legend in driver’s seat

• READ BELOW: Changing face of motor industry

The first reaction to the idea Adelaide will be making cars again is often disbelief. “People ask us how this is possible, aren’t we flogging a dead horse,” says James Baulderstone, Australian projects director of industrialist Sanjeev Gupta’s GPG Group.

“We say this is a brand new industry, it’s not a conventional car.”

GPG Group aims to have its first models — a lightweight electric car — ready for sale in about Two-and-a-half years.

“We’re bringing life back to manufacturing cars. We’re looking at all the options to do that,” Mr Baulderstone says.

Modern technology and clever design will enable GPG to make a commercial success of an annual production run of 15,000 electric vehicles, he believes.

Low runs, innovative materials and the simplicity of electric vehicles — which need thousands fewer components — means less capital will be needed to get started and grow without needing to chase economies of scale.

This puts GPG and other new ventures in a different place from Holden which had to close its manufacturing plant in Elizabeth in 2017, just over a decade after production peaked in 2005 at 153,026 cars — including 60,518 for export.

In the past week, two deals were signed to build electric vehicles in Adelaide. It’s game on.

China’s BYD Co, an established player in the rapidly growing electric vehicle market, said it would build top-end passenger cars with South Australia’s EVANT in Edinburgh.

“The opportunity to create a new industry in Australia is there for the taking,” says Mat Fitch, boss of Precision Components and director of Fusion Capital, joint owner of EVANT.

“If we can fulfil our ambitions in northern Adelaide where our current facility is based, there would be a certain poetry around that given we were so integrally involved with Holden for so many years.”

The ACE Cargo, ACE Urban and ACE Yewt all share a common skeleton but have different body shapes. Pictures supplied by ACE-EV

Electric vehicles to be manufactured in Adelaide by Aldom Motor Body Builders. May 2019. Pictures supplied by ACE-EV

The second venture involves ACE-EV director Gregory McGarvie signing up Aldom Motor Body Builders owner Mark Haig to put together an electric vehicle based on a Taiwanese-German model.

Three variants — the Cargo van, Yewt ute and Urban city car — would use a common skeleton and motor system with just the body changing.

Mr McGarvie needs to raise $20 million but is confident investors will come to the party and the public will embrace electric vehicles when they see how low the running costs are.

“There’s been no real public backlash,” he says of recent debate.

“It’s just been the politicians.”

Australian Industry Group’s head in SA, Stephen Myatt, welcomes the green shoots of a revived industry.

“SA is well placed to contribute to any regrowth of the automotive sector in Australia, including as part of the global transition towards electric vehicles and other low-emissions vehicles,” he says.

“Beyond any tailored policies around electric vehicles, what would help this ambition is attractive and stable support for innovation, including through the R & D Tax Incentive, a productive workplace relations environment, and fostering a new energy-cost advantage, including through settling climate policy uncertainty.

“All major car manufacturers are introducing electric models, and there are potential opportunities for new entrants and for the relocation of ass­embly and supply chains.”

Australia already supplies components into global chains for electric vehicles, including Nissan Casting Australia which makes parts for the LEAF at its factory in Victoria.

“There is a little bit of Australia in every LEAF sold globally,” a Nissan spokesman says.

Australia also is plugging into related manufacturing with Queensland’s Tritium a global supplier of recharging points.

Lonsdale-based Redarc has forged a partnership with Norwegian comp­any DEFA to make charging points for homes, offices and commercial premises.

James Baulderstone, GFG's new Australian project director, pictured at their headquarters in Sydney. Picture: Britta Campion/The Australian

Mr Baulderstone says GPG Group is planning to build a fully fledged new vehicle.

Known here as the man who bought Whyalla’s steelworks, Mr Gupta’s empire also boasts the largest privately owned automotive component maker in the UK, so he knows the sector well.

In March, Mr Gupta’s companies bought French vehicle company Durisotti, adding to the French wheel maker and aluminium smelter already in its stable.

GPG is working with legendary British-based designer Gordon Murray on its Australian vehicle.

“He’s a fantastic fellow,” Mr Baulderstone says.

“People who know cars understand pedigree.

“He’s been working in design for decades from Formula One through to the space frame he’s developed which is lightweight but super-safe and super-strong and will give us that competitive edge.”

Mr Baulderstone is a former vice-president of Santos and most recently was spearhead for mining magnate Andrew Forrest’s plans to import LNG into NSW.

Gregory McGarvie ACE EV and Mark Haig managing director Aldom. Picture: Tait Schmaal.

A crucial decision will be whether to locate in Adelaide or Victoria.

“Both SA and Victoria were the heartland of the automotive sector,” he says. “We’re doing engineering studies now on what remains at Holden, what remains at Ford, what’s the supply chain around that, what support mechanisms are still in place.

“We’ll make a business case, economic decision about where the best place is to set up our manu­facturing facility.

“We’ve got strong interest in Elizabeth, but we do have to go through the business case.

“Working with governments is important and we want to see how the policy positions of state and federal governments play out.”

The industry under GM-Holden and other multinationals was already a leader in advanced manufacturing using robots, just-in-time and global supply and customisation.

Many of the new designs build on these skills with added flexibility from modulisation and use of materials such as carbon-fibre com­posites for lightness and strength but without the energy intensity of massive metal stamping machinery.

Components for the global supply chain for Nissan LEAF electric vehicles. The water jackets are made at Nissan Casting Australia in south-east Melbourne. The aluminium parts bear an Australian-made kangaroo insignia. Picture: Nissan Australia

Swedish company Uniti, which is headed by a couple of Australians, also has plans to manufacture in Australia — but says it’s not just about where and how to make cars.

“Are we just going to look at one trend, that is electric vehicles?” says Lewis Horne, chief executive of Uniti. “Are we going to ignore the confluence of three major trends — electrification, shared mobility and the on-demand economy.”

Uniti’s approach is to refine and road test a business model combining these trends, starting with a pilot using its Uniti One cars in Europe this year. Then, Mr Horne says, Uniti will bring “a bunch of cars” to Australia to bed down a local model.

Instead of individuals buying vehicles, a company would own, recharge, clean and service a fleet of cars with customers hiring them as required — something like the e-scooter trials that have been running in Adelaide.

A small business could make its deliveries or an Uber-style driver use the vehicle to provide a taxi service a few hours a day — without capital outlay and other costs of owning a car which sits idle most of the time.

Federal Chamber of Automotive Industries chief executive Tony Weber says the group is keen to support any new ventures but realises it is not an easy path.

“In light of the recent cessation of local automotive manufacturing, we are fully aware of the challenges inherent in large-scale automotive manufacturing,” he says.

The industry has been through lows and highs over more than 100 years. Government support ramped up to the mid 1980s and then was phased out, leading to collapse.

The new powers being plugged in will recharge the industry and drive it into uncharted territory.

Legend in the driver’s seat

— Take a virtual tour of Murray’s creations

If anyone has petrol running in their veins, that person would be Gordon Murray.

With 50 Grand Prix winners and a career spanning five decades with the likes of McLaren and Brabham, the man now collaborating with Sanjeev Gupta is a legend in the industry.

Gordon Murray, automotive designer.

His designs include 35 Formula One cars and the McLaren F1 road car — one of the greatest of all time.

Lately, he has brought the attitude of Formula One to push the envelope into the frontier of modern urban mobility.

He coined his manufacturing style iStream — an acronym for iStabilised, Tube, Reinforced, Exo-frame, Advanced Manufacturing.

Rather than combining hundreds of panels of stamped metal, it uses tubular metal with minimal structural, composite panels.

This month, Professor Murray, below, was awarded a CBE by Prince William for “services to motoring”.

And this week he launched a 948-page book chronicling his career, One Formula, and an online, virtual exhibition at www.oneformulagordonmurray.com where viewers can see the cars and even sit in the cockpits.

Commentator Murray Walker says in a foreword to the book: “He is very much a lover of rock music, ghastly shirts, fine wines and riding high-powered motorcycles — all of which makes him a top man for me.”

Changing face of the car industry

1856

Holden starts as a saddlery in Adelaide.

1907

Commonwealth introduces import tariffs to support Australian vehicle component and assembly industry.

1914

Holden makes its first car body using horse carriage building techniques.

1923

Holden opens Woodville factory.

1924

General Motors signs Holden to make bodies for imported GM mechanicals.

1925

Ford Canada opens plant in Geelong, producing the Model T.

1931

General Motors buys Holden.

1936

GM plans a uniquely Australian car.

1939

As the world goes to war, General Motors stalls Australian car plan.

1948

On November 29, 1948, Prime Minister Ben Chifley launches the first Holden car in Port Melbourne and declares “she’s a beauty”.

1951

Chrysler moves into Keswick.

1954

Volkswagen assembly plant opens.

1958

Holden body assembly division at Elizabeth begins.

1963

Toyota assembly line opens in Melbourne.

1964

Prime Minister Robert Menzies opens Chrysler’s plant at Tonsley.

1965

● Commonwealth publishes Motor Vehicle Manufacturing Plan.

● Holden factory in Elizabeth begins full vehicle assembly.

1966

● Import tariffs lift to 45 per cent.

● Nissan and Renault open

assembly lines in Australia.

1967

Prime Minister Harold Holt opens Chrysler’s Lonsdale engine plant.

1968

Holden’s first V8 — the Monaro — and the Kingswood and go on sale.

1972

Fully Australian-designed Falcon launched by Ford.

1976

Volkswagen assembly closes.

1975

Quotas set on imports

1978

● Import tariffs reach 57.5 per cent.

● Holden Commodore born, adapted from a GM sedan from Germany.

1980

Chrysler bought out by Mitsubishi.

1981

Renault closes Heidelberg plant.

1985

● Government support peaks — with import tariffs, quotas, duty concessions and export facilitation.

● John Button plan begins winding down support including tariffs.

1992

Nissan closes assembly line.

1996

The Commodore starts its 14-year run as Australia’s favourite car.

1997

Industry Commission report to Treasurer Peter Costello says: “History shows that the higher the level of assistance to the industry, the poorer the industry’s performance.”

1999

Luxury Car Tax legislated. It remains today at 33 per cent on cars above $66,331 or $75,526 if fuel-efficient.

2001

Reborn Holden Monaro goes on sale. Detroit so impressed that they plan to export left-hand-drive versions to the US as a Pontiac GTO.

2004

Cohda Wireless founded in Adelaide, going on to become global leader in connected autonomous vehicle technology.

2005

● Mitsubishi launches the 380.

● The company closes Lonsdale.

2008

March: Last Mitsubishi made

at Tonsley.

2009

Toyota manufactures first Australian-made hybrid, a version of the Camry.

2011

Holden Cruze goes into production alongside the Commodore in the Elizabeth factory.

2013

● In federal parliament, Treasurer Joe Hockey challenges Holden to “come clean” on its future, saying “either you’re here or you’re not”.

Just days later, and one day after a Productivity Commission preliminary review, Holden boss Mike Devereux announces Holden will close its manufacturing operations in 2017.

● Deloitte report for Infrastructure Partnerships Australia says there is a “broad shift” to fuel-efficient and alternative vehicles such as electric cars with significant implications for road budgets based on fuel excise.

2014

Productivity Commission Report to Joe Hockey recommends shutting down assistance schemes.

2015

● Senate committee report calls for strategies on how industry can survive despite closures.

● SA legislates to allow testing of driverless cars on public roads — but public acceptance dented when vehicle carrying Transport Minister Stephen Mullighan hits inflatable plastic kangaroo.

2016

Ford closes its Broadmeadows and Geelong plants.

2016

Holden shuts its Port Melbourne engine plant after 68 years of operation and more than 10 million engines produced.

2017

● Federal Government responds to Senate committee, saying many schemes in place but concentration should be on design, research and component manufacture.

● Oct. 3 — Toyota closes Altona plant.

● Oct. 20 — Holden’s production number hits 7,687,675 vehicles made in Australia as its last car, a red Holden Commodore V8, comes off the line watched by 1000 workers.

2019

● Federal election brings electric vehicles into popular debate with Labor encouraging uptake and Coalition saying a policy is needed.

● NSW Government poaches Australia and NZ Driverless Vehicle Initiative to Sydney from Adelaide.

●Two separate deals herald manufacture of electric cars in SA.

● Industrialist Sanjeev Gupta declares plan to build electric cars in Australia and talks of opportunities in fields such as energy storage and data. “This revolution will occur irrespective of how Australia chooses to participate,” he says.