CKD + DIY = WIN
Australia’s ABC News recently published an article detailing the many ‘foreign’ car brands that used to assemble new vehicles in Australia.
Forget Ford and Holden. Some of the brands will probably surprise you.
But what happened? Why aren’t they still here?
Well, to cut short a generations-long tale of global market competition, government disinterest and our dependence on doing things the easy way, the companies that assembled these vehicles gradually closed up, culminating with the last locally made new car rolling out in 2017.
You can add in exchange rate issues and migrating local consumer tastes towards vehicle types already made elsewhere.
The costs of quitting local carmaking have been significant. Most of them aren’t financial. Some are social and generational.
But it’s not all lost.
The skills needed to design, engineer, and manufacture new cars from scratch haven’t disappeared from Australia, as some people claim. They’re still here in Oz.
We use them every day in our business. And we’ve been using them for almost 30 years.
And keep this in mind:
Consumer desires for locally tailored cars hasn’t changed that much.
It’s evidenced by the success of our made-for-Australia new-car enhancement programs for major carmakers (like our WARRIOR by Premcar program for Nissan, and a pile of other projects we aren’t allowed to talk about), where we re-engineer, develop and secondary manufacture specific imported models for local conditions.
How do we build on this?
Three letters: CKD.
Complete Knock-Down (CKD) kits involve a carmaker exporting the necessary components to make its cars and assembling them in another country.
It often involves the use of componentry from suppliers in the destination country.
In Australia’s case, CKD would be a great way to:
- Assemble finished new cars with local-market changes that enhance performance and styling without the automaker having to create an Australia-specific series in its home factory
- Introduce certain new-car models that otherwise would not have been made available for sale in Australia
- Give car brands new competitive advantages by creating new and elevated levels of appeal to many local new-car buyers
- Encourage technology transfer (our company’s engineering and manufacturing skills used in carmaking are also used in defence and aviation projects)
- Create new jobs, especially in supplier companies, and boost specific domestic industries
- Use it as a lead-in to wider local manufacturing growth
- CKD programs also allow exclusively left-hand drive models to be built-up in right-hand drive format, making the conversion simpler and more cost-effective
All of this creates specific new cars without the vast cost of reinstating all of the primary manufacturing elements needed to make new cars from scratch, like we did in Australia for just over a century.
- No earth-shaking industrial stamping plants to punch out body panels like roof sections
- No expensive full-body e-coating facilities and large-scale industrial painting plants
- No big-scale metal-casting plants to make very specific components
- And so on.
(NOTE: All of the above can be developed and implemented later, step-by-step.)
And the up-side of all this?
- Australian consumers get more of the cars they want
- Automakers get to branch further into Australia’s profitable new-car market without spending years redeveloping existing models and creating new ones – all while avoiding extra primary manufacturing costs in their home factories
- And Australia gets back to work in carmaking – and gains all of the benefits it brings
Premcar’s partner company in South Africa already does this, very successfully.
We’ve done the financial maths on CKD in Australia, but this isn’t just about making money.
And don’t think China has now ‘run off’ with the global car industry, and that tariffs mean a permanent ‘no’ to setting up shop.
The idea of CKD carmaking in Australia is also about societal capabilities, generational skills, and the positive effects that come with an economy and society that tackles more difficult challenges to sustain itself.
If, as a country, we import every single manufactured item, then we’ll end up never knowing how to make anything.
And this means we’ll always be dependent on a friendly neighbour somewhere in the world.
And dependency relationships like these are far from ideal for future generations.
CKD + DIY = WIN.
About Premcar:
Premcar Pty Ltd is a leading Australian vehicle engineering business that specialises in the automotive, defence and aerospace industries. For more than 25 years, global car-makers have made Premcar their go-to partner for the complete design, engineering and manufacture of niche-model new cars, full-scale new-vehicle development programs, and electric vehicle (EV) conversions and manufacturing. Premcar’s body of work is extensive. It is the name behind more than 200,000 new cars and 55,000 new-vehicle engines. The company has delivered technical advancements and sales success for major car brands from Europe, the USA, Japan, China and Australia. Visit premcar.au.
