Despite years of bad news about the Australian automotive industry, there are actually some 40 more manufacturers operating in the sector today than there were in 2015. With $640m in export revenues, and further increases expected, a mood of positive business sentiment is helping to drive our automotive aftermarket manufacturers forward, with product innovation flourishing. By Carole Goldsmith.

It’s been two years since the last of the major car manufacturers ceased vehicle production in Australia, when GM Holden followed in the footsteps of Ford and Toyota and closed its manufacturing operations here. The automotive aftermarket manufacturing sector has consequently had to move with the changing market, and the signs are currently very positive.

In June, the Australian Automotive Aftermarket Association (AAAA) published research conducted with ACA Research to evaluate the state of the market. It reveals that 300 automotive manufacturing companies operate in Australia, up from 260 in 2015 (when the AAAA last surveyed the sector). Although the sector’s combined annual revenue has dropped from $5.2bn to $4bn and employment is down from 21,000 to 9,800, the research also shows that 93% of the automotive manufacturers surveyed expect revenue to grow, and 82% expect export volumes to increase.

Lesley Yates is the AAAA’s Director – Advocacy, Marketing & Research, and Convenor for the AAAA’s Automotive Products Manufacturers and Exporter Council (APMEC). She is very enthusiastic about the sector’s growth and the study’s positive outlook.

“It is very important to realise that this is the first research we have done since the withdrawal of the car assemblers,” she explains. “The increase in the number of automotive manufacturers is very encouraging. The other great thing about the research is how optimistic and globally focussed our automotive manufacturers are. There’s reinvention, new ventures and innovation driving the increase in the number of auto manufacturers in Australia.”

Yates adds that while Australia remains the core customer base for most manufacturers, 70% of these companies are exporting their products. The combined export revenue within the sector currently sits at $640m, with the US remaining the key export market, ahead of Europe, NZ and the Middle East.

The AAAA is an independent national industry association with 2,500 member companies in all categories of the Australian automotive aftermarket. These include manufacturers, distributors, wholesalers, importers and retailers of automotive parts and accessories, tools and equipment, as well as providers of vehicle service, repair and modification services in Australia.

“It has been a challenging time for us following Ford, Holden and Toyota leaving Australia, but this landmark research has now shed an important light on the steady growth in the number of companies and the increase in product innovation in our industry,” says Yates proudly. “We are still here, and we are encouraged by the increase in exports and business confidence. These findings are a catalyst for further optimism and growth within automotive manufacturing.”

Yates and her colleagues are currently very excited about the AAAA’s new Auto Innovation Centre (AIC), due to open in Mulgrave, south-east Melbourne by the end of 2019. The AIC is a joint initiative to support the development of new automotive aftermarket products by Australian advanced manufacturing businesses, with the Federal Government contributing $3.6m and the Victorian Government $600,000. Businesses using the AIC for R&D activities may also be eligible for various State and Federal Government grants aimed at further stimulating innovation in the sector.

“They will have access to services and machines including base OEM (original equipment manufacturer) vehicle data and measurements, 3D scanning and printing, measuring sessions, technology transfer and rapid prototyping,” says Yates. “New vehicles will be on site for manufacturers to design and build prototype products for it, by using the equipment in the AIC.”

AMT spoke to two member companies of the AAAA and the APMEC who have been achieving an impressive level of success manufacturing products for the automotive aftermarket: Milford Industries and Harrop Engineering.

Milford Industries – Award-winning designs

Milford Industries’ Ult1Mate Next Gen Towbar is a 2019 Good Design Award winner in the automotive and transport product category. Good Design describes the Ult1Mate Next Gen as the new gold standard in towing. Milford won the award for its patented HitchHush end cap, which when coupled with a high-tech, precision-made three-piece design, provides maximum strength, silent operation and failsafe durability. It’s a product of advanced design and manufacture.

“This Good Design Award is a great honour for Milford in recognition of our skilled team’s commitment to outstanding design and innovation,” says Greg Spooner, General Manager at Milford Industries. “This adds to Milford’s collection for also winning the Most Innovative Product for the Ult1Mate Next Gen Towbar at this year’s AAAA Auto Aftermarket Expo. We are now looking at the Award’s benefits since the October launch of the Next Gen Towbar to market.”

Spooner has been at the helm at Milford for the past decade after 30 years in auto retail and wholesale sales and distribution. The company was founded by John Milford Rees 50 years ago and John’s family are still involved in the business as directors and executives. With more than 70 employees within the Milford group, focus is applied to design, testing, manufacturing, sales, marketing and distribution.

Based in the Adelaide suburb of Camden Park, Milford operates a national network of distributors across Australia and New Zealand, and is also building on international export opportunities. The company is a leader in vehicle load restraint devices and produces equipment within the occupant protection and towing segments to suit all manner of passenger, light commercial, 4WD and sports utility vehicles. It is best known for its world-renowned Milford Cargo Barrier. Spooner explains that Milford’s cargo barriers and towbars have been purchased by vehicle importers, manufacturers and the aftermarket sector.

“Milford has been conducting undergraduate research projects on the Next Gen Towbar program, working with engineering students, from Adelaide and Flinders Universities,” says Spooner. “Flowing out of these projects, several of those engineers are now in full time employment at our company.

“Along with the research, we have been developing domestic and international patents for these towbars. One of these patents is for the HitchHush noise reduction system, designed to provide a silent tow bar hitch, negating the need for tools, adjustment and fitment hassle.”

Spooner downplays the impact that the closures of the major car plants had on the automotive aftermarket.

“The auto OEMs departing Australia have not necessarily had a negative effect on the aftermarket sector,” he says. “Business activities have always focussed on this important channel, regardless of whether vehicles are locally sourced or imported. Business has been very busy at Milford. We have a lot of new cargo barriers and towbars to bring to the market.”

Milford also runs a NATA (National Association of Testing Authorities)-certified laboratory for conformity assessment and testing of its products and services. The company’s test capability has been significantly bolstered by the recent commissioning of its world-leading DynaLoad  dynamic vehicle/towbar testing apparatus. Milford also employs digital 3D scanning, FEA (finite element analysis) high-speed photography, and CAD modelling as part of its development process.

“This year, we have also expanded our production site and have installed a significant amount of new equipment including an automated pre-treatment powder coating line,” adds Spooner. “Milford has an ongoing interest in bringing innovative products to market, so keep an eye on our website.”

Harrop Engineering – Supercharging the auto industry

As soon as you walk in the front door of Harrop Engineering in Preston, north-east Melbourne, you get a sense of high-performance driving in action. Images of motorsports vehicles, engines and their components are on display. You can even see the first lathe that the founder Len Harrop used when he started the business 64 years ago; today, Len’s grandson Tim Harrop is the company’s Operations Manager.

Heath Moore, General Manager at Harrop, provides a tour of Harrop’s high-tech advanced manufacturing site. Employees are busily engaged in setting and operating the twenty-plus Mazak CNC machines distributed around the factory. Several co-ordinate measuring machines are also in operation, verifying product accuracy. The company is currently producing heavy-duty mining vehicle brake components for an industrial customer, while in the Harrop Performance Centre, the team is developing a supercharger for the new Suzuki Jimny SUV, with supercharger testing undertaken in its supercharger and chassis dyne cells.

“The auto OEMs use Harrop’s superchargers to achieve fuel economy and performance targets on their high-performance models,” Moore explains. “They are essentially air pumps which deliver more air into the engine for enhanced performance. A supercharger system sells for up to $15,000 in retail stores.”

Moore points to images of vehicles on the office wall, including the Toyota HiLux, Holden Commodore and HSV Colorado, BMW and Ford Mustang. “We have done performance upgrades on all of those brands.”

Involved mainly in motorsport performance in the past, the company still has its own racing car, the Harrop Toyota 86 BRZ, which won the SA Time Attack 2019 Club Sprint this year. It’s powered by Harrop’s TVS1320 Supercharger System and cooled by Adrad Performance.

Moore has always had a passion for all things mechanical and automotive, growing up on the family’s farm in the Hunter Valley. He has a Bachelor of Commerce and has been General Manager at Harrop for 11 years.

A long-time AMTIL member, Harrop is part of the Adrad group, an Australian manufacturer, importer and distributor of quality radiators, automotive air conditioning parts and other heat exchange products. Harrop is a modern world-class operation committed to technical excellence in total component design, engineering and manufacturing. The company employs around 60 people at its Preston head office and manufacturing site, with a further 10 staff at its non-ferrous casting facility, plus one person at its US office in Dayton, Ohio.

As well as superchargers, Harrop’s other main product lines include engine and drive line enhancers, braking and cooling systems.

“We export to 34 countries, with the bulk going to America, the Middle East, the UK and Asia,” says Moore. “The 4×4 sector has become an important part of our business and global vehicle platforms are attractive in the USA and the Middle East. One of our recent innovative products is a supercharger kit made for a RAM 1500 Pick-Up Truck. We will sell it locally and export it to the Middle East and USA.

“Around 70% of our business is in designing and manufacturing aftermarket products using our IP. The other 30% of products we manufacture for key industrial customers for speciality applications. An example of this: we designed and developed a supercharger system for the Yamaha V6 outboard marine engine for Nizpro Marine, and this increases the engine’s peak performance from 250hp to 450hp.”

Harrop’s Open House is an important promotional event in the business’ calendar. Moore explains that it started in 2015 to celebrate the company’s 60-year anniversary, and it has been held annually on a Sunday in October ever since.

“It’s a very popular family day for auto enthusiasts to see our latest performance products, participate in the vehicle Show and Shine Awards, plus there’s food trucks, children’s activities and factory tours,” he says. “The gold coin entry donation raises valuable funds for worthy charities’ Camp Quality and Victorian Police Legacy, and the event also helps us connect with the 125,000 people following the brand on social media”.

Harrop was not significantly affected by the closures of Holden, Toyota and Ford in Australia, according to Moore: “We saw it coming and had already sufficiently diversified our business. It was also a good opportunity for some companies to reinvent themselves in terms of products and markets.

“Harrop continues to grow through successful partnerships and our highly skilled workforce, delivering world-class products. Our development pipeline for supercharger, differential, brake and cooling product is securing our future growth and attracting new global customers to Harrop.”

www.aaaa.com.au
www.apmec.org.au
www.milford-auto.com
www.harrop.com.au