Despite the closure of the local car industry, there are still big reasons to be hopeful about the future of road transport manufacturing in Australia. By Brent Balinski.
Although many headlines were written in 2017 about the death of Australia’s automotive industry, no such thing ever happened. While Australia’s last three passenger carmakers became importers (while retaining a design and engineering presence) over 2016 and 2017, the sector still produces bus, trucks, trailers, special-purpose vehicles and components.
The last two years have seen Australia’s three truck manufacturers – Volvo Group, PACCAR and IVECO – grow, says Steve Bletsos, Senior Analyst, Research and Policy at the Victorian Automobile Chamber of Commerce (VACC).
“Bus manufacturing has also been buoyant as a result of increased state government expenditures on rail replacement buses and trams, particularly in Victoria and Queensland,” says Bletsos, adding that the sector’s employment level has remained “relatively steady” at around 33,000.
The VACC’s CEO, Geoff Gwilym, points out that the full effect of the end of local assembly by Ford, Holden and Toyota probably won’t be known for five or six years, but there are around 2,500 companies making vehicles or parts in Australia. And there are reasons to be optimistic about the sector, especially following the October announcement that SEA Electric plans to assemble as many as 2,400 electric vans a year in the Latrobe Valley.
Besides vehicle electrification, other trends such as connectivity offer potential for technology providers. This is an area Australia is “avidly experimenting in” at the moment, observes Ian Christensen, Managing Director of the iMove CRC.
This is a good thing, because Christensen predicts that what’s currently optional will soon become a requirement. In addition to being fuel-efficient, fit for purpose, and a pleasure to drive, vehicles will have to interact electronically with other vehicles, pedestrians, and infrastructure.
“For manufacturers of vehicles, Australia still fortunately has a bus and truck manufacturing centre,” says Christensen. “There is a need to be proactive, to build into the vehicle the sensing, the telemetry, and the interface to the driver. At the moment, it’s an option. It’s going to become progressively more and more a requirement and ubiquitous for the good functioning of the vehicle.”
Cohda Wireless – Vehicle to everything
Cohda Wireless was spun out of the University of South Australia’s Institute for Telecommunications Research in 2004. Its focus is on robust outdoor mobile communications, and it has found a “sweet spot” in the vehicle-to-everything (V2X) market, says CEO Paul Gray.
“Originally we were just doing the physical layer, the actual communications, over-the-air communications,” says Gray. “But now we’ve expanded to the whole software stack including applications which are actually giving warnings to the drivers and the like.
Cohda now provides technology to over 65% of autonomous cars in V2X trials, is a Tier 2 supplier of software, and also sells onboard units and roadside units for smart city applications. It uses contract manufacturers for this. Its technology has been used in trials for platooning for Peloton trucks, navigating bumpy terrain in an autonomous vehicle for Jaguar Land Rover, and recently demonstrated world-first localisation and collision avoidance in an “urban canyon” situation in the Adelaide CBD.
In 2017 the Cadillac CTS included Cohda’s software as standard, via its inclusion in Aptiv’s vehicle-to-vehicle communications modules, which generate safety warnings.
“That vehicle started production last year, and then we also have a design with VW for a vehicle going into production next year,” says Gray. “Again, as a Tier 2 vendor; so the Tier 1 supplier is LG Electronics.”
Gray believes this an area where Australian automotive manufacturers have a real chance to play a role globally: “I can imagine a future not too far away where all cars are capable of autonomous driving, and so that becomes a real disruption. In any era of disruption it is gonna cause some heartache for the incumbents, but also create opportunities for younger companies.”
Tradiebot – Opportunities for the early adopter
Mario Dimovski, founder and CEO of Tradiebot Industries, is also studying the relationship between disruption and opportunity, having recently completed a mini-world tour during which he attended several conferences themed around the Internet of Things (IoT). He believes “everyone’s pretty much on the same starting line” and that fortune will favour the early adopters.
Tradiebot began in 2017 and aims to shake up the automotive repair industry by developing Industry 4.0-style solutions for it.
“What we’re doing is putting a lot of effort in … to demonstrate how in other industries this stuff is being used,” says Dimovski. “We’re saying ‘It’s already being done: robots are performing cataract surgery!’ Why not do some labour-intensive auto stuff?”
The company announced two projects using robotics applications in 2018, named Repair-bot and Prep-bot. Repair-bot uses 3D printing for same-day mending of plastic trim and assembly components, and is being brought to reality through an Innovative Manufacturing CRC project with Swinburne University and AMA/Gemini Group.
Prep-bot involves the University of NSW, Capital Smart, PPG Industries and others, and is supported by an Advanced Manufacturing Growth Centre (AMGC) grant. This aims to create a control system and robotic solution that will repair damaged panels (for example by scuffing or painting) using CAD files. Tradiebot aims to sell this solution through PPG’s value chain once the technology has been validated.
A third project with Deakin University will create a training platform using augmented and virtual reality. Tradiebot has spent 2018 launching these projects and preparing the groundwork for further development over 2019.
“Some stuff we’ve identified as pretty much ready to go and ready to market now and are developing solutions around it,” Dimovski explains. “And then there’s some that we’ll look at later on and take it on as a project.”
With an estimated combined shortage of roughly 6,000 panel beaters and spray painters, Dimovski says the repair industry is in serious need of automation, as well as ways to make training more appealing.
“What we’re doing is we’re tackling problems that are in the industry,” he says. “It’s just a given. If it’s not going to be us, it’s going to be others following suit.”
For 2019, the company plans to begin rolling out its solutions, which might be an 18-24 month process, and will exhibit some of these at the Australian Automotive Aftermarket Association’s Collision Repair Expo in April.
“What we’re trying to do is to be first to revolutionise or evolutionise our industries,” Dimovski adds. “And it’s just the new phase of manufacturing, really.”
Volgren – Agility in delivering quality
According to Volgren CEO Peter Dale, his company will have produced 600 buses in 2018 by the end of December, putting it on track for its best volumes since 2011, its record year. Volgren was established in 1979, and has been owned by Brazil’s Marcopolo since 2017. Dale puts the bus body manufacturer’s performance down to its speed in adapting to customers’ and partners’ needs, its flexibility, and its high quality.
“It really needs to be a niche market, you know we’re not a commodity producer,” says Dale, citing recent successes in Japan, where the company exported 29 low-floor buses this year. “We’re very much a highly customised product, and so you look at the Japan market: right-hand drive, high quality demanded, and a specification that is quite exacting. They’re all things that we do in Australia, and they’re all things that are required to be successful in Japan, so we’ve just got to align that within what could be a niche market.”
Japanese companies could not produce a complete low-floor bus, and European providers could not satisfy Japanese regulations. This presented a niche where Volgren could operate.
Being first to market is another place where the company has identified an edge, this time a domestic one, for example in an Australian-compliant bus body on a new chassis product.
“The most recent example is Volvo releasing their Euro 6 diesel electric hybrid chassis,” explains Dale, citing the company’s work with Volvo’s team in Sweden on the delivery of eight hybrid buses for Latrobe Valley Bus Lines. “We’ve got a very good history of that, of being the first producer of Australian compliant bus body designs on new chassis products … whether it be the first double-decker, the first articulated chassis, or the first of a particular Euro emission chevy. There’s quite a lot of collaboration required technically to achieve a product.”
An area where Volgren is adapting to market changes is in bus electrification. Dale says he sees more change in powertrain technology in the next five years compared to the previous 30. Electric vehicles have gone from future strategy to operational planning.
An extreme effort to respond to this is a mission to strip a tonne out of the company’s Optimus aluminium bus bodies. For this, it is looking to aluminium alloys, using scandium, a wonder material that is fascinating to metallurgists but currently very expensive. This is being pursued through a project with Deakin University’s Institute for Frontier Materials.
Dale declines to name chassis partners, but mentions Volgren is currently also identifying the best-in-class electric powertrain technology to adapt to Australian conditions.
“So that is on the way,” he says. “And that’s exciting.”
SEA Electric – Minimal moving parts
An EV future is also an exciting prospect for SEA Electric, a Dandenong South-based integrator of drivelines. The company has been around for around 14 or so years, says CEO and founder Tony Fairweather, mainly as an importer and distributor of buses “and a few trucks”. SEA has developed five different drive lines, suited for vans, all the way up to 23.5-ton rubbish trucks or mixers. It also has global aspirations, albeit by licensing its technology rather than through export products.
“We’re an assembler of proprietary driveline technology built on a flexible architecture, and one that uses the world’s largest component suppliers,” says Fairweather. “Which makes it very efficient in terms of labour hours, which is why it works in high labour cost markets like Australia. It’s a CBU [completely built unit] product, but we’re still not producing vans. We’re importing the van as a glider – it comes in without an engine, transmission, exhaust system and so on, and we fit out our electric driveline technology.”
The company recently received a vote of confidence when Victorian Premier Daniel Andrews announced support for a new factory in the Latrobe Valley, part-funded by a rescue package designed to help the region’s economy adjust to the closure of Hazelwood Power Station. The factory is expected to produce 2,400 vans annually with the creation of 500 jobs; SEA currently currently employs around 50.
Some hold out hope that Australia can develop an industry around electric vehicles. One justification is that an electric engine is far less complex. It has around 20 moving parts, rather than around 2,000 for an internal combustion engine.
“There’s a whole lot of systems that used to wrap around the engine that aren’t there anymore, which means that the process of fitting that to a vehicle is easier,” reasons Gwilym. “Which means that if your focus is only on the body of the vehicle, then that does raise the prospect of building cars sometime in the future.”
Fairweather adds that the market segment offers a lot for Australian manufacturers, “though it’s a small window of opportunity to grab hold of” and there’s no time to be lost. He suggests there are many areas in components supply and technology development that the country could target and make a contribution to globally.
“We have the skills and capabilities in Australia to do so,” says Fairweather. “It might be around telemetry side of things, it could be around the provision of the communications and display screens. There’s a lot of smaller electric components like power steering pumps, air compressors, heating systems, air conditioning systems, inverters and controllers, that could all be developed and supplied out of Australia.”