The collapse of high-end automotive design firm Concentric Asia Pacific has put the poor state of Australia’s car sector in the spotlight again, with one car industry executive claiming Australia’s car makers have essentially halted development of new vehicles.
Concentric was one of Australia’s leading providers of computer design software and support to the automotive industry and also sold products and services to the defence sector.
The company was placed in the hands of administrator Peter Hillig of Sydney accounting firm Smith Hancock on 8 September. The company employs around 65 staff and is continuing to trade while the administration process gets under way.
Neither Hillig or a company representative were able to comment prior to publication.
Simon Marriott, chief executive of AARK Australia, another company involved in design and development work for the manufacturing sector, is bitterly disappointed to see a competitor strike trouble.
While he admits the collapse could result in some extra work for his company, he says it shows that Australia’s reputation as a leader in automotive engineer and design centre could be under threat.
“While we have been losing a lot of jobs at the factory floor level, we are now starting to lose their high-end jobs in areas like product development, technology development and engineering,” Marriott says.
“The problem we’ve got now is that we are not a smart industry anymore.”
Marriott says his firm, which provides rapid prototyping and tooling services, has been hit hard by the downturn in the automotive industry and has radically restructured his firm to move into other sectors, such as medical products and renewable energy.
He says the automotive industry remains dead.
“In the last six months, I don’t think I have got a single job from the car markers because they have just shelved their development plans.”
Marriott says the Federal Government is not doing enough to actually encourage Australia’s car makers – Ford, Holden and Toyota – to develop new cars and, more importantly, develop the right sort of cars.
He believes the industry’s shift into small cars is unlikely to work and says Ford’s decision to cancel plans to build a small car at its Melbourne factory highlight are evidence of this. He has also expressed doubts over Holden’s plans to build a new small car, the Cruze, in Australia from next year.
“Australia’s never going to be competitive in small cars. There really needs to be a proactive stance on what type of cars we can manufacture here cost effectively and how that fits in with customer’s needs and environmental needs. And we just haven’t seen that.”
“The one thing that the automotive industry brings is a critical mass to design and development. If we lose another car marker, we will lose that critical mass.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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