Edition 39 – Lessons From the Australian Car Industry
Last Friday, the last Ford Falcon and Ford Territory rolled off the production line in Melbourne. After 91 years of manufacturing cars in Australia, Ford was the first of the remaining manufacturers to close. By the end of 2017, an industry that has employed hundreds of thousands of Australians and generated billions of dollars will be gone.
Most people know my passion for cars, particularly Australian cars. Of the 20 cars that our family or business have owned over the years, 16 of them have been Australian designed, engineered and manufactured. Some were great. Some not that good. In my opinion, most were superior to anything else in the world for the market they occupied.
Simply, the Australian car industry failed itself. It had plenty of time to adapt to change. It had the opportunity to build export markets. It could have been bolder in how it took on the world. Yet it didn’t.
As family business owners, here are some lessons from the demise of the Australian car industry:
- Remaining relevant.
The Australian car industry was long dependent on the production of the family sedan – Holden Commodores & Ford Falcons. However, the market was changing. People wanted more choice. SUVs became popular. People downsized. Australia embraced diesel. Despite this, each manufacturer kept pumping out the same product.
What are you doing in your family business today, that you’ve always done, but which your market is saying they want different? Have you gone out to the market to see what else is happening? How have your consumer’s tastes changed?
- Price is not everything.
The rise of luxury car sales in Australia has been phenomenal. When I was a young boy, only doctors and lawyers drove Mercedes Benz. BMWs were rare.
Today, the world has changed. Australia has a very high standard of living. People believe the Holden Calais V is not as nice a car to drive as a Mercedes Benz C Class. And, they’re prepared to pay a higher price for it.
What are you doing in your family business to provide people with higher priced options? What are you doing to improve their experience? Have you asked your market why they choose you over your competitors?
- Market positioning.
A colleague of mine who once worked for Holden made the observation that Holden’s demise commenced when they positioned themselves as the “bogan’s” car. Whilst that may be inflammatory, it raises the issue of the aspirational qualities and perception of the brand.
What are you doing in your family business to position yourself differently to your competitors? If you’re in the landscaping business, are you mowing lawns or are you developing green space in new housing estates? If you’re an electrician, are you fixing power points or championing the latest in building management systems?
- Look beyond your current market.
When Ford Australia conceived the idea of the Territory, they put together a meagre budget, developed a concept, took it to Detroit and blew Ford USA out of the water with the package.
The problem was, Ford Australia should have designed the Territory as a global car. A great idea with hopes of 20 000 sales per annum in Australia could have been, with some engineering changes, 200 000 global sales per annum.
Does your family business have relevance in another market? What small thing would you need to do to harvest greater potential?
This Week’s Tip
Don’t limit your thinking through the prism of what you’re doing today. Ponder where your business could be tomorrow and what you need to do to get there.