While many of Australia’s most iconic car brands are unknown elsewhere, vehicle manufacturing is becoming an increasingly globalised concern. But just how far can that process go?Picture by Scott Olson/Getty Images
I’m spending the early part of this week in Detroit, attending the North American International Auto Show (NAIAS) and visiting Ford’s design HQ. Long-term Lifehacker readers will know that I’m that relatively rare beast, an Australian who doesn’t drive, but that doesn’t mean I’m not curious about how our most popular mode of transport is evolving. And what particularly struck me at today’s various launch events was the tricky balancing act which car manufacturers have to manage in an increasingly globalised market.
I’m used to attending events in the USA which feature the word ‘International’ in their title but where the vast majority of time is dedicated to products intended solely for the American market. CES (which is happening right now over in Las Vegas) is particularly guilty of this. This phenomenon is also evident at NAIAS; there are plenty of car makes on display which simply don’t get sold in Australia, lots of unfamiliar model names even from the ones that do, and every opportunity grabbed to talk up any American production plans.
However, the phenomenon is not as pronounced as you might expect. Like many other industries, car manufacture is increasingly a global concern, and that’s certainly reflected in what we buy. If you ask people to name an iconic Australian car, chances are they’ll go for the Falcon or the Commodore. But not only are both those vehicles produced by US-owned companies, those models also don’t dominate sales the way they used to. The top-selling car in Australia in 2011 was the Mazda3, displacing the Commodore from a long stint at the top, while Toyota was the top-selling manufacturer overall.
Australians purchased just over a million new cars last year, which is a pretty big number in a country of under 23 million people. But that still makes us a relative minnow in terms of the world market, which is projected to be around 70 million vehicles this year (rising to 110 million by 2020). So it’s unsurprising that increasingly we’re seeing models designed for worldwide consumption, rather than highly tailored to each market.
Just over a fifth of the cars sold in Australia last year were manufactured locally, so we’re already dominated by imported cars. While the majority of those will have been localised to a small degree (if only to deal with our relatively uncommon driving-on-the-left-hand-side needs), there’s increasingly less incentive to produce cars designed entirely for that one small market.
The complexity of modern vehicles and the increasing push to move away from a sole reliance on petrol as a fuel source means that car R&D is expensive, so components have to be constantly reused. “Our industry is all about volume and economies of scale,” Ford’s global head of product Derrick Kuzak told Lifehacker. “There’s no room for one-off design. Our strategy is about global integration.”
So how does the line get drawn? Which market segments get a global release rather than a purely-for-the-locals model? I asked Kuzak, and he told me that it largely comes down to size. Compact cars — the most popular and fastest-growing segment — tend to be designed for global release. “Vehicles at that size are a global market,” Kuzak said, noting that consumer research has to take place in multiple countries to ensure the product suits different locations.
Larger passenger vehicles often have a more regional focus, which is how the Falcon and Commodore continue to appear — at least for the moment. As demand for fuel- efficient and hybrid vehicles grows, that could conceivably change.
While some car enthusiasts might lament the disappearance of local ‘icons’, Kuzak argues that most consumers would be disappointed if we returned to a scenario of largely local models: “With the Internet, customers get to see the best of every region and they want the best of every region.”
Disclosure: Angus Kidman travelled to Detroit as a guest of Ford.
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