Automotive suppliers can avoid their own Crash; if they act now!

The Australian Automotive supply sector has had plenty of time to rearrange their individual businesses to be become less reliant on the three major car companies, but many are now running out of time and still looking for state and federal government assistance.

The three major car companies announced their pending closure in late 2013; with Ford’s closure due for late this year and both Holden and Toyota next year, time is virtually up.

It was reported in Oct 2015 in the SMH, that;

Professor Goran Roos – who has advised state and federal governments and was on former prime minister Julia Gillard’s Manufacturing Leaders Group – was quoted.

“On average, he says, it takes a company about seven years to build alternative income streams and a new customer base. Professor Roos acknowledges this is difficult – particularly when a business hasn’t already started on a diversification plan.”

He also, estimates about 75 per cent of industry will shut down when Ford, Holden and Toyota quit local manufacturing.


So rather than hoping state and federal governments will come to the party to help out the suppliers and save the jobs in the sector. It is my opinion that these businesses should be proactive and diversify themselves quickly using the high level of skills they have developed.  But with time now running out they cannot do it via the development of new products and markets alone.

These businesses need to be proactive by taking control of their own future and not rely or hope on government assistance which is not coming.  They need to undertake a series of strategic acquisitions to diversify their products and markets.

By taking their existing core strengths and leveraging off them and buying the right company (or companies) to move into a new product and or market sector. Trying to diversify organically by developing new products and markets just takes too long and often fails.

Right now there are numerous quality businesses out there owned by Baby boomers who are keen to sell and move into retirement, many of these companies have strong products and markets, but may lack the skills and equipment that a quality automotive supplier would bring to the table.

In summary Automotive manufacturers have a great opportunity if they want to take it, they just need to get into the right gear quickly and diversify or crash.  If they don’t start the acquisition process now then about 75 per cent of the Industry will just shut down as Professor Goran Roos estimated.



Warren Otter, is the author of “Crank It UP; the proven way to grow your business to greater wealth”; and is a Specialist Acquisitions advisor, who assists businesses take control of declining growth and leverage their core strengths into stronger and more profitable outcomes. He previously grew his own metal manufacturing business fivefold by using the same strategy of growth via acquisitions.