Tomcar: Australia's last remaining car maker
Ford, Toyota and Holden may be closing their doors in October but business is on the up for what is soon to be Australia's last remaining car maker.
Tomcar makes small but tough off-road vehicles.
"We have been growing exponentially the last couple of years," co-founder and chief executive David Brim says. "We are making one car every four days now." Turnover is just under A$10 million ($10.4m) a year and Tomcar is doubling production from the end of June.
MADE TO ORDER
When Brim started Tomcar he says there was no such thing as a premium off-road vehicle.
"Most of them are mass produced and they're all made overseas and not for Australian conditions which are very harsh," he says. Tomcars are made to order in what Brim describes as "a very different system to traditional manufacturing".
Brim says before Tomcar large cattle stations were "destroying" utes on a monthly basis.
"We saw so much opportunity when it came to machinery that wasn't made here and wasn't made for Australia," he says. "Big agricultural properties and the mining industry are showing a lot of interest in our models and we are pushing very hard into the defence space taking part in the new mobility trials this year. People are beginning to resonate with what we are doing."
Tomcars are priced from A$32,000 ($33,400) and Brim says "we don't compete on price, we compete on performance, longevity and maintenance".
Brim started Tomcar with his brother Michael in 2005 and the pair spent seven years developing the product before the first Tomcar rolled off the production line in 2012.
"As a start-up we didn't have the resources of large car companies but we had access to cloud computing so it allowed us to disrupt the industry," he says. "We came from outside the industry which I think is really important, most industries that are disrupted are by people outside the industry."
Tomcar bypasses car dealers and sells direct through its small sales team and website.
"We were selling cars on the internet, people thought we were crazy," he says. "We don't have those margins there, we put all that back into the product which is a very expensive handmade piece of machinery."
Brim estimates the pair have funded the business to the tune of A$15 million with "very small" amounts of shares sold over the years to family and friends.
"We are getting there, it's an expensive business," he says. "You need to not know anything about the car industry because you wouldn't do it otherwise. But if it's done correctly, it's very profitable. Just look at Tesla, Elon [Musk] and his team are much better funded than we are but they have a very similar model."
Following Tesla's lead, Tomcar is working on a feasibility study it's hoped will turn the Tomcar electric.
Tomcar employs a dozen people and unlike traditional manufacturers it outsources production to Melbourne manufacturer MTM, a former supplier to Holden.
"They have had an incredible effect on the quality of the vehicles we produce," Brim says. "It's taken years for me to get through to government that manufacturing is much more than production, it's research and development to distribution. We were always penalised for outsourcing manufacturing, we weren't seen as a manufacturer in the government's eyes."
Jens Goennemann, managing director of the Advanced Manufacturing Growth Centre, says Australia needs to move on from focusing on the production part of manufacturing.
"Production is only one out of seven steps in manufacturing," he says. "Manufacturing is research and development, design, logistics, production, distribution, sales and after sales service. Apple does every one of the seven steps except for the production. You can be an advanced manufacturer and get someone else to assemble."
Goennemann says the end of production by the large car makers does not spell the end of Australian manufacturing.
"We have a collective whinge about so-called car manufacturers closing down their production lines," he says. "Like everyone I am very sad to see that but then a car manufacturer such as Ford, has significantly increased their workforce in high skill research and design. Ford now employs more than 1000 highly skilled engineers in Australia."
Tomcar's target market is niche, but Brim says "global niches can be very large these days".
"I want more people to start making products in Australia," he says. "The future of Australian manufacturing is niche, high-value products. We can't compete with China and Thailand on mass market products. We need to be like Switzerland and manufacture things nobody else can make."
Brim's advice for fellow entrepreneurs is to "go for it".
"I encourage anybody who has the dream to start a business to do it," he says. "It's not easy but it's incredibly rewarding to see your product come off the production line."
- Sydney Morning Herald