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Bruce Newton31 Aug 2015
NEWS

Ethan's Australian car-making model 'brilliant'

But marketing is the real priority for start-up Aussie automotive manufacturer warns analyst

A social analyst who advises car brands on the changing attitudes and moods of Australian consumers has praised aspiring automotive start-up Ethan Automotive’s flexible manufacturing model as “brilliant”.

But David Chalke has also warned Ethan’s highest priority is to focus on who it is selling to and what it is selling to them.

"The notion of having an assembly plant based on other people’s parts bins is a great idea. Brilliant,” Chalke told motoring.com.au.

“But what I don’t see in the Ethan material is a vision of the car they actually want to build.”

Chalke is a veteran researcher who currently advises Mazda Australia. He has also consulted to other major car-makers and importers.

Ethan is currently lobbying public and private sources for funding so it can design, engineer and manufacture a three-vehicle range from late 2018, a year after Holden and Toyota shut up shop.

The vehicles would be a medium SUV, a passenger car and a coupe, all sharing the same chassis architecture, drivetrains and interior modules sourced from suppliers, but using bespoke exteriors.

Ethan says it can build 30,000 cars per annum by 2022 and be profitable doing it, although the start-up cost is a hefty $1.5 billion.

“But who is going to buy these cars, how are those cars going to be better than a Camry, a Mazda6 or a CX-5?” Chalke queried.

“Ethan needs to have a clear understanding of who they are selling to and what they want, then go a step beyond that and give them something more and then developing the vehicle to meet that projected need,” he added.

Chalke specialises in measuring the effects of cultural change on Australians’ attitudes and behaviours, and advises business on their impact on the formulation of strategy. He is also a regular on the public speaking circuit.

He said Ethan's flexible manufacturing model was spot-on for the 21st century, but was only part of the package required for success.

“To me the start point is manufacturing is now the slave to marketing. The old days where marketing has got to sell what the factory produces are gone.

“This new world says ‘who am I going to build a vehicle for? What do they want? And then I will make that vehicle for them’.”

Chalke’s positive assessment of the Ethan manufacturing model is a boost for the operation, which has struggled to convince state and federal governments of the viability of its plan in the wake of Ford, Holden and Toyota’s decision to cease local manufacturing.

But Chalke argued the withdrawal of the majors was a lesson in what not to do and not that Ethan’s plan was wrong.

“When you have the Ethan model you are liberated,” he said. “You are not tied to any design philosophy. You can make anything you want.

“So to me the great advantage of Ethan is not that they can bolt together 30,000 units per year, it’s the fact they are potentially liberated. They have no history, they have no ties, they are perfectly able to go and look at the market and say ’what this market really needs is a …’ insert here whatever fantastic vehicle you want to imagine.

“And that’s how you are going to make the Ethan dream work, by working out what the market needs, who you are going to sell to and then work out whether you can put it together.

“They are free. They are not tied to a massive manufacturing plant that is supposed to build 100,000 cars per year.”

For more on Ethan and its plans check out these earlier stories:
>> Labor backs auto funding to 2021
>> Ethan: Feds still waiting for 'formal proposal'
>> SA rejects Ethan's bid for bucks
>> Ethan SUV the priority
>> Property and pollies behind Aussie auto-start-up
>> Ethan seeks taxpayer dollars
>> Global badge for Aussie industry relaunch

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