With an outstanding history of innovation, Australian designers have for many years produced highly creative manufacturing solutions, most often incorporating high levels of flexibility to efficiently cater for low to medium volume production levels with multiple model requirements.

Aero R&D

Australia’s aerospace industry employs more than 20,000 highly skilled people and offers world-class capabilities and innovative technologies at competitive prices. A recent KPMG study found Australia had the second lowest costs in aircraft parts manufacturing of 11 countries, and significantly lower than the US, UK, Japan and France.

The industry encompasses the provision of components, systems and services for commercial, defence and private light aircraft. Australia’s reputation for quality in high technology applications has drawn many of the world’s leading aerospace companies including: Boeing, BAE Systems, EADS, Smiths, GKN, Northrop Grumman, Thales and Saab; a number of specialist SMEs and most major airlines (such as Singapore, United, Emirates, JAL, BA, Virgin, Lufthansa, Air France, and several Chinese carriers).

A number of organisations including NASA, ESA and JAXA also conduct space-related activities.

Australia has competitive stengths in aerostructures design, analysis and testing, component manufacturing (machining and composite fabrication), assembly, avionics, software, systems integration, maintenance and support, pilot training, simulation, air traffic management systems, production of light aircraft and unmanned aerial vehicles and cutting edge research programs.

Innovation

Research agencies in the sector include: Cooperative Research Centres for Advanced Composite Structures, Satellite Systems, and Spatial Information; the Defence Science and Technology Organisation; the Sir Lawrence Wackett Centre for Aerospace Design Technology; the CSIRO and several universities.

Successes

Boeing subsidiary Hawker de Havilland supplies wing and tail components for the 737, 747, 777 and 787; wing and/or landing gear components for the Airbus A320, A330/340 and A380 and parts for Lockheed Martin, Bombardier and BAE Systems.

EADS subsidiary Australian Aerospace builds ARH Tiger and MRH-90 helicopters in Australia.

Gippsland Aeronautics and Jabiru Aircraft export light aircraft and engines around the world.

Thales exports The Australian Advanced Air Traffic System (TAAATS) globally from its regional headquarters in Melbourne. The system will control up to 80% of air traffic in China.

Qantas, Virgin Blue, China Southern and Singapore Airlines conduct pilot training in Australia. Air France and Lufthansa have set up service centres in Australia for the Asia-Pacific region.

Australia is a partner in the US$200b+ Joint Strike Fighter Program (the worlds largest aerospace program) and is well placed to capture significant work over the next 30+ years.

Auto R&D

Investors in Australia's automotive sector enjoy significant benefits including:

• An established industry with world class design and engineering capabilities.
• A sophisticated network of world class R&D institutions.
• Government support for the industry.
• Easy access to growing Asia Pacific markets.

Industry snapshot

The Australian automotive industry is experiencing a sustained period of strong growth. Sales of new motor vehicles reached the million mark for the first time in 2006-07, with 1,004,097 units sold.

Domestic production also remains strong in Australia. Local production of motor vehicles in 2005-06 was 326,960, with around 31% of locally produced motor vehicles being exported.

The largest export market for Australian produced vehicles is the Middle East. In 20Government07, GM Holden expects to export about 30,000 Commodore, Statesman and Caprice models (badged as Chevrolets) to the Middle East as well as to some smaller markets such as Brazil, South Africa and New Zealand. Toyota's new Camry and Aurion models will also go to the Middle East and New Zealand.

Component manufacturing generates significant activity in Australia, both for local supply and for export. Australia provides a regional base for some of the world’s leading component manufacturers, such as Robert Bosch and Siemens VDO. In early 2007 Siemens VDO opened a new purpose-built manufacturing plant worth more than A$25 million at Bundoora in Victoria. The new facility houses all of Siemens VDO’s existing business including the engineering and manufacture of sophisticated automotive products such as electronic instrumentation, climate control systems and body control modules for all four vehicle manufacturers in Australia, as well as BMW in Germany. It also houses the distribution for the Siemens VDO after-market products division which distributes in-car satellite navigation systems, audio instrumentation and sensors for the automotive and marine market segments.

Government support

The Australian Government's Automotive Competitiveness and Investment Scheme (ACIS) commenced in 2001 with the objective of encouraging investment and innovation in the automotive industry.

The scheme rewards increased competitiveness through the issue of import duty credits based on production, investment and research and development. Eligible participants include motor vehicle producers, component producers, automotive machine tool producers and automotive service providers. During the period 2001-2005, ACIS is expected to deliver $2.8 billion of assistance to the Australian automotive industry.

In December 2002, the Australian Government announced automotive assistance arrangements for post-2005. Similar to its predecessor, the post-2005 ACIS scheme provides the automotive industry with a decade of investment certainty from 2005-15 and is expected to deliver an estimated $4.2 billion of assistance.

The post-2005 arrangements will facilitate adjustment to a lower tariff environment, with automotive tariffs reducing from 15 per cent to 10 per cent from 1 January 2005, and from 10 per cent to 5 per cent from 1 January 2010.

Design for manufacture

Australia is known for its strengths in design, reliability, logistics infrastructure, skilled workforce, productive business culture, innovative systems, sophisticated IP protection and world class R&D capabilities.

The expertise of Australian firms in design for manufacture ensures that manufacturers and suppliers can develop world-class products with increasingly sophisticated technology. A number of global firms, including GM Holden, Schefenacher and Robert Bosch have established R&D facilities in Australia to serve their international networks.

Besides the R&D programs of individual firms, the Australian Government assists in fiunding cooperative research centres, which actively boost commercially focused research and development. The close interaction between academic researchers and business people fostered by the program turns Australia’s scientific breakthroughs into successful new products and services – many of which are entering international markets.