Comparing histories of German and Australian car manufacturing

SWINBURNE UNIVERSITY OF TECHNOLOGY
Business In The European
Union Study Tour 2015
Final Report
Nuwan Ranasinghe 4927788
Submitted 26th
January 2016
The contents of this report are in response to the Final Report topic “Keys to Success: a comparative
study of the histories of the German and Australian car manufacturing industries.” The report aims
to not only analyse and compare the origins of both automobile industries but will also explore as to
how both countries’ car manufacturing histories have assisted in various other factors to impact
their respective nations industrially and economically. This report attempts to gain a deeper
understanding as to how their unique histories have assisted in the creation of successful car designs
in Germany and Australia, as well as discussing how both nations can maintain their manufacturing
successfully into the future. The conclusion of this report does suggest that Germany’s car
manufacturing is to be more powerful than Australia’s due to their rich history of high class
automobile production, but this is only after thorough comparative analysis. All information
references have been included.

European Union Study Tour 2015 Final Report Nuwan Ranasinghe 4927788
1
Table of Contents
Introduction…………………………………………………………………………….2
A Brief History of German and Australian Car Manufacturing…....3
Origins of Automotive Design in Germany and Australia…………….6
Conclusion…………………………………………………………………………………8
References…………………………………………………………………………………9

2
Introduction
Car manufacturing has no doubt been a major contributor in creating the iconic reputation
that Germany has as being one of the world’s best in producing high-quality luxury and
performance vehicles. From the humble beginnings of their major brands to where they
stand now, Germany is without question a powerhouse when it comes to developing the
best in automotive technology. As stated on GlobalCarBrands (2014) ‘[with] an annual
output of 6 million, German cars are some of the most innovative vehicles in the world’ thus
truly exemplifying the raw power and high class quality of cars manufactured produced in
this part of world. Germans have become famous for producing top quality individualised
cars, as suggested by Pfieffer and Wieland (pg. 128, 2012) ‘quality improvements of cars,
particularly the trend towards individual cars on demand, have led to an increased variety of
parts.’ This versatility in German car manufacturing makes it a real game changer in the
competition with other brands around the world, and it certainly supports the claim that
they are truly ‘famous worldwide for building quality and luxury automobiles’ (Daily News
Dig, 2014).
Australian car manufacturing in stark contrast has not received the same prestigious
reputation that the German car manufacturers have revelled in for over a hundred years
however they have still achieved relative fame and popularity with some of their more
home-grown models. One prime example of this is the classic VB Commodore ‘a four door
sedan [was] introduced in 1978, with a station wagon version briefly available in 1979’
(GlobalCarBrands 2014). As backed up by this article, the VB Commodore was certainly a
successful Australian car, ‘with sales of nearly 96,000, it became Australia’s top selling car in
1979’ (GlobalCarBrands 2014). Australia continued to produce more diversified models of
existing brands and they even created some of their own brands, such as ‘Mini, Leyland,
Chrysler, Nissan, Valiant, [and] Renault that achieved a number of 450,000 cars overall’
(GlobalCarBrands 2014). Despite this though, Australian car manufacturing, unlike
Germany’s, is unfortunately on the decline, with many jobs and resources being shipped
overseas or delivered off shore. According to the Australian Government Department of
Industry, Innovation and Science, ‘the three passenger motor vehicle producers Ford,
Holden and Toyota have each announced they will cease manufacturing in Australia over
the coming years’ (Industy Sectors – Closure of the motor vehicle producers , 2014) with
‘Ford cease[ing] manufacturing in October 2016 while Holden and Toyota will cease at the
end of 2017’ (Industy Sectors – Closure of the motor vehicle producers, 2014). As can be
witnessed, Australia’s three main companies face serious job cuts and a severe
manufacturing decline, putting that sector at a serious production deficiency.
Nonetheless, the purpose of this report is to go into further detail behind the histories of car
manufacturing within Australia and Germany. A comparative analysis will be then done

3
outlining the unique automotive designs of each country, followed by an exploration of the
economic and manufacturing successes in each nation. Towards the end this report we will
investigate the impact and effects that German and Australian car companies have had on
their respective economies followed by an outline of what each country has in store to
sustain their continued success for the future. A conclusion has been supplied summarising
the content discussed in this report which is an overall comparative analysis of German and
Australian car manufacturing histories.
A Brief History of German and Australian
Car Manufacturing
As discussed earlier, Germany has enjoyed a fine tradition of automotive engineering
excellence, which dates back to 1885, when Karl Benz developed the world’s first
combustion engine motorcar, the Motorwagon (Automostory 2014). Digressing deep into
Germany’s automotive manufacturing history will provide us with an excessively lengthy
dialogue on this section alone, as each of the major car companies from this region of the
world possess their own illustrious histories on how they came to be. This report instead will
focus on the key events that shaped the majority of these car companies’ key successes to
become the premier competitors in the automotive industry today.
Following Benz’s production of the Motorwagon, he developed and patented the first four-
stroke internal combustion engine in 1886, followed by a more advanced model which ran
on gasoline and entered commercial production in 1887 (Automostory 2014). Benz’s early
inventions soon inspired more of the now prestigious car companies to emerge in Germany,
with Opel producing their first car in 1906, and soon became the first company to set up a
mass production assembly line (Automostory 2014). In 1935, Opel was the first German car
manufacturer to produce 100,000 cars in a year (Automostory 2014).
BMW entered the German automobile movement in the 1920s with their first motorised
bicycle, the Flink (BMW Drives, 2012). Powered by a Kurier two stroke engine, it proved to
be a catalyst in encouraging the Bayerische Motoren Werke AG (BMW Drives, 2012) to enter
the growing German car market. The first BMW car was the Dixi 3/15, constructed in 1928
and featured a strong 743cc four-cylinder engine capable of producing 15 horsepower. From
here it gave rise to the reputation BMW have today as being ‘among the costliest car brands
in the world’ (Automostory 2014) as they own assets with Rolls Royce and sub-brands of
Mini in today’s market (Automostory 2014).
Perhaps one of the most significant car brands which played a substantial role in the
propulsion of Germany’s car manufacturing industry after World War II was Porsche.
Specialising in sports cars, racing and high performance automobiles, Ferdinand Porsche’s
dream was to create a high performance car that would be affordable for the average

4
individual. As suggested by this excerpt ‘The Porsche name has become synonymous with
sports cars and racecars because that is what company founders Ferdinand Porsche and his
son set out to build when they first set up shop with 200 workers in 1948’ (Porsche AG
Historical Background 1948-2007, 2012) thus showing just how important they were in
thrusting German car manufacturing into the racing and high-performance sports car scene.
This is supported by further evidence, as according to press.porsche.com, the company is
seen to be ‘synonymous with racing, and Porsche cars began competing almost
immediately’ (Porsche AG Historical Background 1948-2007, 2012). Currently, Porsche cars
have won almost 24,000 auto races and boast a tally of up to 50 class wins in the Le Mans
circuit (Porsche AG Historical Background 1948-2007, 2012).
As can be concluded from this truncated summary, Germany’s history of car manufacturing
is a long and proud venture featuring extensive feats of engineering ingenuity to assist with
producing only the best in automobile manufacturing. As suggested by this excerpt from
BBC Business ‘cars had become the ultimate metaphor for Germany’s extraordinary
industrial revival – and for the collapse of Britain’s manufacturing industry’ (How German
Cars Beat British Motors – and kept going, 2013). BBC Business identifies the Volkswagon
Golf as a major threat to the British automobile industry, hailing it as ‘one of the bestselling
cars of all time’ (How German Cars Beat British Motors – and kept going, 2013). Today,
Germany is the fourth largest producer of luxury cars in the world, and is considered an icon
of Europe’s industrial revolution. As BBC Business fittingly implies, ‘German manufacturing
is one of the great success stories of the post war age’ and that ‘If you want to know why
Angela Merkel calls the shots in Europe, Germany’s car factories are a pretty good place to
start’ (How German Cars Beat British Motors – and kept going, 2013).
Australia’s history of car manufacturing has not been as illustrious or as success ridden as
Germany’s however the country was still able to maintain a relatively sustainable industry of
automobile production from the cusp of World War I up until the early to mid-2000s. Most
Australian cars that have been manufactured have been derived from foreign companies
that decided to invest in production factories in Australia. Sadly, Australia’s current car
manufacturing industry is on a severe decline, with an article on SBS News declaring that
‘The Australian vehicle-building industry would, clearly, never stand on its own four wheels’
(Australian car making doomed from start, 2014) and that ‘Failures have been more
common than successes in the local car industry’ (Australian car making doomed from start,
2014).
Despite such negative sentiment towards their car manufacturing industry of late Australia
can still lay claim to producing some of the most successful automobiles that are still being
made today, primarily from one of their oldest car companies Holden, which began in 1856
in South Australia. With the VB Commodore being one of the most successful cars produced
in the region, it is no doubt that the creation of the Holden car brand ‘occupies a special
place in the hearts of many Australians’ (The Holden car in Australia, 2007). The
development of the Holden car brand was pivotal in jump starting Australia’s entrance into
the industrial revolution and they would go on to produce a whole line of vehicles that
became iconic of embodying all that was important to the Australian way of life.

5
Although the Holden car company began in South Australia by 1924 they had become the
exclusive supplier of American car manufacturer General Motors, and supplied tramcars for
Melbourne city throughout the 1920s (Timeline: Holden’s History in Australia, 2014). By
1948, Holden unveiled their first ever all-Australian motor vehicle, the 48-215, affectionately
known as the ‘FX.’ A compact and economical family sedan, its robust shape was suited for
the Australian environment (Timeline: Holden’s History in Australia 2014) and proved to be
a significant achievement in helping Australia make a mark in the car manufacturing world.
According to ABC News ‘the car was an immediate success and Holden could not satisfy
demand quickly enough’ (Timeline: Holden’s History in Australia 2014) thus showing just
how important the development of this vehicle was to the Australian people. It signalled
Australia’s arrival into the mass production of motor vehicles.
Today, Holden bases its headquarters in Port Melbourne, Victoria and is responsible for the
designing and concept development of new vehicles. Holden is now a subsidiary of
American motor company General Motors and owns assets with Chrysler, GMC, Cadillac and
even Chevrolet (About Holden, 2015) enforcing it as a major brand in American and
Australian car manufacturing. Holden really hit the limelight in 2013 with the production of
the VF Commodore, hailed as ‘the most advanced car ever built in Australia’ (About Holden,
2015). Fitted with lightweight technology such as an aluminium frame and state of the art
cutting edge driver safety and infotainment systems, the VF Commodore was Australia’s
response to creating a top-class high performance vehicle capable of competing with its
European counterparts (About Holden, 2015).
The story of Holden’s rise as Australia’s first home-grown motor vehicle definitely brings
immense pride to the history of car manufacturing of this young nation, but the same
cannot be said for all other car companies that developed alongside it. Ford and Toyota
were Holden’s only major competitors but by 2017 they will cease manufacturing in
Australia as production is shipped offshore. According to SBS News ‘as traumatic as the
closures of Ford, Holden and Toyota will be, it is something that has happened many times
before’ (Australian car making doomed from start, 2014) perhaps outlining why Australia
has not managed to sustain its car manufacturing as strongly as Germany’s has over the past
100 years.

6
Origins of Automotive Design in Germany
and Australia
Analysing the automotive and the industrial engineering design of cars is perhaps the best
and most in-depth method in gaining a solid understanding of how various models, makes
and brands came to be. It gives us a chronological, systematic and logical approach into
examining how various engines, technologies and driver assist systems came to appear in
some of the cars we drive today, and are often reflective of the societies they were made
for. Some motorcar engine designs were inspired from manufacturing that were initially
made for other modes of transport, like BMW for example, who initially only made engines
and turbines for light aircraft and even Holden, who designed motors for tramcars in
suburban Melbourne before entering mass production of the FX. This section of the report
will take an in-depth yet brief analysis of the histories behind German and Australian
automotive design.
For Germans, the design of a car is everything. It creates an image, a status and produces a
symbol of prestige and class for that company. As German designer and publicist Bernd
Polster explains in his interview ‘the aesthetic design of a car has always been extremely
important’ (Goethe Institut, 2015) and that ‘the car is a status symbol and an integral part of
our way of life, or even our self. And to Germans, leading car brands have now become a
symbol of national identity’ (Goethe Institut, 2015). Such powerful and passionate words
clearly suggest that German automotive design is something is embraced with much pride
and zealous energy, and certainly indicates as to why Germany has been a leader in the car
manufacturing industry.
The first German cars did not actually concern themselves with design but more on
engineering functionality. As explained on Car Design News ‘Before 1910, design did not
play a major role in the vehicle development process. Engineering determined the
appearance of the first motor cars’ (Ihrig, R. 2004) showing that design and aesthetics were
something that was considered later on, once the car was manufactured to operate
smoothly. Karl Benz’s one-cylinder two stroke unit unveiled in 1879 (Daimer Company
History, 2016) is a classic example of this trend, and after achieving much success from his
humble design, Mercedes-Benz soon came into fruition with more advanced models being
produced soon after.
World War II saw Volkswagon enter the car manufacturing market when the highly sought
after design engineer Ferdinand Porsche was instructed by Adolf Hitler to develop and mass
produce the iconic VW Beetle, hailed as the ‘people’s car’ (Hawranek, 2009). With a smooth,
domed streamlined chassis coupled with a compact 1100cc H4 rear engine, the Beetle was

7
the first German car to be ‘produced for the masses’ (Hawranek, 2009) and became a
symbol of the political power of the Nazi Party.
Today Germany has still retained its incredible reputation as being a leader in high class
automotive design. With issues like global warming and reducing carbon emissions taking
centre stage in the 21st
century, designing cars that have a minimal impact on the
environment is paramount in upholding a positive image of the German car manufacturing
industry. According to Worldwatch Institute ‘Germany, the birthplace of Volkswagon,
Porsche and BMW, plans to become a global leader for developing low carbon vehicles’
(Worldwatch Institute, 2013) which is a positive sign if they are intent on producing
environmentally friendly cars for the future. Volkswagon’s all-electric concept car which is
to be premiered at the International Consumer Electronics Show in Las Vegas (Korosec,
2015) is a stepping stone in this direction.
Australia’s origins in automotive design in direct comparison to Germany’s has not achieved
that same passion and iconic status despite the country regularly producing outstanding
concept models and future car designs into numerous motor shows around the world.
According to Soumitri Varadarajan, a deputy dean of Industrial and Interior Design at RMIT
University, ‘Car manufacturing is a very very complex and really difficult industry to sustain
and maintain, and what unfortunately has happened in Australia over the past so many
decades we’ve embraced an open borders policy to vehicle imports’ (Stone, T. 2014). Such a
claim would suggest that Australia’s automotive design industry is becoming non-existent,
but according to an internet opinion article by Monash University ‘this Australian approach
to automotive design is characterised by a skill set that is more versatile than many
counterparts in other parts of the world’ (Coxon, S. 2015), showing that it is indeed in a
healthier state than previously thought. The article continues to speak positively of
Australian automotive design, claiming that ‘the contribution of Australians to the global
pool of car designers is satisfyingly high compared to other more populous nations in the
world, indicating that Australian design is as vibrant and innovative as ever’ (Coxon, S.
2015).
Despite such conflicting views regarding Australia’s place in the manufacturing and
automotive design of vehicles, the country still has a relatively outstanding history in
designing and producing high quality cars. Automotive design in Australia flourished
immensely after the conclusion of World War II, with the production of the FX, Holden’s first
Australian-made car that was made under The Project 2000 car design plan (History of Cars
2016).
Following the onset of European migration, car companies like Volkswagon, Renault,
Peugeot and Citroen began setting up dealerships and assembly plants in Australia, forcing
Holden to design a fresh new car for the public. In 1953, the Holden Business Sedan was

8
released, with the FJ Holden close behind (History of Cars 2016). These two models helped
keep the Australian car manufacturing industry relatively sustainable for a period of time, as
it allowed ‘GM-H (General Motors-Holden) make its biggest profit since the start of the
company’ (History of Cars 2016).
The arrival of Toyota and Ford in Australian car manufacturing meant that Holden had a very
strong competitor in creating a fuel efficient car for the modern era, post 2000s. According
to History of Cars, ‘Toyota began building a hybrid version of the Camry’ (The Toyota Era,
2016) which received a $35 milllion backing from the Australian government. Holden would
soon face even stronger competition as ‘Toyota was not the only car manufacturers in
Australia dedicating time and money to fuel efficiency and environmentally friendly engines.
Ford invested $230 million in 2009 to focus on this’ (The Toyota Era, 2016). Despite such
aggressive intent from all major Australian car companies in investing in sustainable
automotive design, according to numerous sources the future is still unclear for Australian
car manufacturing as a whole. As stated on History of Cars ‘Technologies are advancing and
with the rising fuel price in Australia, the future looks uncertain for car manufacturers and
because of this, more hybrids and new power sources will be the future of the car industry’
(The Toyota Era, 2016). It shows that Australia certainly faces an uphill struggle if they wish
to compete with the likes of Germany and indeed the rest of Europe to maintain their
dwindling car manufacturing industry
Conclusion
A comparison of the histories German and Australian car manufacturing shows that both
countries have unique and fascinating origins into how their automobile production came
into fruition, funded by differing motives. Germany has been the motherland and founder
nation of most of the world’s modern motorcar production, with Karl Benz’s inventing the
world’s combustion engine patented vehicle. Such a proud and illustrious history of
automobile engineering excellence makes Germany’s future in this field strong and vibrant,
with so many of today’s now iconic car brands originating or owning assets from there.
Australia’s history of car manufacturing has largely been one that has relied on the imports
of others. Despite this, the Australian people had been yearning for years to have a car that
was symbolic of their culture and history. The arrival of Holden and its development of the
FX in 1948 followed by the VB Commodore in the 1970s proved to be the answer to a young
nation looking for a car that was representative of their national identity. As the statistics
show, these two models were by far one of the most successful cars ever to be produced in
Australia. Now, with severe declines in production and continued job cuts, Australia’s car
manufacturing industry faces an uncertain future, as more of their bigger brands continue
to close down factories around the country.
(Word Count: 3289)

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