Where lux­ury meets main­stream

De­spite the down­turn in car man­u­fac­tur­ing in Aus­tralia, the car mar­ket is thriv­ing in other ar­eas. Bob Forshaw speaks with Ateco man­ag­ing di­rec­tor Ric Hull about dis­tri­bu­tion, di­ver­sity and the im­por­tance of China.

Business First - - CONTENTS -

– De­spite the down­turn in car man­u­fac­tur­ing in Aus­tralia, the car mar­ket is thriv­ing in other ar­eas. Bob Forshaw speaks with Ateco man­ag­ing di­rec­tor Ric Hull about dis­tri­bu­tion, di­ver­sity and the im­por­tance of China.

Ric Hull has been in the car in­dus­try for much of his life. While he does not con­sider him­self a car lover in the ‘rev head’ sense of the ex­pres­sion, he is very much en­gaged with the busi­ness of cars.

“It is one of those in­dus­tries where we have a large vol­ume of turnover of rel­a­tively high value com­modi­ties, so when it is good it is very good,” Ric says.

The man who grad­u­ated with a com­merce de­gree from the Univer­sity of Mel­bourne, be­gan his ca­reer with a trade as­so­ci­a­tion but soon found him­self at Ford where he spent 16 years work­ing in what he calls a very dis­ci­plined, or­gan­ised com­pany.

“Ford was highly re­garded back then. It was a great learn­ing ground, par­tic­u­larly in fi­nance and in deal­ing with pro­grams such as the Asian Car Scheme.”

It was this scheme that in­tro­duced Ric to Asian busi­ness prac­tice and while with Ford he spent four years in Ja­pan and three years in Tai­wan. He took a sab­bat­i­cal from cars af­ter that work­ing for an op­ti­cal com­pany, but soon found him­self at Bond Group im­port­ing the Hyundai brand.

“The Bond Group was more hand­soff. But that was the era where Bond had to sell off ev­ery­thing.” Ric says.

Those would have been in­ter­est­ing days in­deed. Dai­woo pro­vided a more set­tled en­vi­ron­ment. He be­gan Dai­woo im­por­ta­tion into Aus­tralia and later SsangYong, all the while build­ing con­tacts in all the right places.

When he landed at Ateco in 2000, Ric took a hands-on role with Kia, a re­la­tion­ship that lasted for six years.

“I stayed with Dai­woo for five years,” says Ric. “Then Neville Crich­ton ap­proached me. He wanted to pitch Kia and be­cause we knew each other, he knew I had a great deal of Korean car ex­pe­ri­ence. He ap­proached me to see if we could en­tice the Kia dis­tri­bu­tion rights. We did and kept the rights for the next six years.”

Crich­ton is the owner of Ateco. Though the com­pany has a low pro­file, they have max­i­mum ex­po­sure and im­port and sell: • Ch­ery • Great Wall • Lo­tus • Maserati • Ssangyong • Foton light trucks and util­i­ties

This is an ex­cep­tional mix of pres­tige, lux­ury and gen­eral-pur­pose ve­hi­cles. And un­der the guid­ance of both the owner and the MD, the brand value has con­tin­ued to in­crease be­cause the di­ver­si­fi­ca­tion puts Ateco in a strong po­si­tion across the mar­ket.

In terms of growth, Ric says, “We have al­ways had our ears and eyes open for op­por­tu­ni­ties. We were suc­cess­ful in se­cur­ing Kia. We knew in 2005 it was re­turn­ing to the fac­tory. Kia had been very ef­fec­tive as a vol­ume seller be­neath our pres­tige and lux­ury brands, so I started to look at other high vol­ume brands. We trav­elled to In­dia and China, but it was China that I felt would be the right source.”

In fact Kia was so suc­cess­ful that when Ateco took it over it was sell­ing 5,000 units a year, when they let it go the num­ber was 25,000 and that hap­pened in a five-year time­frame. They are ex­pe­ri­enc­ing sim­i­lar growth with Chi­nese brand Great Wall, which launched in 2009 and al­ready has 40,000 units on road.

When you look at the sta­tis­tics it is easy to un­der­stand why China is such a sig­nif­i­cant growth mar­ket.

“They did 23 mil­lion ve­hi­cles last year; that is more than the US and Ja­pan com­bined,” Ric says. “I think they will be a ma­jor source of mo­tor ve­hi­cles in Aus­tralia.”

Ac­cord­ing to To­tal Ex­ec­u­tive the rea­son China is so strong is be­cause 1. They man­u­fac­ture spare parts for the ma­jor­ity of brands glob­ally. 2. They have ac­cess to tech­nol­ogy from many of the top brands glob­ally – a lot of which man­u­fac­ture in China. 3. They have ac­cess to much of the

We have al­ways had our ears and eyes open for op­por­tu­ni­ties. We were suc­cess­ful in se­cur­ing Kia. We knew in 2005 it was re­turn­ing to the fac­tory.”

tech­nol­ogy avail­able from global com­po­nent mak­ers who pro­duce in China. 4. They still pro­duce at com­pet­i­tive prices. 5. Growth and vol­ume is en­sur­ing their in­vest­ment in in­fra­struc­ture for the fu­ture.

It means Chi­nese brands have be­come a big part of the Ateco busi­ness and will con­tinue to be in fu­ture.

And as for deal­ing di­rectly with the Asian mar­ket, Ric uses the same ap­proach he would any­body.

“I have dealt with the Asian mar­ket all my work­ing life. I don’t make any par­tic­u­lar changes to the way I do busi­ness with any­one. Hon­esty, a forth­right and pro­fes­sional ap­proach will en­able you to do busi­ness very read­ily.”

Ateco’s busi­ness model is also very at­trac­tive to sup­pli­ers. Ric sees it as a sim­ple model amidst a sea of com­pli­ca­tions.

“We like to keep the busi­ness as sim­ple as pos­si­ble. In this in­dus­try there is a temp­ta­tion to com­pli­cate and build model vari­a­tions, but we don’t think this is a re­ward­ing ap­proach. So our ap­proach is to keep things sim­ple, while in­vest­ing in in­fra­struc­ture. “

In 2010, there was a ma­jor in­fra- struc­ture in­vest­ment in Ateco’s $32 mil­lion head­quar­ters and Fer­rari/Maserati deal­er­ship in Syd­ney. They staged Aus­tralian de­buts of Fer­rari’s 458 Italia su­per-coupe and Maserati’s GranCabrio con­vert­ible in front of more than 550 in­vited guests. This fol­lowed the open­ing of re­tail out­lets in Mel­bourne, Bris­bane and Perth, and up­grades to premises in Ade­laide and Auck­land.

“We’ve achieved our goal of build­ing the best car deal­er­ship in Aus­tralia,” said Crich­ton at the time.

“This mag­nif­i­cent new Syd­ney deal­er­ship means that we now have a net­work of deal­er­ship that can stand com­par­i­son with the best in the world.

“Wher­ever our own­ers visit a deal­er­ship they will be wel­comed by a unique level of cus­tomer ser­vice in fa­cil­i­ties that match the leg­endary per­for­mance, tech­nol­ogy and style of their cars.”

Ateco has al­ways stood out. Ac­cord­ing to Ric there are three ma­jor im­porters, how­ever while two con­cen­trate on one ma­jor brand, Ateco has a di­ver­gent range of prod­ucts con­cen­trat­ing on the Euro­pean, Korean and Chi­nese mar­kets.

The com­pany has cru­cial re­la­tion- ships in these mar­kets, due to its man­age­ment’s fore­sight and ex­pe­ri­ence.

“Our re­la­tion­ship is im­por­tant with sup­pli­ers be­cause we are a fran­chise busi­ness, we op­er­ate in fran­chise agree­ments from our sup­plier and we need a good re­la­tion­ship be­tween the fran­chisors,” Ric says. “If that re­la­tion­ship breaks down it can mean that that brand is lost to us.”

Ric un­der­stands the car in­dus­try. He has seen rad­i­cal changes from du­ties of 57.5% to 5% and im­ports now mak­ing up 90% of the Aus­tralian mar­ket when it used to be 15%. He be­lieves man­u­fac­tur­ing in Aus­tralia will phase out com­pletely, how­ever he still sees a place for the man­u­fac­ture of parts.

“The big­gest im­post to busi­ness, and one ma­jor fac­tor that killed the car man­u­fac­ture busi­ness in this coun­try, is the cur­rency fluc­tu­a­tion,” Ric says. “It af­fects the busi­ness at the most fun­da­men­tal level.”

How­ever, im­ports will con­tinue to grow and ac­cord­ing to Ric the mar­ket is show­ing signs of a steady growth, which au­gurs well for the fu­ture par­tic­u­larly for a com­pany whose brands are so dis­parate that they have all ends of the mar­ket cov­ered.

And that’s where a knowl­edge and un­der­stand­ing of past and present mar­ket driv­ers comes in handy. Ric can ut­lise the lessons of the past to steer the com­pany for­ward and into a very ro­bust fu­ture.

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