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Australian automotive manufacturing not dead, Nissan's EV future depends on it

These parts are only made in Australia.
Tung Nguyen
Contributing Journalist

16 Nov 2017 • 10 min read

While Holden, Ford and Toyota have ended their Australian manufacturing operations, Nissan expects growth from its Dandenong-based casting plant over the coming years due to increased electrified powertrain construction.

The Nissan Casting Australia Plant (NCAP) has been operating for 35 years and makes several aluminium parts for models like the Qashqai, Navara, X-Trail, Infiniti Q50 and Renault Koleos.

Significantly, NCAP also produces key components – including the water jacket, inverter case and stator housing – for the Nissan Leaf electric vehicle (EV), as well as for hybrid powertrains employed by the Japanese Domestic Market (JDM) Note and Serena e-Power.

Speaking to journalists at a special event celebrating the 35th anniversary, NCAP managing director Peter Jones said the plant's medium-term future is ensured, thanks to the high-quality parts it makes and the increase of electrified powertrains.

The Australian operation is vital for cars like the Serena e-Power, which isn't sold here. The Australian operation is vital for cars like the Serena e-Power, which isn't sold here.

“As they expand the model range that e-Power is on … we’re trying to set ourselves up as the mother plant for production of those specific parts and, to date, we’ve been successful at doing that,” he said.

“We’re hoping as they look to move it to different models we will be able to maintain contracts, or win contracts, on that and there’s nothing that would indicate we wouldn’t get them based on our current level of pricing, our current efficiency and our current quality.

“Our aim is to be the preferred Renault-Nissan Alliance manufacturing plant for high-pressure die-cast aluminium for the electric vehicle components by 2020.”

With 192 employees – 149 permanent and 43 on contracts or temporary work – and 13 casting machines running, the plant produces 60 unique components, with its 2017 volume expected to hit 2.6 million die-cast aluminium parts and more than 16,000 tow bars, representing a combined value of $82.5 million.

The Nissan Leaf has relies on various components produced by the plant. The Nissan Leaf has relies on various components produced by the plant.

However, Mr Jones said the existing NCAP set-up will need to be addressed in future, given it is already operating at around 80 per cent capacity.

“What we’re looking at now, in terms of some of the contracts that we’re currently quoting on, is actually investing heavily and putting more casting machines in because that capacity is based on our 13 casting machines,” he said. 

“Some of the things we’re looking at now will involve us buying some more casting machines and they’re around about $5 million each, and that’s a significant investment.”

Mr Jones said the 90,000-square-metre plant in Dandenong, Victoria has “got the space” to grow in size, but also suggested the addition of automated processes could be an alternative method for increasing production efficiencies.

According to Mr Jones, NCAP will potential benefit from Renault-Nissan Alliance’s acquisition of Mitsubishi, with the plant’s production volumes expected to increase as the three brands move closer to shared vehicle platforms.

“I think the alliance is in fairly early stages, but we’re always looking for synergies, and as we look at manufacturing processes across the globe, it may well be that we pick up some of that, or they may pick up some of our technology, which would mean the orders would go up,” he said.

“But at the moment, there’s been very, very little impact.”

Mr Jones added that NCAP is set apart from other casting plants globally because of its ability to produce top-quality, highly-technical componentry regularly required for difficult and critical EV parts.

“You can cast something anywhere around the world, but in terms of these EV parts … they are difficult to make, they are complex to make, and they require the highest level of finish and quality to ensure that these very, very sophisticated cars we’re making continue to function properly,” he said.

“Our parts have been of very, very good quality and we have the confidence of (vehicle manufacturing) plants around the world, and that’s half the battle.

The Japanese-market Nissan Note also relies on parts that are only made in Australia. The Japanese-market Nissan Note also relies on parts that are only made in Australia.

“These parts … are only made in Australia. Some of the stator housings are made in other places around the world, but the water jackets and all that … this is the only place in the world that make them.

“And in some ways that’s a risk, and in some ways it’s a hell of a responsibility, and we make sure that they’re (executives) aware of it.”

Mr Jones confirmed about $1 million is invested in ensuring NCAP components meet the highest standards, including an X-Ray machine that examines aluminium integrity, as well as strict quality control procedures.

In addition to top-quality parts, Mr Jones said it is the excellence of NCAP's employees and “agile manufacturing” capability that has led it to carrying on despite the demise of local car production.

“We have very, very clever people – many of them have been here over 30 years,” he said. “In terms of the engineering side of our business, we have people here in Australia that allows us to be the only plant outside of Japan that has engineering capabilities – so we design new parts as well.

“We have that ability to change dies relatively quickly and do varying styles and varying length of runs on those parts.

“And of course, government support, and we’ve been lucky to enjoy government support on both a federal and state level.

“Nissan is going to buy it (casting machines) somewhere in the world – and these things are very, very expensive – but if we can get some help to buy it here – which drives our per part or per piece cost down – that puts us in a far better competitive position to win the business that keeps the plant going.”

Furthermore, Mr Jones said NCAP has remained flexible, allowing it to regularly adapt to change and take business into new markets across the globe.

“Every time there has been an opportunity, we’ve changed,” he said.

“So we started off with a gravity-fed or low-pressure die-casting for cylinder heads and things like that, and that was just for export to Japan.

“We then introduced high-pressure die-casting and we started making gearbox components, we got new markets in Mexico and the US.

“We then went to machining and assembly, we got some more exports to the US and Thailand, we then changed to drivetrain materials and then EV components.

“Every time we changed, adapted and overcame if you like, we entered into new markets, and that level of flexibility has allowed us to survive.”

Are facilities like the Nissan Casting Australia Plant the future of Australian automotive manufacturing? Tell us what you think in the comments below.

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