Pedders: How an Australian Family Business Took On The World

Australian automotive suspension company Pedders has translated Australia’s unique conditions into competitive advantage, taking its products and expertise to the world – including the automotive industry’s heartland – the USA.

Padders Case Study

Founded in 1950 as a backyard welding business, three generations of the Pedders family have steered the company’s growth to manufacture, distribute and install its automotive suspension products in Australia through a chain of 116 outlets of franchised, company owned stores and authorised dealers. Pedders also exports to Korea, Thailand, Indonesia, Kenya, Tanzania, China, South Africa, Malaysia, Japan, New Zealand and many Middle Eastern regions.

The path to the US market opened through contacts made at the SEMA automotive show at Las Vegas in 2002, who alerted the company to a niche opportunity in the US high-performance car market. Pedders entered into a partnership and USA business started slowly, selling its products to just a few dedicated dealers stateside.

At the same time, General Motors (GM) Holden in Australia was exporting its Holden Monaro to the American market as the Pontiac GTO. The strength of the Pedders product range for this vehicle gave them a head start in the market. Pedders became the preferred suspension for this high performance model in the aftermarket. Positive customer feedback set the brand aside from other local brands, working on the strength of the reputation of Australian quality.

[pullquote align=”right”]The Australian Government’s Export Market Development Grants (EMDG) scheme allowed Pedders to “take a punt on the US market,” Mr Pedder said, allowing recovery of some of the company’s eligible export promotion costs.[/pullquote]

Pedders currently has 80 dealers in the USA, and is now working with major WD houses to continue expansion. Chairman, Mr Ron Pedder, who headed the company from 1972 to 2006 said, “The Pedders brand is well known among the high-performance ‘muscle car’ enthusiast community in the USA; and a substantial opportunity is developing in the older 1960s-1980s car market.”

With the growth of the business assured, the company established US representation – forming Pedders USA in 2005, headed in the States by Mr Peter Basica.

During the last four years, Pedders USA has developed significant industry partnerships. A prestigious partnership with GM was formed when Pedders was declared an approved GM fit GMPP for the Camaro and several other GM models. Other exclusive distribution customers include the iconic brands Lingenfelter, Petty and Saleen.

Other highlights for Pedders in the USA included supplying the suspension on legendary USA NASCAR race driver Richard Petty’s Chryslers; and talk show host Jay Leno’s custom Camaro. Pedders has also featured several times on the popular TV program West Coast Customs.

The company’s US presence has meant that products could be marketed through warehouse distributors, as well as individual outlets in the US, with orders fulfilled from products stocked in-market from their warehouse in Texas.

Mr Pedder said the company has achieved other successes, including going from being an unrecognised name in the US to a well-known brand; and weathering the Global Financial Crisis, which saw a loss of half of all US sales in 2009.

[pullquote align=”left”]Austrade’s assistance too was invaluable – especially when the company first entered the US market. “Austrade provided essential market intelligence to Pedders, including letting us know who was who and how the market worked.”[/pullquote]

Mr Pedder said, “It’s still tough two years later, but we had a 30 per cent increase in sales in 2010 and 2011 is shaping up even better.”

Pedders has been supported by Austrade in Australia and the USA. The company is a member of the High Performance Brands cluster in Austrade’s Global Opportunities pilot program, in conjunction with the Australian Automotive Aftermarket Association. This cluster works collectively to capitalise on opportunities in the US market for high performance and motorsport products.

And the Australian Government’s Export Market Development Grants (EMDG) scheme allowed Pedders to “take a punt on the US market,” Mr Pedder said, allowing recovery of some of the company’s eligible export promotion costs.

Austrade’s assistance too was invaluable – especially when the company first entered the US market. “Austrade provided essential market intelligence to Pedders, including letting us know who was who and how the market worked,” Mr Pedder said.

The Australian automotive sector generates sales of approximately A$20 billion per year, making it Australia’s sixth largest export earner. The domestic market is relatively small, so like Pedders, many Australian aftermarket suppliers are focussed on overseas opportunities.

Pedders has tailored its product line to international markets. Designed, built, researched and tested in some of Australia’s harshest conditions, the company said this makes its products superior to market competitors, connecting with customer awareness of our country’s rugged conditions. Pedders has also developed specialist off-road original equipment (OE) and lowered vehicle applications especially for overseas markets.

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MtM Automotive Expands to Asia

MTM Automotive Case Study

For the past decade, Australian automotive manufacturer, MtM, has sought new opportunities to supply quality components in the world’s largest automotive markets. In 2010/11, exports accounted for around 20 per cent of MtM’s total business; just three per cent was destined for Asian markets.

MTM anticipates its exports will represent almost half of the company’s business within five years and most of this growth is expected to come from Asia.

Beyond Australian shores

The company’s first international success came with their expansion into the mature North American market. And after almost 15 years, MtM now operates a successful warehouse and sales office in the US.

For MtM’s Business Development Manager, Peter Sloan, the company’s success in America built a solid foundation for MtM’s larger international strategy.

“Once you export to your first market you begin to understand a great deal about exporting more broadly,” said Mr Sloan.

“After working in America we re-did our strategy. We’ll do the best we can in Australia, but we believe we have world-class design and manufacturing for both gear shifters and door checks so we’re taking those products to the world.”

A competitive edge in Asia

With an eye on Asia’s growth markets, MtM joined the Australian consortium of global automotive suppliers, AutoLink. And with support from Austrade, the Victorian Government and other AutoLink partners, MtM has been able to develop new relationships in China, Thailand, India and Malaysia.

Working in Asia, MtM quickly realised that many local manufacturers lacked the experience to ensure the high quality increasingly in demand across the region’s booming automotive markets.

“Demand in Asia is changing rapidly,” says Sloan. ”From our experience in more mature markets we understand the consumers’ desire for quality and that really gives us an advantage in newer markets.”

“And as black box designers we can design custom components for our clients. So while we don’t supply a unique product, we do have capability that is unique in Asian markets.”

In 2011, MtM maintains commercial relationships in both India and Malaysia. In India, the company’s automatic gear shift boxes have been used by Mahindra & Mahindra in the manufacture of a Sports Utility Vehicle planned for export to the US.

Whilst in Malaysia, MtM has established a Memorandum of Understand (MoU) with resident manufacturer, Proreka. Working on behalf of MtM, Proreka will market MtM’s door check and gear shifter technology throughout the country.

[pullquote align=”right”]And with support from Austrade, the Victorian Government and other AutoLink partners, MtM has been able to develop new relationships in China, Thailand, India and Malaysia.[/pullquote]

China beckons

Determined to make a mark on the world’s biggest automotive market, MtM has established its own company in China to deliver door check and gear shifter technology from a local base.

Shanghai-based MtM Autoparts was established in late 2008 and recently achieved technical certification [TS1694] ensuring the quality of its products in the Chinese markets. With the onus now on product demonstration, MtM Autoparts has begun the small-scale manufacture of door checks.

“To be competitive in new markets you have to be able to demonstrate your technology – that’s part of building relationships and it takes time,” says Sloan.

According to Peter Sloan, building trust within the market can take years of work but these strong business relationships are a central part of business practice throughout Asia.

For MtM, significant local involvement has been an integral part the company’s ability to build relationships in the Chinese market. Peter Sloan believes that working exclusively with local staff – trained in MtM’s quality manufacturing systems – will lead to significant exporting success for MtM Autoparts in China.

“As a foreigner, you can learn the tax rules, you can learn the language and you can try to understand the culture. But you’ll never do it better than someone you can trust who has grown up and worked in the culture,” says Sloan.

In the long term, MtM hopes to replicate its China strategy in other parts of Asia, minimising reliance on local technology partners and increasing the integrity of the company’s products and services.

A strategic approach to the future

Over the five years, MtM will seek to grow its Asian exports to around A$10million per annum but the company has learnt to concentrate its efforts where export potential is greatest.

Whilst China, India and Thailand are the region’s largest automotive markets, Peter Sloan says MtM is not currently looking to Thailand for export opportunities.

“We explored the Thai market early in our strategy but we found it particularly challenging as a lot of the sourcing decisions are made elsewhere – particularly in Japan,” says Sloan.

With assistance from Austrade, MtM has turned its sights to the region’s other significant automotive markets and continues to work through AutoLink to access new opportunities across the global industry.

“Even if you’ve exported before, there’s a great deal you need to learn when you are looking to enter a new market,” says Sloan.

“Austrade’s staff helped us to understand the economic and political situations in the countries where we are working, and their industry contacts open many doors for MtM in Asia.”

Carl Zeiss Vision shares Australian Research Vision

The German optical lens manufacturer is using Australian innovation to both improve the vision of myopia sufferers, and to slow the progression of the condition.

Carl Zeiss VisionAlmost a quarter of the world’s population suffers from the vision condition known as myopia. Commonly known as shortsightedness, people with myopia have blurred distance vision with generally good near vision, but in its more acute forms even near vision is affected. Myopia can be hereditary, and for young sufferers it can grow progressively worse as they age.

It is a condition that has long been the focus of the German company Carl Zeiss Vision GmbH. The optician Carl Zeiss started his work in optics in the field of microscopy back in 1847. The company he founded has evolved significantly since that time, and today the company Carl Zeiss Vision, part of the larger Carl Zeiss Group, is a leading player in the quest to improve the vision of myopia sufferers. Today Carl Zeiss Vision employs 11,000 staff around the world, and more than 200 million people now wear Carl Zeiss Vision lenses.

But one of the latest weapons in its arsenal against shortsightedness is the product of Australian ingenuity.

Partnering with Australian visionaries

During the 2000s Carl Zeiss Vision had been developing lens technology that not only improves short-sightedness, but can also slow the progression of myopia in juvenile sufferers using a technique called peripheral correction.

This technology was also a focus for an Australian research group, the Vision Cooperative Research Centre (Vision CRC), and today the two organisations are working in partnership to bring the CRC’s patented MyoVision™ technology to market.

[pullquote align=”left”]CRCs provide multinationals with a unique and attractive proposition for developing technology for commercial output, while sharing the risks and the returns. The Australian Government has committed more than A$3.4 billion in funding to the CRC program to date, and there are currently 44 CRCs in operation across the mining, manufacturing, services and agricultural sectors.[/pullquote]

Founded in 2003, Vision CRC is a worldwide collaboration of leading vision care and eye health organisations based at the University of New South Wales in Sydney, Australia. It is part of the Australian Government’s CRC program, created in 1991 to foster innovation by forming long-term strategic links between publicly-funded researchers and industry to tackle major challenges, bring world-class research to commercial success and drive industry productivity. CRCs provide multinationals with a unique and attractive proposition for developing technology for commercial output, while sharing the risks and the returns. The Australian Government has committed more than A$3.4 billion in funding to the CRC program to date, and there are currently 44 CRCs in operation across the mining, manufacturing, services and agricultural sectors.

Myopia has been a key research field for Vision CRC. In a myopic eye, light rays from a distant object are focussed in front of the retina (the light sensitive layer at the back of the eye). This creates a blurred image on the retina.

The condition is corrected by a concave lens (for example, in a spectacle) that shifts the image to fall on the central retina. However, traditional concave lenses do not address the forming of the peripheral retinal image, resulting in the image falling behind the retina and a blurred image (a condition known as peripheral hyperopic shift). Key findings from research studies conducted by Vision CRC and its partners determined that blur at the peripheral retina can play a role in the progression of refractive errors.

The MyoVision™ technology created by Vision CRC and Carl Zeiss Vision not only enables the image to be placed on the central retina to provide clearer vision, but it also reduces the blur at the peripheral retina to help slow the progress of myopia.

Partnering for commercial success

In 2005 Vision CRC contacted Carl Zeiss Vision with the idea of collaborating on the development of new spectacle lenses using the MyoVision™ technology. The Vice President of Corporate Research and Development at Carl Zeiss Vision, Dr Markus Haidl, says his company had already released lens technology that could slow down the progression of myopia five years earlier, but was looking for fresh ideas.

“This new theory of controlling myopia progression by correcting peripheral hyperopic shift appeared to offer a promise to address our need,” Dr Haidl says. “Additionally, it fits with our demand to constantly find new solutions for our customers and provide a superior vision experience.

“Also, Australia has a vibrant research community in the area of myopia which is highly regarded around the world.”

Carl Zeiss Vision was attracted by Vision CRC’s global reputation for expertise in clinical research. Vision CRC had already established a partnership with the Zhongshan Ophthalmic Centre (ZOC) in Guangzhou, China, a country with one of the highest levels of myopia amongst children. It was an ideal location for clinical trials of the MyoVision™ technology.

“It is difficult to say if we would have been able to get the project even started if Vision CRC was not involved, and without its established relationship with ZOC,” said Dr Haidl.

Carl Zeiss Case StudyA new subsidiary of Carl Zeiss Vision was established in Adelaide in 2005 to service the Asia Pacific region. Adelaide is now home to one of two research and development facilities for the company globally.

It is also the headquarters for its Australian and New Zealand commercial organisation, and the location for facilities for the manufacturing of other Carl Zeiss products for the Australian market. Carl Zeiss Vision’s only other research and development facility is located at its headquarters in Aalen, Germany.

The first Carl Zeiss Vision lenses to feature the MyoVision™ technology went on sale in Singapore in 2010. They are now available throughout Asia, with the exception of Japan, as well as Canada and Australia, with further market rollouts planned.

The world in its sights

The head of the Myopia Program at Vision CRC, Assoc Prof Padmaja Sankaridurg, says that Vision CRC has made a significant contribution to Carl Zeiss Vision’s understanding of myopia, and the licensing deal has evolved into an ongoing relationship.

“In addition to the technology transfer, we are also working with their marketing team to help them translate the science to the optical practitioners,” Assoc Prof Sankaridurg says.

Dr Haidl says the partnership with Vision CRC is helping Carl Zeiss Vision to commercialise its products for a global market.

“We are working with key opinion leaders within Vision CRC to leverage the science and technology to support marketing claims and go-to-market strategies. The intellectual property created provides significant competitive advantages, which will be used to build recognition as an innovation leader in our industry.”

Carl Zeiss Vision has also benefited from tax concessions offered by the Australian Government designed to make research and development attractive in Australia, and Dr Haidl says the company has been impressed by Australia’s tertiary education system, which supplies a highly skilled workforce.

“Australia is good at attracting skilled labour from overseas due to its stable political system, high standard of living and attractive lifestyle. Australians are easy to deal with and are flexible in adopting change and in their approach to decision making. These qualities are highly appreciated.”

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