With Australia’s big three vehicle manufacturers - Ford, Holden and Toyota - now all running as full importers after years of plant wind-downs, it’s a good time to look at aspects of the car-making business still in operation here.
One big example that arguably doesn’t get enough recognition is Nissan Australia’s casting plant in the outer-Melbourne industrial suburb of Dandenong, a growing and profitable facility making and designing all sorts of components: including key aluminium parts for electric vehicles and hybrids.
The Nissan Casting Australia Plant (NCAP, don’t confuse it with the safety watchdog) just turned 35 years old, though its purpose within the global Nissan supply network has changed a lot since 1982 - a time when Nissan still actually made cars here, at the Clayton plant.
The best way to win contracts to supply Nissan factories all over the world, when you’re fighting against plants in countries with much lower labour costs, is to focus on making complex things that make the most of our highly-educated workforce. Some parts made in Dandenong are actually made by no other Nissan operation, giving it guaranteed clients.
Head of the “orphan” plant, Peter Jones, also told us that logistics costs are quite low if you’re an Australian exporter, because delivery ships so often leave our shores empty, and therefore are happy to negotiate competitive rates. Yet so tight are Japan’s supply lines on hybrid components that it sometimes actually flies crates from Melbourne direct, at great expense.
At present, NCAP makes more than 60 different components for export to Nissan plants scattered around the globe (Japan, Korea, Thailand, the US, UK and Mexico). It also supplies directly to Calsonic Kansei, Aichi Kikai and JATCO.
It’s also the only Nissan casting plant outside Japan with engineers on staff to actually design new parts to order, often needed if lead times are short. This goes from simulations, through to modelling and then to machinery procurement and die-cast production.
To specifics, it makes about 2.6 million aluminium casings every year at the 23,000 square-metre covered facility, employing 192 staff (about 150 are unionised, full-time and on four-year EBAs) operating 13 casting machines, a full testing lab, a CT scanner to check porosity and more, and helped by 52 robots performing menial tasks such as detailed fettling.
It also lists 22 top-tier suppliers based in the surrounding area, thereby indirectly providing much more gainful employment for people beyond its walls.
Products made here include die-cast inverter covers for the Leaf EV, water jackets for the Note e-Power hybrid, transmission cases for the Navara, final drive coupling covers for the X-Trail, Qashqai and Renault Koleos, and the final drive rear cover on the Infiniti Q50 - all stamped with a tiny kangaroo icon.
Annual export sales revenue totals about $82.5 million. The site also makes 16,000 tow bars per annum, sold as accessories in Australia. The plant is profitable, albeit not by much, with high power costs blamed for eroding the margins.
Nissan says it explored using solar to supplement the energy-intensive process of melting aluminium, but said it’s not viable at the moment since it wouldn’t recoup for more than a decade. Such is the irony at the heart of EVs the world over…
In recent times, Nissan has in fairness invested in the plant to upgrade machinery and buy new tools to make the extremely complex EV components that have tolerances best associated with fractions of a human hair. It’s spent $11 million in the past two years on specific tooling, and equipment, for new-generation hybrid and EV components.
As such, it’s also signed supply deals for the e-Power hybrid models out to 2025, ensuring its mid-term future.
Nissan Australia also receives state and federal public funding, recent examples being a $800k grant to buy a new tower melt furnace and $3.7m from the Green Car Innovation Fund. There’s also an active $1.6m annual grant as part of the federal Automotive Transformation Scheme.
“The Nissan Casting Plant, and what we manufacture and export, is critically important to the global business,” said NCAP’s aforementioned managing director Peter Jones.
“We have exclusive supply contracts awarded by Nissan Global that will keep the plant operating well into the next decade.
“There should be no doubt, Nissan is still a fully integrated OEM car brand in Australia. Nissan Casting Australia is defying the belief that automotive manufacturing doesn’t have a place in our country. If you want evidence of ‘Made in Australia’ you’ll find it here.”
With a global expectation of quality only ramping up and competition from other in-house suppliers (who must do business cases internally to lure contracts) growing, Nissan has also started working with CSIRO to develop various things to sharpen up its quality.
“Our quality department uses the same kind of measuring machines and granite tables used by Formula One teams,” said Jones. “These parts are so precise that they match up exactly with parts made in Japan to a tolerance of 15 microns, less than the diameter of a human hair.
“And it’s this precision and quality that has earned us exclusive contracts for the supply of specific parts. “I’m very proud to say they’re part of the reason why we’ve secured even more business from Nissan Global, some of it exclusive to Nissan Casting Australia.”
See a heap of extra photos of the casting plant, plus some infographics, by clicking the Photos tab above.