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No engines, no oil, no radiators. How the auto industry is becoming autonomous

A short walk from the city’s shining office towers is a narrow thoroughfare Gladstone Street where five kindred businesses are squeezed into a single block.

From the outside they are brick and concrete slabs, with no-fuss signage and heavy roller doors. Take a look inside any one of them, though, and there’s the thumping pulse of an industry at work. There is a shop that specialises in Holdens, another that repairs cars from the ’80s. There’s a garage that services motorcycles and another that does roadworthy inspections. 

“Everyone has a little niche and everyone is kept busy,” says Tony Sanchez, whose company specialises in auto electric repairs and European cars, but can work on just about anything.

“Anything from a Hyundai to a Jaguar, whatever comes through the door.”

ALS Automotive is bigger than your average workshop, with 420 square metres of floor space, a front office and a change room out the back. Among the two dozen cars inside today is a Volkswagen that needs $2500 of work, a diesel-engine Volvo and an Audi with a busted air-conditioner.

When Australians think about the automotive industry, what often comes to mind are images of iconic car makers and thier once-bustling factories in Broadmeadows, Geelong or Adelaide, operated by generations of blue-collar workers for more than a century.

Now, as Holden prepares to roll the final Australian-made passenger vehicle off its production line in October, a new national report has attempted to answer a very important question: what will our automotive industry look like next?

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The can be little doubt, according to the research from the Victorian Automobile Chamber of Commerce, that the industry is about to “enter a new phase, as a new entity and with a new direction”.

A hundred years of passenger car manufacturing will soon be finished. In turn, component making will also be largely scaled back. And the slowly rising uptake of electric and autonomous vehicles will disrupt business models to a “degree never witnessed before”.

But, says the report, the decline of the factories and unprecedented change does not spell the end for the industry as a whole, which will remain robust, with more than 68,000 automotive retail, repair and services businesses.

Yes, the sector will be scaled back somewhat – just not as much as one might think.

“A key finding in the report is that Australia’s automotive industry is here to stay,” says VACC executive director Geoff Gwilym.

“Passenger vehicle manufacturing will cease … but that is, and always has been, a small component of the entire automotive industry.”

The automotive industry, the report says, contributes $37.1 billion to Australia’s economy, or 2.2 per cent of GDP. This will decline by about $2 billion to 2.1 per cent of GDP after the manufacturing exit in October.

The industry employs 379,365 people. This will shrink by 15,000 people in the next three years.

Australia’s biggest publicly listed automotive retailer, Automotive Holdings Group,which has more than 100 dealerships across Australia and New Zealand, believes the industry is “evolving to meet its challenges”.

“It’s not only automotive retail,” AHG managing director John McConnell says. ”Other retail sectors are also facing a range of disruptive influences. But we are confident that opportunities will emerge with our existing and potentially new partners.

“Our scale and broad portfolio of products give us significant opportunity to work with the [manufacturers] and to maintain and improve our share of the market for new and used cars, service and repairs, and finance and insurance.”

Electric and autonomous vehicles will have drastically fewer moving parts, meaning they will require far less maintenance. Most of the maintenance will be done via computers.

“Eventually,” says Mr Sanchez, “they will be doing away with engines, doing away with oil, doing away with radiators, doing away with a hell of a lot of products that the industry relies on. Then they will be autonomous – and they will be doing away with tow trucks, there will no more panel beating, because they won’t be crashing.”

Mr Sanchez is 62. His industry has changed dramatically since ALS opened in 1979. Collision-warning systems. Rear cameras. Automatic headlights. Rain-sensing windscreen wipers. 

Like the other business owners in Gladstone Street, he has had to invest in retraining and sophisticated diagnostic equipment as a necessity to keep up, and now, he says, he is nearing the end of his working life.

“I live in a nice house, I have a nice car, I own this building … I’ve achieved what I’ve achieved because I’ve worked hard, provided good services and the auto industry has been good to me,” he says.

“I hope it continues to do that for other people, who can work hard and prosper.”

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