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Car industry on the move

MASSIVE changes will continue in the automotive industry in the next few years, says Coventry Group Limited CEO and chairman Barry Watson.

As head of Australia’s major automotive supply group, Mr Watson is well placed to predict what he calls the next stage of the automotive revolution.

Mega-mergers between major car manufacturers are occurring at a rapid rate, and Mr Watson believes it won’t be long before there there are only four or five automotive manufacturers in the world.

He cited GMH taking a large stake in the Fiat organisation, the purchase of Mitsubishi by Daimler-Chrysler and Ford’s takeover of Landrover, Jaguar, Volvo and Mazda, describing the moves as ‘vertical integration’.

The future of other manufacturers such as Honda, BMW, Hyundai and Daewoo is up in the air.

Furthermore, Ford is currently talking with GMH about possible amalgamation.

“There’s huge rationalisation going on around the world and it’s unfortunate to say the big have got to get bigger to survive,” Mr Watson said.

“The amalgamation and consolidation will continue but the consumer will gain better service and cheaper vehicles as a result.”

Mr Watson said car manufacturers now aimed to service the vehicles they made for ‘whole of life’.

“Vehicles today have a warranty of three years and, during this period, manufacturers virtually control the vehicle,” he said.

“When the warranty expires, a large percentage of consumers take the vehicle elsewhere to be serviced.

“What manufacturers are now saying is that they want to own access to the vehicle for ten years, so they can improve the standard of service and encourage the consumer to come back to them after the warranty expires.

“Manufacturers are also now moving into ancillary activities – parts distribution and the after market, which includes service stations and panel beaters.”

Mr Watson said the Coventry Group recently formed a joint venture company with Ford.

“We have a controlling interest,” Mr Watson said.

Mr Watson said Ford was a prime example of companies attempting diversity in the automotive industry.

“They’re even buying driving schools in Canada and the US,” he said.

“They’re also buying crash repair centres and already own Hertz and insurance companies.”

Mr Watson said the Ford/Coventry joint venture company’s first task was to develop a further sixty branches of the Coventry’s network on the eastern seaboard.

“There’s lots of opportunity to grow the business,” he said.

“By 2003, the eastern States network should start being a contributor to the Coventry Group.”

Mr Watson was adamant the group would remain WA-controlled.

“We’re proud of where we come from,” he said.

Mr Watson said the Coventry Group had very high staff retention rates.

“Many of our staff have been here for twenty or thirty years,” he said.

Mr Watson initially joined the company in 1961 as an inventory management clerk, becoming a director in 1977.

He became joint managing director in 1989 and, following the retirement of Brian Goddard in 1997, Mr Watson became CEO.

“Aside from being in the right place at the right time, I’ve been fortunate to work for a company that encourages staff to grow and develop,” he said.

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