There has been much discussed in Australia about the decline of manufacturing. We have had all the major car manufacturers announce the closure of their Australian operations. This has followed last year announcements around the steel and other manufacturing industries which are moving offshore.
But let me tell you about a company that is going against the grain…
Yes Maton Guitars.
They manufacture Guitars and have done since 1946. It is still a family owned business. They are proud to be based in Australia. Recently the owner Linda Kitchen was asked about this and she talked about how they have started exporting guitars to China. Not the other way around and basing the manufacture in China.
Some incredible artists have played Maton Guitars including : Tommy Emmanuel, Keith Urban, Neil Finn and even the King – Elvis Presley.
I am learning the guitar so have been interested in Guitars and trying to make a decent sound. This was when I came across the Maton. Such a rich history and very fine attention to detail have created a business today that employs over 60 people making excellent guitars.
In the interview I saw Linda discussed a choice that was before them some time ago. There was increasing competition from guitars manufactured in places with lower costs in Australia. So how should they react. One option was to take their manufacturing offshore, another was to really drive costs down in the Australian operations or was there a third way.
Yes there was a third option – the option that was in my mind the best.
Don;t try to compete on price. Let the price conscious buyer purchase the cheap imports.
They had history and quality to maintain. But they needed to keep that story being told about their fantastic guitars.
So they decided to introduced custom designed guitars which have prices tags between $5,000 and $20,000. Yes they introduced the premium product targeted at the true guitar player (maybe one day I will get one). This strategy is fantastic because of two reasons (1) there is better margin on the premium products (2) it amplifies the message about the brand. The professionals purchasing the custom guitar are going to further add to the brand which will reinforce their baseline products.
So manufacturing in Australia is alive. It is just that they have worked out how to be different and guess what it is successful.