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BRW: Meet the innovative companies insourcing tech to get a competitive advantage

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26.08.13 - BRW: Meet the innovative companies insourcing tech to get a competitive advantage

"Entrepreneur David Brim, the co-founder of Melbourne start-up Tomcar Australia, has an interesting take on what can and cannot be outsourced. He licensed the Tomcar, originally an Israeli military vehicle, made improvements to it and is now manufacturing his own version in Australia.

While Tomcar Australia is in discussions with the government about military use, it is also selling it to the general public at $25,000 a pop for use on farms as a safer alternative to quad bikes and all-terrain vehicles, and also for recreational use.

Tomcar Australia has pre-sold the first 100 vehicles, delivered 30 already, and is aiming for 5000 per year.

The key disruptive idea is to eliminate the dealer network and exclusively sell the Tomcar direct through its website.

"You hear about the retail landscape being disrupted but people who sell big things like cars feel it doesn't apply to them," Brim says.

"I know that having millions of dollars of metal in a corner car yard is not something that's future-proof. So here at Tomcar Australia we've decided to avoid it altogether so we sell direct from the factory via the internet."

Brim is happy to outsource manufacturing to MtM, a tier-one automotive supplier based in Melbourne.

He points out that electronic and technology hardware manufacturers such as Apple moved to a model of designing products and outsourcing production some time ago, and he "doesn't understand" why car manufacturers don't adopt the same model.

"MtM is an amazing automotive manufacturer who is losing domestic business because of car companies leaving. So they have all the infrastructure and instead of us investing $10 million in building a factory, we've found one on our doorstep," he said.

"We outsource to an amazing manufacturer so we can focus on research and development and innovation. But we suffer indirectly because the government doesn't see us as a manufacturer and there are no grants available to us - we're being punished for being innovative."

Brim is also happy to use cloud computing providers, including Google (see Tomcar / Google Case Study), for some of the company's technology needs. However, the company would never let go of core research and development. It also developed its website in-house, because it found that existing technology options such as Shopify did not allow customers to pay a deposit - a necessary feature when the price is $25,000 and beyond the limit of many credit cards.

Although he was forced into that by circumstances, Brim says he is pleased with the result because it is unique and provides excellent service and branding." 

Read complete article here.

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